Compensation

1. There are four perspectives in terms of views of compensation:

> Society’s view

* Pay as a measure of justice

* Benefits as a reflection of justice in society

* Job losses (or gains) attributed to differences in compensation

* Belief that pay increases lead to price increases

> Stockholder’s view

* Using stock to pay employees creates a sense of ownership

* Linking executive pay to company performance supposedly increases stockholders' returns

> Manager’s view

* A major expense

* Used to influence employee behaviors and to improve the organization's performance

> Employee’s view

* Major source of financial security

* Return in an exchange between employer and themselves

* Entitlement for being an employee of the company

* Reward for a job well done

2. A definition of "compensation" is generally based on the experience level of the individual. Someone who is starting out may see compensation as a return for what they are putting in. Someone who enjoys what they do may see it as a reward. Someone who has significant experience on the other hand may see it as an entitlement, especially those who may have set up the company (or helped set it up). Therefore it is always important to see the individual and figure out what drives them, and then create compensation packages that fit their needs. Some may want solely financial incentives, while others may be happy working for less provided that other less tangible perks are provided (examples may be in-office day-care, right to bring pets to work, free food at work, or extremely generous health benefits).

3. Binus University offers salary, scholarship, allowances, etc. The network of returns is more likely to be useful if bonuses, development opportunities, and promotions all work together. I think I will add free transportation and free lunch to increase the teaching effectiveness.

4. Four policies:

* Internal alignment

>Focus - Comparisons among jobs or skill levels inside a single...