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Total Returns for work (Milkovich)
Transactional and Relational Returns
Pay Model (Milkovich)
Total Returns (SCB)
Total Returns for work (Milkovich)
1. Assess Total Compensation Implication- Competitive Dynamics- Culture / Values- Social and Political Context- Employees / Union Needs- Other HR System
2. Fit Policy Decisions to Strategy- Objectives- Alignment- Competitiveness- Contributions- Management
3. Implement Strategy- Design System to Translate Strategy into Action- Choose Techniques to Fit Strategy
4. Reassess the Fit- Realign as Conditions Change- Realign as Strategy Change
Stake holders’ Stake holders’ ViewsViews
Social’s ViewsSocial’s Views
Employees’ ViewEmployees’ View Managers’ ViewsManagers’ Views
ValidityValidityReliabilityReliability
AcceptabilityAcceptability UsefulnessUsefulness
TopTop
ManagementManagement
Middle ManagementMiddle Management
SpecialistSpecialist
WorkersWorkers
Strategic WorkStrategic Work(Value Creation)(Value Creation)
Tactical WorkTactical Work(Value Added)(Value Added)
Transactional WorkTransactional Work(Routine Job or (Routine Job or
non value added)non value added)
Employees’ performance depend on 3 factors :
1.) 1.) SS – Skills and ability to perform tasks.– Skills and ability to perform tasks.
2.) 2.) KK – Knowledge of facts, rules, principles and – Knowledge of facts, rules, principles and procedures.procedures. 3.) 3.) MM – Motivation to perform. – Motivation to perform.
Compensation Management FrameworkCompensation Management Framework
BusinessBusiness StrategyStrategy
HRHR StrategyStrategy
CompensationCompensationManagementManagement
- High Performance
PMS
Pay for Position- Pay Structure- Special group pay
- Low Cost
Pay for Person- Competency based Pay- Knowledge & Skill based Pay
- High Quality- Service
- Special pay for special competency- Potential based pay (Starting
rate)- High Effective- Process
Pay for Performance
- High Employee-
Satisfaction
- Merit increase- Bonus Incentive- Profit Sharing- Gain Sharing
Compensation-
ManagementCompensatio
n- Management
Compensation-
Management