1. 1 COURSE OBJECTIVE l DEVELOP AN UNDERSTANDING OF »CONCEPTS »PRINCIPLES »PROCEDURES »PROCESSES »PROGRAMS AS THEY RELATE TO THE DESIGN AND ADMINISTRATION OF AN EFFECTIVE COMPENSATION SYSTEM

2. 2 Teaching Assistant: Amy Chiu Pager No. 713-620-1696 camy@bayou.uh.edu

3. 3 COURSE OVERVIEW The Text Assignment for this Course is: "COMPENSATION MANAGEMENT" 7th edition BY R. HENDERSON And it will be augmented by an “Exercise Book” "COMPENSATION MANAGEMENT” 7th edition By R. HENDERSON

4. 4 Principle Areas Of Study Macro View (Chapter 1 - 5) l Provides a broad view of compensation management and identifies some of the major factors that influence compensation opportunities.

5. 5 Principle Areas Of Study Micro View (Chapter 6 - 12) l Contains the "nuts and bolts" or detailed analysis of compensation in organizations and deals with how job requirements are identified, defined, and valued.

6. 6 Principle Areas Of Study Micro - Macro View (Chapters 13 - 17) l Combines the micro - macro analysis by explaining how a base pay program is expanded into a total compensation system that includes various short and long-term incentives.

7. 7 Seven Classes Of Society In The US CLASS ANNUAL INCOME $ (000) % POPULATION UPPER RICH > $1,000 < 0.5 OF 1 WEALTHY250, TO 1,000 < 2.0 MIDDLE UPPER 85 TO 250 6 MIDDLE 45 TO 85 25LOWER 25 TO 45 37 LOWER WK POOR 15 TO 25 17 POVERTY TO 15 13 * ANNUAL INCOME IS FOR A FAMILY OF FOUR

8. 8 Work Force Demographics (JAN 1996) Population Of The US 262.8 Non-institutionalized - 16 Yrs And Up198.6 Civilian Employment132.3 Unemployed Persons 7.4 Labor Force In Non-ag Industries121.5 Full-time Employees 102.1 Part-time Employees 22.9 Employed Husbands 42.0 Employed Wife 32.0 Union Members 16.4 Employed Mgrs And Professionals 35.6

9. 9 Reward System l Focuses worker attention on the specific behaviors the organization considers necessary to achieve it desired objectives and goals. l Includes anything that an employee may value and desire and that the employer is able and willing to offer in exchange for employee contributions.

10. 10 Reward System Components l Compensation System »Monetary Claims »In-Kind Claims l Non-Compensation System »All Other Rewards

11. 11 Compensation System Components Monetary Claims l Wages and salaries paid in the form of money, or in a form that is quickly and easily transferable to money at the discretion of the employee.

12. 12 Compensation System Components In-Kind Claims l Goods and services made available and paid for either totally or in part by the employer. The value of any in-kind payment depends directly on the employee's perception of its worth.

13. 13 The Total Compensation Package l Pay For Work Performed »Base Pay »Premiums »Short Term Bonuses l Pay For Time Not Worked »Vacations »Holidays »Funeral Leave »Jury Duty An Eight Dimensional Classification Scheme

14. 14 The Total Compensation Package l Loss-of-job Income Continuance »Unemployment Compensation »Severance Pay »Supplemental Unemployment l Disability Income Continuation »Social Security »Workers Compensation »Sick Leave »Disability Pay Plans

15. 15 The Total Compensation Package l Deferred Income »Social Security »Pension Plans »Savings Plans »401-k Plans »Supplemental Retirement Income l Spouse (Family) Income Continuation »Social Security »Life Insurance »Pension Plans »Workers Compensation

16. 16 The Total Compensation Package l Health, Accident, And Liability Protection »Medical Insurance »Dental Insurance »Workers Compensation l Income Equivalent Payments (Perks) »Company Car »Subsidized Food Service »Child Care Services »Legal Services

17. 17 Non-Compensation System Dimensions l Enhances dignity and satisfaction from work performed. l Enhances physiological health, intellectual growth, and emotional maturity. l Promotes constructive social relationships with co-workers. l Designs jobs that require adequate attention and effort.

18. 18 Non-Compensation System Dimensions l Allocates sufficient resources to perform work assignments. l Grants sufficient control over the job to meet personal demands. l Offers supportive leadership and management.