Strategic Compensation Chapter #1 A Component of Human Resource Systems

No longer just personnel management HR is a strategic partner Government regulations Compensation plays a huge role Ability to attract and retain employees Facilitate success Merit pay Incentives Competitive base pay

Strategic Vs. Tactical Decisions Strategic decisions guide the activities of firms. Tactical decisions support the fullfillment of the strategic decisions. Look page #12

Class exersize Look up NAICS Read over home page and understand what information is available. Click on New Code System Review information on this link

Compensation Professional Goals HR has staff function: idea to support line Recruitment Selection Performance apprasial Training Career development Labor-management functions Employee terminations Legal compliance

Compensation Managers must be able to Design and build pay plans that meet the needs of the firm’s strategy. Teach managers how to use compensation tools at the right time and place and in the right situation.

What is Compensation ? Intrinsic Psychological States Extrinsic Skill Variety Task Identity Task significance Autonomy Feedback Extrinsic Core pay Adjustments to core Legally required Discretionary

History of Pay Systems #9 Scientific Management Systems Time and Motion Studies Welfare Practices Competitive advantages

Compensation Managers Goals HR is staff and supports the line. Compensation systems must support Recruitment and selection Performance appraisals Training Career Development Employment termination Legislation Internal consistency Market competitiveness Incentive pay

Stakeholders of the Compensation System Employees Line Managers Executives Unions US Government

North American Industry Classification System Manual (NAICS) Class exercise: Type Strategic Compensation What do you find? Click on a few sites. Click on NAICS DOL.gov Look under BLS How would you use this to check on external consistency? How would you use this to check on internal consistency?