Lecture Notes on Compensation and Job Analysis

Flashcards about human resources. The flashcards cover topics such as compensation, salary structures, and the impacts of mismatching employees to jobs.

Society's perspective on employee salaries

Sees it as a measure of justice and a reflection of equity or justice in society. Pay increases often lead to price increases.

Stockholders' perspective on employee salaries

Interested in how employees are paid. Using stock to pay employees creates a sense of ownership that will improve performance, increasing stockholder wealth.

Managers' perspective on employee compensation

Sees compensation as a major expense. Good pay can influence employee behaviors and improve organization performance, affecting the quality of work and attitude.

Employees' perspective on compensation

See compensation as a return in an exchange between their employer and themselves. It is an entitlement or a reward for a job well done and is the major source of financial security, playing a vital role in economic and social well-being.

Legal Mandates

Legal requirements, such as minimum wage laws, equal pay acts, and overtime regulations, that directly shape how companies structure their compensation to remain compliant and avoid legal penalties.

Labor Market Trends

Trends such as skill shortages, rising demand for certain professions, or increased remote work options that influence compensation strategies. Employers may need to offer competitive pay or additional benefits to attract and retain top talent.

Economic Conditions

Economic health-such as during recessions or economic booms-that affects a company's ability to offer raises, bonuses, or new hires. Poor economic conditions often lead to wage freezes or restructuring, while booming economies may trigger wage increases to retain staff.

Inflation Rate

The general price of goods and services rising over time. Companies may need to increase salaries to help employees keep up with the higher cost of living.

Technological Advancements

The rise of automation, AI, and digital platforms that affects job roles, skill requirements, and market demand, thereby impacting compensation structures.

Internal Alignment

Organizing jobs within the company in a clear structure and making sure pay differences between jobs are fair based on the value and responsibilities of each job.

Knowledge and Skills Involved

Jobs that need more knowledge, education, or special skills usually deserve higher pay.

Working Conditions

If the job is done in tough or dangerous environments, the employee may get extra pay to match the risk or discomfort.

Value Added to the Company

Jobs that directly help the company make more money or improve business results may receive higher pay.

Low Job Performance

If the employee doesn't have the right skills or knowledge for the job, they may not perform well and make mistakes.

Low Job Satisfaction

Employees who feel they are not suited for their job may feel unhappy, bored, or frustrated.

High Employee Turnover

When employees are not happy in their roles, they are more likely to leave the company.

Increased Training Costs

If employees are placed in the wrong job, the company may need to spend more money and time training them.

Poor Teamwork and Communication

Employees in the wrong roles may struggle to work well with others, causing team conflicts or delays.