The Challenges of Transparency How much to communicate about pay is a continual debate, one for which there is no clear answer. Those in favor of open communication feel that unless employees understand their organization’s pay system and how their…
A typical total rewards package can include compensation, benefits, work-life balance, performance and recognition, personal development, and career opportunities. Recent strong global competition for talent and shortages of critical-skill workers, particularly in the fast-growing economies of Asia and Latin America,…
Employee lifecycle (ELC) refers to the various stages of the employment process. It starts with the recruitment and ends with termination. The various stages of the employee lifecycle call for different HR management techniques for individual employees. As an example,…
PEST factors address political, economic, social, and technological factors that may influence an organization’s total rewards strategy. The following examples describe the conditions that may impact total rewards: • Political The head of government or legislative body in control most…
Internal Equity is a situation that results when people feel that performance fairly determines the pay for each individual with a certain job or that relative difficulty results in appropriate differences in pay rates between jobs. Worker dissatisfaction may arise…
Pay equity is not equal access to jobs offered by an employer. This is called employment equity, which means that women, men, and minorities have equal opportunities when applying for jobs. Nor is pay equity the fact that a person…
Equity is fairness and impartiality toward all concerned, based on the principles of evenhanded dealing. Equity implies giving as much advantage, consideration, or latitude to one party as it is given to another. Along with the economy, effectiveness, and efficiency,…
Contribution-Oriented These companies are more performance driven. They put greater emphasis on job performance and the contributions of individual employees. They focus on results but not so much on how the results are achieved. A company that instructs its sales…
Entitlement-Oriented These companies promote a caring, protective feeling and want employees to feel they are part of the family. Sometimes called a fairness orientation, or emphasis on people, these companies place a high value on how their decisions affect the…
Organizational Culture Regardless of the other factors, a compensation system must fit the organization’s culture. By “organizational culture,” we mean a system of shared assumptions, values, and beliefs that governs how people behave in organizations. Every organization has a distinct…