Unit 7: Pay Structure Decisions

Employer’s View

In a/n _______ of pay, it significantly impacts employee attitudes and behaviors that aligns with their motivation and interest for the broader organization

Employee Pay

_________ can be seen as a motivational tool for aligning employees’ interests with broader organization

Policies

_______ regarding wages, salaries, and other earnings affect overall income and standard of living

True

Both level of pay and fairness compared with others’ pay are important

True or False

Status and Success

Employee pay can be seen as a sign of ________

Pay Structure

Under the salary level decisions, the _________ consist of the Pay Level and Job Structure

Pay Level

It refers to the relative pay of different jobs (job structure) and how much they are paid (pay level)

Job Structure

It refers to the relative pay of jobs in an organization

Individual Pay

It refers to the actual salary an individual employee receives within a pay range for a job. It is determined by factors such as performance, experience, skills, and tenure, allowing employees in the same job and pay grade to earn different salaries based on their individual contributions and qualifications.

Equity Theory and Fairness

What theory is exhibited from the image shown?

False

According to the Equity Theory and Fairness, people evaluate the fairness of their situations by focusing on themselves than those of other people

True or False

True

According to the Equity Theory and Fairness, people compare their own ratio of perceived outcomes (pay, benefits, working conditions) to perceived inputs (effort, ability, experience) to the ratio of a comparison other.

True or False

External Equity

It focuses on what employees in other organizations are paid for doing same jobs

External Equity

Market Pay Surveys falls under which equity of the Social Comparisons of Pay?

Internal Equity

It focuses on what employees within the same organization are paid

Internal Equity

Job Evaluations falls under which equity of the Social Comparisons of Pay?

True

Organization must sell goods and services at a quantity and price that brings a sufficient return on investment

True or False

Product Market Competition

With market pressures, ________ places an upper bound on labor costs and compensation

Labor Costs

________ include direct and indirect payments and staffing levels

Labor Market Competition

The _________ reflects number of workers available relative to the number of jobs available

Pay Levels

Shortages and surpluses influence ________

False

Organizations not competitive in the labor market will remain to attract and retain employees of sufficient number and quality

True or False

Labor Market Competition

The ________ also places a lower bound on pay levels

Pay Policies and Programs

__________ are the most important HR tool, as it evaluate in terms of cost and returns, whether it should attract, retain, and motivate a high-quality workforce.

Competitive Environment

The range of pay depends on the _________

Efficiency Wage Theory

This theory posits that employees that are paid more than they would receive elsewhere will put forth effort to retain good jobs.

Benchmarking

It refers to comparing an organization’s practices against those of the competition

How should employees be trained to improve job performance?

Which of the following is the odd one out in relation to Market Pay Surveys?

• Which employers should be included in the survey?

• Which jobs are included in the survey?

• How should employees be trained to improve job performance?

• If multiple surveys are used, how are all rates of pay weighted and combined?

Return of Investment

In Market Pay Surveys, it is important to determine the _________ in employees using revenues/employees and revenues/labor costs ratio

Rate Ranges

It is also known as Pay Grades

Rate Ranges

It permit company to recognize differences in employee performance, seniority, and training in setting individual pay

True

Rate ranges may be single rate for all employees within the same job

True or False