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Company
LOGO
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Strategic CompensationStrategic Compensation
Strategic Analysis & Contextual FactorsStrategic Analysis & Contextual Factors
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Company
LOGO
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You Would Learn AboutYou Would Learn About
Strategic Analysis of Compensation
External Market Environment
Internal Capabilities
Factors Influencing Competitive Strategies and
Compensation Practices
National Culture
Organizational Culture
Organizational & Product Life Cycle
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Company
LOGO
www.company.com
Strategic AnalysisStrategic Analysis
Entails an examination of a companys external
market context and internal factors.
Examples of external market factors include
industry profile, information about competitors,
and long term growth prospects.
Internal factors encompass financial condition
and functional capabilities.
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Company
LOGO
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External Market EnvironmentExternal Market Environment
1. Industry Profile
Describe such basic industry characteristics as sales
volume, the impact of relevant government regulationson competitive strategies, and the impact of recenttechnological advancements on business activity.
2. Competition
Companies take stock of competitors business activitiesto help position themselves in the market
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Company
LOGO
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External Market EnvironmentExternal Market Environment
3. Foreign Demand
Most companies are interested in foreign demand for
their products or services because such demand is anindicator of additional sales revenue potential.
4. Industrys Long Term Prospects
Long term prospects set the backdrop for strategicplanning because these prospects are indicators ofcompanies futures.
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Company
LOGO
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External Market EnvironmentExternal Market Environment
5. Labour Market Assessment
Represent key activities, companies should carefully
assess the labour market to determine the availability ofqualified employees.
6. Occupation Specific Considerations
Qualifications and Trainings
Job Outlook
Typical Earnings Range
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Company
LOGO
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Internal CapabilitiesInternal Capabilities
1. Functional Capabilities
2. Human Resource Capabilities
3. Financial Condition
Operating Requirements
Capital Requirement
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Company
LOGO
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Factors Influence Competitive StrategiesFactors Influence Competitive Strategies& Compensation Practices& Compensation Practices
1. National Cultures
Refers to the set of shared norms and beliefs among
individuals within national boundaries who areindigenous to the area.
a. Power Distance
Is the extent to which people accept a hierarchicalsystem or power structure in companies.
b. Individualism-Collectivism
Is the extent to which individuals value personalindependence or group membership.
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Company
LOGO
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National Culture
Power Distance
IndividualismCollectivism
UncertaintyAvoidance
Masculinity Femininity
Organizational Culture
Traditional Organizational
Hierarchy Flatter Organizational
Structures
Team Orientation
Organizational andProduct Life Cycle
Introduction
Growth
Maturity
Decline
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Company
LOGO
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Social Securities Act Workers
CompensationLaws
Family & MedicalLeave Act
Health Insurance Disability Insurance
Life Insurance
Retirement Plans
Paid Time-off
Accommodationand Enhancement
Cost of Living
Seniority
Merit
Incentive
Person-Focused
Hourly Wages
Annual Salary
CoreCompensation
Adjustment toCore
Compensation
LegallyRequiredEmployee
Benefits
DiscretionaryEmployee
Benefits
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Company
LOGO
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Core JobCharacteristics
Skill Variety
Task Identity
Task Assignment
Autonomy
Feedback
CriticalPsychological State
ExperiencedMeaningfulness
ExperiencedResponsibility for Work
Outcomes
ained Knowledge ofResults for Work
Acti ities
Benefit toEmployers
- Lower Turno er,
- LowerAbsenteeism,
- Enhanced JobPerformance,
- reater JobSatisfaction
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Company
LOGO
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Core CompensationCore Compensation
1. Base Pay
Represents the monetary compensation employeesearn on a regular basis for performing their jobs.
Hourly pay and salary are the main forms of base
pay.
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Company
LOGO
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Adjustment to Core CompensationAdjustment to Core Compensation
1. Cost of Living Adjustments (COLA)
Represent periodic base pay increases that are basedon changes in prices, as indexed by the Consumer
Price Index (CPI). COLAs enable workers to maintain
their purchasing power and standard of living by
adjusting base pay for inflation.
Consumer Price Index (CPI)
Indexes monthly price changes of goods and services that people
buy for day to day living
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Company
LOGO
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Adjustment to Core CompensationAdjustment to Core Compensation
2. Seniority Pay
Systems reward employees with permanent additions to
base pay periodically, according to employees length ofservice performing their jobs.
3. Merit Pay
Programme reward employees with permanent increases tobase pay according to differences in job performance.
4. Incentive PayAs compensation, other than base wages or salaries, thatfluctuates according to employees attainment of somestandard, such as a pre-established formula, individual orgroup goals, or company earning
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Company
LOGO
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Adjustment to Core CompensationAdjustment to Core Compensation
5. Person Focused Pay
Generally reward employees for acquiring job-related
competencies, knowledge, or skills rather than fordemonstration successful job performances. (Skill BasedPay or Pay for nowledge Plans)
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Company
LOGO
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Employees BenefitsEmployees Benefits
1. Legally Required Benefits
Are protection programmes, that attempt to promoteworker safety and health, maintain family income streams,and assist families in crisis.
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Company
LOGO
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Discretionary BenefitsDiscretionary Benefits
1. Protection Programme
Provide family benefits, promote health, and guard againstincome loss caused by catastrophic factors such asunemployment, disability, or serious illness.
2. Paid Time Off
Provides employees with pay for time when they are not
working, such as vacation.3. Services
Provide enhancements such as tuition reimbursement andday care assistance to employees and their families
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Company
LOGO
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Relationship B/W Strategic & Tactical DecisionsRelationship B/W Strategic & Tactical Decisions
Strategic Decision
Competitive Strategy
Human Resource Strategy
Compensation Strategy
General Tactical HRDecision
Recruitment
Selection
Performance Appraisal
Compensation
Training
Specific Tactical HRDecision (Compensation
Examples)Seniority Pay
Merit Pay
Incentive Pay
Pay for
nowledge
Skill Based Pay
Broad banding
Two Tier Pay Structures
Discretionary Benefits Options
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Company
LOGO
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Compensation Professionals GoalCompensation Professionals Goal
Compensation, Recruitment, and Selection
Compensation & Performance Appraisal
Compensation & Trainings
Compensation & Career Development
Compensation & Labour Management Relation
Compensation & Employee Termination
Compensation & Legislation
Internally Consistent Compensation System
Market Competitiveness
Recognizing Individual Contributions
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Company
LOGO
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Stakeholders of the Compensation SystemStakeholders of the Compensation System
Employees
Line Managers
Executives
Unions
Government
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Company
LOGO
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