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HRM Compensation Management
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Main Contents Introduction to Compensation
Point factor-based (internal equity focus) Performance reward
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Introduction to Compensation
Construction of total compensation Decisions related to compensation management Principles of designing compensation system Strategic compensation management
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Please think about it: Can we treat MONEY as a motivation factor?
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Basic Payment Variable Payment Direct Compensation
Total Compensation Direct Compensation Basic Payment Basic salary, wage for seniority, wage attached to a post Variable Payment Short-time variable payment Long-time variable payment Indirect Compensation Social Insurance; Holiday with payment; other welfare
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Decisions related to compensation management
How to decide the basic payment How to decide the average level of compensation How to decide the compensation structure How to decide the compensation regulations
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Principles of designing compensation system
Target of company 1 Direction Requirement of financial ability 1 Premise Outside equity Internal equity 2 Equities Compensation level matches positions Performance salary matches performance result Total amount of compensation matches company profits 3 Matches
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“Monkeys Demand Equal Pay”
A study shows brown capuchin monkeys refused to play along when they saw another monkey get a better payoff for performing the same work. The monkeys were trained to trade a granite token for a piece of cumber. When the reward was the same for both monkeys, they took the cucumber 95 percent of the time. But it was a different story when one monkey was given something better -- namely, a grape. Then, the other monkey often pitched a fit -- either throwing the token, refusing to eat the cucumber or giving it to the other monkey.
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Expectancy Theory Motivation = E X I X V
Expectancy: The connection between behavior and the outcome Instrumentality: The connection between outcome and a reward Valence: Is the reward something that the individual values?
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Strategic compensation management
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Operation Strategy and Compensation Strategy
Innovation Strategy Compensation System Operation Strategy Product leader in the market Customer concentration and product innovation Rewards in innovation of products and manufacturing methods
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Operation Strategy and Compensation Strategy
Cost leadership Strategy Operation Strategy Compensation System Cost effectiveness way of problem solving Focus on cost comparisons with competitors -- neither low nor high Increase the proportion of variable compensation
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Operation Strategy and Compensation Strategy
Customer Intimacy Strategy Operation Strategy Compensation system Customer service way of problem solving Customer satisfaction as the rewards basis Who evaluate the employee’s service?
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Point factor-based (internal equity focus)
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Point factor-based 3 parts:
Compensation factors：Which characteristics of one position can contribute to the corporation? How to measure compensation factors； Weight of each compensation factor.
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Knowledge & Technology
Compensation factor Factor Points Percentage % Work responsibility 400 40 Knowledge & Technology 300 30 Effort Degree 200 20 Work Environment 100 10
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Responsibility Factors Sub-factors Grades Weight Total
Responsibility of Risk Control 5 80 400 Responsibility of Const Control 6 40 Responsibility of Direction and Supervision 7 Responsibility of Internal Coordination 30 Responsibility of External Coordination 4 Responsibility of work results Responsibility of personnel arrangement Law responsibility 70 Level of decisions
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Knowledge & Technology
Factors Sub-factors Grades Weight Total Knowledge & Technology Requirement of Minimum Educational Background 5 30 300 Diversity of knowledge 4 Adaption period 20 Work complexity 40 Work experience 7 Work flexibility Writing ability 25 Mathematics knowledge Synthesis ability 50
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Minimum requirement of educational background
Definition of factors: Minimum academic requirements of smoothly performing job duties. 1、High school diploma 5 2、2 or 3-year college diploma 10 3、Bachelor’s degree 15 4、Master’s degree 20 5、PhD 30
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Occupation disease Definition of factors: Physical disease due to work. 1、No possibility of occupational disease. 2、Slightly damage some parts of body. 5 3、Moderately damage some parts of body. 10 4、Seriously damage some parts of body. 15
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Knowledge and Technique
Factors Segmentation factors Weight Job Title Responsibility Responsibility of Risk Control 80 Responsibility of Cost Control 40 Responsibility of Direction and Supervision Responsibility of Internal Cooperation 30 …… Knowledge and Technique Requirement of Minimum Educational Background Knowledge Diversity Job complexity Work Experience Effort Level Work Pressure Degree of Concentration Work Environment Occupational Disease 15 Characteristics of work time Total
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Possibility of Negatively influence health
4、work environment and definitions 4-1 Work time flexibility 7 Level 1 Hardly work overtime. 14 Level 2 Need to come early or leave late in order to complete the tasks occasionally. 21 Level 3 Need to come early or leave late in order to complete the tasks quite often, but regularly. 28 Level 4 Need to come early or leave late in order to complete the tasks quite often, not regularly. 4-2 …… ……. 4-3 Possibility of Negatively influence health Very low possibility of negative health influence. Relatively low possibility of negative health influence. Relatively high possibility of negative health influence. High possibility of negative health influence. 35 Level 5 Very high possibility of negative health influence. 4-4 Work danger No possibility of causing danger to the body. Possibility of slightly danger if lack of attention. Possibility of moderate danger if lack of attention. Possibility of serious danger if lack of attentin
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Design of Salary Structure
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Manager of Retired Affaires 210 3 Manager of Administrative Affairs
Position Point Value 1 Cashier 140 2 Manager of Retired Affaires 210 3 Manager of Administrative Affairs 260 4 Accountant of Labor Union 335 5 Secretary of CEO 345 6 Director of Administrative Affairs 355 7 Accounting Specialist 8 Recruitment Specialist 405 9 Manager of Financial Department 425 10 Project Manager 470 11 General Manager’s Office Director 545 12 Senior Manager of Financial Department 550 13 Senior Manager of Marketing Department 565
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以恒定的绝对极差方式来确定 Points Absolute Level-difference of Max-Min
Ratio of Differences of Max-Min Minimum Maximum 1 137 175 2 176 214 +39 22% 3 215 253 18% 4 254 292 15% 5 293 331 13% 6 332 370 12% 7 371 409 10% 8 410 448 9% 9 449 487 8% 10 488 526 11 527 565 7% 以恒定的绝对极差方式来确定
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职位点数等级划分及其点数变动区间 Point Range 1 137-175 2 176-214 3 215-253 4 254-292 5
6 7 8 9 10 11 527 or Above 职位点数等级划分及其点数变动区间
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Manager of Retired Affaires 210 1800 3 - 4
Levels Positions Points Market Salary Level 1 Cashier 140 1530 2 Manager of Retired Affaires 210 1800 3 - 4 Manager of Administrative Affairs 260 2030 5 Accountant of Labor Union 335 2300 6 Secretary of CEO 345 Director of Administrative Affairs 355 2430 Accounting Specialist 2560 7 Recruitment Specialist 405 2920 8 Manager of Financial Department 425 3160 9 Project Manager 470 3600 10 11 General Manager’s Office Director 545 4900 Senior Manager of Financial Department 550 5300 Senior Manager of Marketing Department 565 5700
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Y= x
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Y=878.238*e^(0.003*x) [Index Model]
![Y= *e^(0.003*x) [Index Model]](http://slideplayer.com./slide/11663985/65/images/29/Y%3D+%2Ae%5E%280.003%2Ax%29+%5BIndex+Model%5D.jpg)
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Mid-value of Salary Range of Linear Model
Levels Minimum Maximum Mid-value Mid-value of Salary Range of Linear Model Mid-value of Salary Range of Index Model 1 137 175 156 916 1402 2 176 214 195 1297 1576 3 215 253 234 1678 1772 4 254 292 273 2058 1992 5 293 331 312 2439 2239 6 332 370 351 2820 2517 7 371 409 390 3200 2829 8 410 448 429 3581 3180 9 449 487 468 3962 3575 10 488 526 507 4342 4019 11 527 565 546 4723 4518
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Mid-value of Salary Range of Index Model
Levels Position Point Market Salary Level Mid-value of Salary Range of Index Model Comparison（%）（Mid-value/Market Salary Level） 1 Cashier 140 1530 1402 92% 2 Manager of Retired Affaires 210 1800 1576 88% 3 - 1772 4 Manager of Administrative Affairs 260 2030 1992 98% 5 Accountant of Labor Union 335 2300 2239 97% 6 Secretary of CEO 345 2517 109% Director of Administrative Affairs 355 2430 104% Accounting Specialist 2560 7 Recruitment Specialist 405 2920 2829 8 Manager of Financial Department 425 3160 3180 101% 9 Project Manager 470 3600 3575 99% 10 4019 11 General Manager’s Office Director 545 4900 4518 85% Senior Manager of Financial Department 550 5300 Senior Manager of Marketing Department 565 5700 79%
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Level Difference of Median
Minimum=Mid-value/[100%+（Level Width/2）] Maximum=Minimum+（Level Width*Minimum） Level Width Mid-value Level Difference of Median Minimum Maximum 1 20% 1400 1273 1527 2 30% 1575 12.50% 1580 12.86% 1374 1786 3 1772 1780 12.66% 1548 2012 4 1993 2000 12.36% 1739 2261 5 40% 2252 13.00% 2260 1883 2637 6 2544 2550 12.83% 2125 2975 7 2874 2880 12.94% 2400 3360 8 3247 3250 12.85% 2708 3792 9 60% 3734 15.00% 3740 15.08% 2877 4603 10 4294 4300 14.97% 3308 5292 11 4938 5000 16.28% 3846 6154
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Salary Grades Median Minimum Maximum 1 1400 1273 1527 127 2 1580 1374
1786 206 3 1780 1548 2012 232 4 2000 1739 2261 261 5 2260 1883 2637 377 6 2550 2125 2975 425 7 2880 2400 3360 480 8 3250 2708 3792 542 9 3740 2877 4603 863 10 4300 3308 5292 992 11 5000 3846 6154 1154
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Salary Grades
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# 岗位 东单 地安门 万柳 文慧桥 总部 1 服务员 311 317 255 会计 285 2 收银员 336 347 289 357
成本 277 3 洗碗 282 293 203 271 材料 4 保洁 279 209 284 财务经理 501 5 水吧 307 350 273 346 采购 376 6 传菜 305 235 保管 261 8 打荷 276 213 280 采购经理 523 9 砧板 394 381 325 财务总监 679 10 上什 372 358 295 加工 248 11 炒锅 422 416 370 配送 239 12 冷荤 343 329 290 培训督导 396 13 库管 281 320 274 新品研发 447 14 电工 319 348 308 品控研发经理 558 15 值班 190 200 188 人事经理 500 16 服务领班 368 365 318 培训经理 532 17 服务主管 417 414 人力总监 685 18 收银领班 364 374 信息系统 19 洗碗领班 366 数据分析 294 20 保洁领班 345 283 会员 227 21 水吧领班 355 362 338 广告 22 传菜领班 349 353 321 市场 312 23 打荷领班 330 市场营销 448 24 砧板领班 439 430 380 25 上什领班 391 332 26 炒锅领班 486 480 434 27 冷荤领班 400 341 28 厨房主管 483 470 29 副经理 478 30 副厨师长 617 619 656 31 前厅经理 697 719 537 32 厨师长 727 742 651
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# 职级 分值 档位 1 2 3 4 5 1级 岗位工资 2级 3级 6 7 4级 8 9 5级 10 11 6级 12 13 7级 14 15 8级 16 17 9级 18
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岗位工资 等级 上限 下限 中线 上位 下位 基本工资 工资上限 工资下限
1 840 140 490 350 1160 2000 1300 2 1840 340 1090 750 3000 1500 3 3340 1340 2340 1000 4500 2500 4 4840 2840 3840 6000 4000 5 7840 6340 9000 6 10840 6840 8840 12000 8000 7 13840 11340 15000 10000 8 17840 11840 14840 19000 13000 9 26840 15840 21340 5500 28000 17000
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Performance Awards
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Short-time performance Awards
Short time performance Rewards Merit pay One-time Bonus Special Performance Recognizing Plans
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Short-time Performance Rewards Plan
Merit pay is a compensation system whereby base pay increases are determined by individual performance (as opposed to across the board increases). 2 types of merit pay According to performance base Combination of performance and relative compensation level
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Simple Merit Pay Table Please think about it, is there any problem?
Significantly above expectations Above expectations Qualified Below expectations Significantly below expectations Performance Evaluation Grade A B C D E Percentage of merit pay’s increase 7% 5% 3% 1% Please think about it, is there any problem?
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Simple Merit Pay Table Employee Current Base Payment
Percentage of merit pay Absolute merit payment A $2,000 2% 40 B $3,000 60 C $4,000 80
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According to the Mid-value of compensation range
Employee Current Base Payment Percentage of merit pay Absolute merit payment Actual percentage of merit pay A 2,000 2% 60 3% B 3,000 C 4,000 1.5%
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Comparing to market compensation level
Merit Pay Table Based on Performance and Outside Relative Compensation Level Comparing to market compensation level Performance Grade A B C D E Degree of Merit Pay ＞15% 6% 4% 3% 1% 0% 5%＜X≤15% 8% 2% 【-5%，5%】 10% 5% -15%≤X＜-5% 14% ＜-15% 18% 15%
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Relative internal compensation level
Merit Pay Table Based on Performance and Internal Relative Compensation Level Relative internal compensation level Performance Grade A B C D E Degree of Merit Pay 4th quartile 5% 3% 1% 0% 3rd quartile 7% 2nd quartile 9% 6% 2% 1st quartile 12% 10% 8% 4%
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Welfare & Motivation
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Employee Welfare Employee Welfare Statutory Insurance
Corporation Complementary Insurance Statutory Welfare Employee Service Welfare
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work-related injury insurance
Statutory Insurance Statutory Insurance Pension Employment Insurance Medical Insurance work-related injury insurance
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Corporation Complementary Insurance
Complimentary Pension Plan Group Life Insurance Health Care Insurance
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Employee Service Welfare
EAP Consulting Service Child Care Elderly Care Plan Food Service
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Flexible Welfare Service Plan
Core + Additional welfare service plan Welfare points Sell welfare points according to the previous performance Flexible Expenditure account Deducting some amount from pre-tax income Welfare Menu Combination of different welfare set
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