Compensations & Safety

Hosam Sheikh Al-EidWalaa’ Musallam

Safaa S.Y. Dalloul

Prepared by: Reviewed by:

What is Compensation?Compensation is the total of all rewards

provided employees in return for their services.

Compensation administration is one of management’s most difficult and challenging human resource areas, as it contains many elements and has a far-reaching impact on an organization’s strategic totals.

Kinds of compensations

Compensations can be divided into two categories:

A. Financial compensations:

Direct financial compensations (wages, salaries, commissions and bonuses).

Indirect financial compensations.

Kinds of compensations

B.Non-financial compensation:

• The various rewards comprise a total compensation system.

• Historically, compensation practitioners have focused primarily on financial compensation and benefits.

• To remain competitive, organizations are increasingly rewarding employee performance that influences their key goals.

Financial Compensation Kinds of financial compensations

Direct financial compensations: is the pay that a person receives in the form of wages, salary, bonuses and commissions.

Indirect financial compensations (benefits): consists of all financial rewards that are not included in direct compensations.

Equity In Financial Compensations (What)

Equity: is the perception by workers that they are being treated fairly.

Fair pay treatment for employees.

Equity In Financial Compensations (How)External equity: exists when a firm’s employees receive pay

comparable to workers who perform similar jobs in other firms.

Internal equity: exists when employees receive pay according to the relative value of their jobs within the same organization.

Employee equity: exists when individuals performing similar jobs for the same firm receive pay according to factors unique to the employee.

Team equity: is achieved when teams are rewarded based on their group’s productivity.

Equity In Financial Compensations (Why)

Inequity may make employees feel that their compensation is unfair, and then they may leave the firm. A great damage may result for the firm if the employees choose not to leave and to restrict their efforts.

Note: reward and compensation has the same meanings.

Reward (compensation) Objectives

Any organizational reward system has three behavioral objectives:

1) Membership behavior to recruit and retain a sufficient number of qualified workers

2) Task behavior to motivate employees to perform to the fullest extent of their capabilities

3) Compliance behavior to encourage employees to follow workplace rules and undertake special behaviors beneficial to the organizations without direct supervision or instructions.

Reward techniquesInternal equity refers to comparisons between jobs or

skill levels inside the organization, to achieve the organization's goals.

Internal equity is established through three reward techniques:

Job analysis Job evaluation Appraisal

Now, I am going to discuss the job analysis then Hosam will discuss the job evaluation.

Reward techniques: job analysis

Knowledge on jobs and their requirements is collected through job analysis, which is the systematic process of collecting and evaluating information about the tasks, responsibilities and the context of a specific job.

Job analysis consists of two mains stages: (How)

Data collection (Questionnaire, Interview, Observation, Test…etc)

The application of that data by the preparation of job descriptions, job specifications and job standards.

Reward techniques: Job evaluation

Job evolution is a systematic process designed to determine the relative worth of jobs within a single work organization. The job evolution process comprises of four steps:

1) Gather data2) Select compensable factors 3) Evaluate the job (ranking, job-grading, factor

comparison, point method)4) Assign pay to the job

Establishing Pay Levels Determining the right pay means combining the

results of the job analysis and job evolution processes and market pay data.

Although the pay levels within an organization reflect external competitiveness and internal equity considerations, the decision on the final pay level – the organization’s pay policy – will be determined by many factors, including competitive strategy, HR strategy, reward objectives, organizational design and culture.

SafetyHealth Safety and Security

After the attack of 11/9/2001, the world has hanged a great deal and it becomes necessary for organizations to be prepared to assure a safe and secure workplace.

Health Safety and Security

Procedures may be used to ensure safe and secure workplace include the following:

Selection of people responsible for implementing evacuation plans.

Training of key personnel.A communication system for alerting employees.A plan informing employees including disabilities of

what actions to be taken.A description of work –site details; its capabilities

and systems.

Health Safety and Security

Safety: the protection of employees from injuries caused by work-related accidents.

Health: an employee's freedom form physical or emotional illness.

Security: protection of employer facilities and equipment from unauthorized access and protection of employees while on work premises or work assignments.