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Category: Business and Industry
Date Submitted: 02/14/2014 04:05 AM
Human Resource Management Introduction to Employee Compensation and Benefits Business Management & Administration Lesson Plan Performance Objective Upon completion of this lesson, the student will develop an understanding of how organizations implement a compensation plan. Specific Objectives Students will be able to describe the goals of a compensation plan. Students will be able to develop a compensation package. Students will be able to summarize the types of pay systems. Terms Compensation– compensation is the total amount of the monetary and non‐monetary pay provided to an employee by an employer in return for work performed as required by the organization. Benefits– benefits refers to compensation other than an hourly wage or salary. Job Ranking System– the simplest method that includes job titles being listed and ranked in order of importance to the organization. Paired comparison– individual jobs are compared with every other job based on a ranking system and an overall score is given for each job. This determines the highest‐valued job and the lowest‐valued job. Job classification– every job is classified and grouped based on the knowledge and skills required for the job, years of experience, and amount of authority for that job. Point factor system– the value of a job is determined by the number of points assigned to it. The points given to a specific job are called compensable factors. Skill‐based pay– salary levels are based on the employee’s skills as opposed to the job title. Competency‐based pay– the competency based approach looks at the employee’s traits or characteristics as opposed to a specific skills set. Broadbanding– similar to a pay grade system, except all jobs in a particular category are assigned a specific pay category. Variable pay– this system provides employees with a pay basis, but links the attainment of certain goals or ...