Strategic Compensation: A Human Resource Management Approach

Description

Cover......Page 1 Title Page ......Page 4 Copyright Page ......Page 5 Brief Table of Contents ......Page 6 Contents ......Page 8 Preface ......Page 17 Part I Setting the Stage for Strategic Compensation ......Page 22 Chapter 1 Strategic Compensation: A Component of Human Resource Systems......Page 23 What is Strategic Compensation?......Page 24 Compensation as a Strategic Business Partner ......Page 26 Strategic Compensation Decisions ......Page 27 Competitive Business Strategy Choices ......Page 28 Building Blocks and Structure of Strategic Compensation Systems ......Page 29 Building Blocks: Core Compensation and Employee Benefits ......Page 30 Fundamental Compensation System Design Elements ......Page 32 Alternative Pay Structure Configurations ......Page 34 The Compensation Profession ......Page 35 How the Compensation Function Fits into HR Departments......Page 36 Line Managers ......Page 39 Compensation in Action......Page 40 Summary ......Page 41 CASE: Competitive Strategy at Sportsman Shoes......Page 42 Crunch the Numbers! Calculating the Costs of Increasing the Total Compensation Budget at Butcher Enterprises......Page 43 Endnotes ......Page 44 Chapter 2 Contextual Influences on Compensation Practice......Page 46 Interindustry Wage Differentials ......Page 47 Pay Differentials Based on Occupational Characteristics ......Page 48 Geographic Pay Differentials ......Page 50 Labor Unions ......Page 51 Employment Laws Pertinent to Compensation Practice ......Page 53 Income Continuity, Safety, and Work Hours ......Page 55 Pay Discrimination ......Page 59 Civil Rights Act of 1964 ......Page 61 Accommodating Disabilities and Family Needs ......Page 64 Prevailing Wage Laws ......Page 65 Summary ......Page 66 Discussion Questions ......Page 67 Crunch the Numbers! Whether to Work Overtime or Hire Additional Employees......Page 68 Endnotes ......Page 69 Part II Bases for Pay......Page 72 Seniority and Longevity Pay ......Page 73 Who Participates? ......Page 74 Design of Seniority Pay and Longevity Pay Plans ......Page 75 Fitting Seniority Pay with Competitive Strategies ......Page 77 Exploring the Elements of Merit Pay ......Page 78 Performance Appraisal ......Page 80 Types of Performance Appraisal Plans ......Page 81 Exploring the Performance Appraisal Process ......Page 86 Strengthening the Pay-for-Performance Link......Page 88 Differentiate among Performers......Page 89 Failure to Differentiate among Performers......Page 90 Undesirable Social Structures ......Page 91 Compensation in Action......Page 92 Key Terms ......Page 93 CASE: Appraising Performance at Precision......Page 94 Crunch the Numbers! Costs of Longevity and Merit Pay......Page 95 Endnotes ......Page 96 Exploring Incentive Pay ......Page 98 Contrasting Incentive Pay with Traditional Pay ......Page 99 Individual Incentives ......Page 100 Defining Individual Incentives ......Page 101 Types of Individual Incentive Plans ......Page 102 Disadvantages of Individual Incentive Pay Programs ......Page 104 Group Incentives ......Page 105 Types of Group Incentive Plans ......Page 106 Advantages of Group Incentives ......Page 110 Disadvantages of Group Incentives ......Page 111 Types of Company-wide Incentive Plans ......Page 112 Group versus Individual Incentives......Page 114 Performance Criteria ......Page 115 Compensation in Action......Page 116 Discussion Questions ......Page 117 Crunch the Numbers! Calculating Piecework Pay Awards......Page 118 Endnotes ......Page 119 Defining Person-Focused Pay: Competency-Based, Pay-for-Knowledge, and Skill-Based Pay......Page 121 Usage of Person-Focused Pay Programs......Page 124 Technological Innovation ......Page 125 Increased Global Competition ......Page 126 Varieties of Person-Focused Pay Programs......Page 127 Contrasting Person-Focused Pay with Job-Based Pay......Page 131 Advantages ......Page 132 Disadvantages ......Page 134 Summary ......Page 135 CASE: Person-Focused Pay at Mitron Computers......Page 136 Crunch the Numbers! Training Budget Costs......Page 137 Endnotes ......Page 138 Part III Designing Compensation Systems......Page 140 Internal Consistency ......Page 141 Steps in the Job Analysis Process ......Page 143 Legal Considerations for Job Analysis ......Page 148 U.S. Department of Labor’s Occupational Information Network (O*NET)......Page 149 Job Evaluation ......Page 153 Compensable Factors ......Page 154 The Job Evaluation Process ......Page 155 Job Evaluation Techniques ......Page 156 The Point Method ......Page 157 Alternative Job-Content Evaluation Approaches......Page 160 Alternatives to Job Evaluation ......Page 161 Compensation in Action......Page 162 Key Terms ......Page 163 CASE: Internal Consistency at Customers First......Page 164 Crunch the Numbers! Modifying a Job Evaluation Worksheet......Page 165 Endnotes ......Page 166 Market-Competitive Pay Systems: The Basic Building Blocks......Page 167 Preliminary Considerations ......Page 168 Using Published Compensation Survey Data ......Page 169 Compensation Surveys: Strategic Considerations ......Page 172 Compensation Survey Data ......Page 174 Updating the Survey Data ......Page 181 Integrating Internal Job Structures with External Market Pay Rates ......Page 183 Pay Level Policies ......Page 185 Pay Mix Policies ......Page 186 Compensation in Action......Page 187 Key Terms ......Page 188 CASE: Nutriment’s New Hires......Page 189 Crunch the Numbers! Updating Salary Survey Data......Page 190 Endnotes ......Page 191 Constructing a Pay Structure ......Page 192 Step 2: Determining a Market Pay Line ......Page 193 Step 3: Defining Pay Grades ......Page 195 Step 4: Calculating Pay Ranges for Each Pay Grade ......Page 196 Step 5: Evaluating the Results ......Page 199 Merit Increase Amounts ......Page 200 Timing ......Page 201 Rewarding Performance: The Merit Pay Grid......Page 202 Merit Pay Increase Budgets ......Page 204 Designing Sales Incentive Compensation Plans ......Page 206 Alternative Sales Compensation Plans ......Page 207 Sales Compensation Plans and Competitive Strategy ......Page 208 Determining Fixed Pay and the Compensation Mix ......Page 209 Establishing Skill Blocks ......Page 210 Transition Matters ......Page 211 In-House or Outsourcing Training......Page 212 Broadbanding ......Page 213 Two-Tier Pay Structures......Page 215 Compensation in Action......Page 216 Key Terms ......Page 217 CASE: A New Sales Representative......Page 218 Endnotes ......Page 219 Part IV Employee Benefits......Page 222 Origins of Discretionary Benefits ......Page 223 Protection Programs ......Page 225 Paid Time Off ......Page 230 Services ......Page 232 Internal Revenue Code ......Page 235 Employee Retirement Income Security Act of 1974 (ERISA)......Page 236 Designing and Planning the Benefits Program ......Page 237 Employee Choice ......Page 238 Communication ......Page 239 The Benefits and Costs of Discretionary Benefits ......Page 241 Compensation in Action......Page 242 Key Terms ......Page 243 CASE: Time Off At Superior Software Services......Page 244 Crunch the Numbers! 401(K) Plan Contributions: Allowable Amounts and Employer Match......Page 245 Endnotes ......Page 246 Origins of Legally Required Benefits ......Page 248 Social Security Programs ......Page 249 Workers’ Compensation ......Page 254 Family and Medical Leave ......Page 255 Health Insurance ......Page 257 Fee-For-Service Plans......Page 258 Managed Care Approach ......Page 260 Specialized Insurance Benefits ......Page 261 Consumer-Driven Health Care......Page 262 Health Insurance Portability and Accountability Act of 1996 (HIPAA)......Page 264 The Benefits and Costs of Legally Required Benefits ......Page 265 Compensation in Action......Page 266 Key Terms ......Page 267 CASE: A Health Savings Account at Frontline PR......Page 268 Endnotes ......Page 269 Part V Contemporary Strategic Compensation Challenges......Page 272 Contrasting Executive Pay with Pay for Nonexecutive Employees ......Page 273 Key Employees ......Page 274 Components of Current Core Compensation ......Page 276 Equity Agreements ......Page 278 Separation Agreements ......Page 280 Employee Benefits: Enhanced Protection Program Benefits and Perquisites ......Page 281 The Key Players in Setting Executive Compensation ......Page 283 Theoretical Explanations for Setting Executive Compensation ......Page 285 Securities and Exchange Act of 1934 ......Page 287 Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)......Page 290 Comparison Between Executive Compensation and Compensation for Other Worker Groups ......Page 291 Strategic Questions: Is Pay for Performance? ......Page 292 Ethical Considerations: Is Executive Compensation Fair? ......Page 293 International Competitiveness ......Page 294 Compensation in Action......Page 295 Key Terms ......Page 296 CASE: CEO Pay in the News......Page 297 Endnotes ......Page 298 The Contingent Workforce ......Page 301 Groups of Contingent Workers ......Page 302 Reasons for U.S. Employers’ Increased Reliance on Contingent Workers......Page 307 Pay and Employee Benefits for Contingent Workers ......Page 308 Part-Time Employees......Page 309 Temporary Employees ......Page 310 Leased Workers ......Page 311 Independent Contractors, Freelancers, and Consultants ......Page 312 Flexible Work Schedules: Flextime, Compressed Workweeks, and Telecommuting ......Page 314 Compressed Workweek Schedules ......Page 315 Flexible Work Schedules: Balancing the Demands of Work Life and Home Life ......Page 316 Employee Benefits ......Page 317 Unions’ Reactions to Contingent Workers and Flexible Work Schedules ......Page 318 Strategic Issues and Choices in Using Contingent and Flexible Workers ......Page 319 Compensation in Action......Page 320 Summary ......Page 321 CASE: Telecommuting at MedEx......Page 322 Crunch the Numbers! Calculating the Costs of FullTtime and Part-Time Employment......Page 323 Endnotes ......Page 324 Part VI Compensation Issues Around the World......Page 326 Chapter 13 Compensating Expatriates......Page 327 How Globalization Is Affecting HR Departments......Page 328 Preliminary Considerations ......Page 329 Staff Mobility ......Page 330 Setting Base Pay for U.S. Expatriates......Page 331 Purchasing Power ......Page 332 Hardship Allowances ......Page 334 Establishing Employee Benefits for U.S. Expatriates......Page 335 Standard Benefits for U.S. Expatriates......Page 336 Enhanced Benefits for U.S. Expatriates......Page 337 Balance Sheet Approach for U.S. Expatriates’ Compensation Packages......Page 338 Housing and Utilities ......Page 339 Tax Considerations ......Page 340 Compensation in Action......Page 341 Summary ......Page 342 Discussion Questions ......Page 343 Crunch the Numbers! Calculating an Expatriate’s Base Pay and Incentives......Page 344 Endnotes ......Page 345 Chapter 14 Pay and Benefits Outside the United States......Page 346 Pertinent Concepts for Quantifying Economic Elements in the Discussion of Pay and Benefits Outside the United States ......Page 347 Canada ......Page 348 Mexico ......Page 350 Brazil ......Page 351 Germany ......Page 352 India ......Page 354 People’s Republic of China ......Page 355 Compensation in Action......Page 357 Key Terms ......Page 358 CASE: North American Expansion for Threads Apparel......Page 359 Crunch the Numbers! Comparing the Rates of Change in GDP Per Capita for Select Countries......Page 360 Endnotes ......Page 361 Epilogue......Page 364 Chapter 15 Challenges Facing Compensation Professionals......Page 365 Raising the Minimum Wage ......Page 366 Strengthening Overtime Pay Protections ......Page 367 Rising Wages in China ......Page 368 Underemployment ......Page 369 The Compensation–Productivity Gap......Page 372 Labor Force Diversity ......Page 373 Summary ......Page 374 CASE: Benefits for Part-Time Workers......Page 375 Crunch the Numbers! Calculating Regional and Industry Pay Differences in China......Page 376 Endnotes ......Page 377 Glossary......Page 378 Author Index......Page 397 Subject Index......Page 399