1. Strategic Compensation
Chapter #1
A Component of Human Resource Systems

2. 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

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

4. 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

5. 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

6. 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.

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

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

9. 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

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

11. 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?