1. COMPENSATION STRATEGIES AND PRACTICES
CHAPTER 13
COMPENSATION STRATEGIES AND PRACTICES

2. Objectives
Identify the two general types of compensation and give examples of two different compensation philosophies
Discuss four strategic compensation design issues
Describe three behavioral considerations affecting compensation activities
Identify the basic provisions of the Fair Labor Standards Act (FLSA)
Discuss four methods of performing job evaluation
Outline building a wage and salary administration system
Discuss the establishment of a pay-for-performance system
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4. Strategic Compensation
Compensation philosophies
Entitlement orientation
Performance orientation
Compensation design
Organizational culture
Cost-effectiveness / labor market positioning
Competency-based pay
Broadbanding
Base / variable pay
Team-based compensation
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6. Legal Constraints on Pay Systems
Fair Labor Standards Act (FLSA)
Minimum wage
Child-labor provisions
Exempt and nonexempt status
Computer-related occupations
Overtime provisions
Compensatory time off
Independent contractor regulations
Acts affecting government contractors
Equal pay and equity
State laws
Garnishment laws
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8. Development of a Base Pay System
Job evaluation
Ranking method
Classification method
Point method
Factor comparison
Integrated / computerized
Legal issues
Americans with Disabilities Act (ADA)
Gender issues
Pay surveys
Prepared pay surveys
Developing a pay survey
Legal issues and pay surveys
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9. Establishing Pay Structures
Market line
Different pay structures
Pay grades
Pay ranges
Individual pay
Rate out of range
Red-circled employees
Green-circled employees
Pay compression
Pay increases
Seniority
Cost-of-living adjustments (COLA)
Pay-for-performance systems
Lump-sum increases (LSI)
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