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Strategic Compensation

by: Martocchio, Joe

Strategic Compensation

by: Martocchio, Joe

ISBN 13:
9780131868779
ISBN 10:
0131868772
Edition: 4th
Format: Paperback
Copyright: 01/01/2009
Publisher: Pearson College Div
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Summary

This book is well suited to a variety of students, including undergraduate and masterrs"s degree students studying compensation. Martocchio provides a framework for understanding strategic compensation that can be used by all business professionals and business majors.

Preface

xix

PART I: SETTING THE STAGE FOR STRATEGIC COMPENSATION

(97)

Strategic Compensation: A Component of Human Resource Systems

(33)

Chapter Outline

(1)

Learning Objectives

(2)

Exploring and Defining the Compensation Context

(9)

What is compensation?

(4)

Core compensation

(2)

Employee benefits

(3)

A Historical Perspective on Compensation: The Road toward Strategic Compensation

(2)

Strategic versus Tactical Decisions

(4)

Competitive strategy choices

(1)

Tactical decisions that support the firm's strategy

(1)

Compensation Professionals' Goals

(6)

How HR professionals fit into the corporate hierarchy

(1)

How the compensation function fits into HR departments

(4)

The compensation department's main goals

(1)

Stakeholders of the Compensation System

(7)

Summary

(1)

Key Terms

(1)

Discussion Questions

(1)

Exercises

(1)

Endnotes

(1)

Strategic Compensation in Action: Strategic Analysis and Contextual Factors

(33)

Chapter Outline

(1)

Learning Objectives

(1)

Strategic Analysis

(12)

External market environment

(8)

Internal capabilities

(1)

Factors That Influence Companies' Competitive Strategies and Compensation Practices

(17)

National culture

(2)

Organizational culture

(3)

Organizational and product life cycles

(12)

Summary

(1)

Key Terms

(1)

Discussion Questions

(1)

Exercises

(1)

Endnotes

(1)

Contextual Influences on Compensation Practice

(31)

Chapter Outline

(1)

Learning Objectives

(1)

Compensation and the Social Good

(2)

Employees' goals

(1)

Employers' goals

(1)

Government's goals

(1)

Employment Laws That Influence Compensation Tactics

(16)

Income continuity, safety, and work hours

(8)

Pay discrimination

(5)

Accommodating disabilities and family needs

(1)

Prevailing wage laws

(1)

Contextual Influences on the Federal Government as an Employer

(1)

Labor Unions as Contextual Influences

(1)

Market Influences

(6)

Summary

(1)

Key Terms

(1)

Discussion Questions

(1)

Exercises

(1)

Endnotes

(2)

PART II: BASES FOR PAY

(102)

Traditional Bases for Pay: Seniority and Merit

(37)

Chapter Outline

(1)

Learning Objectives

(1)

Seniority and Longevity Pay

(10)

Historical overview

104

(2)

Who participates?

106

(1)

Effectiveness of seniority pay systems

106

(1)

Design of seniority pay and longevity pay plans

107

(1)

Advantages of seniority pay

108

(1)

Fitting seniority pay with competitive strategies

108

(1)

Merit Pay

109

(3)

Who participates?

109

(1)

Exploring the elements of merit pay

109

(3)

Performance Appraisal

112

(14)

Types of performance appraisal plans

112

(10)

Exploring the performance appraisal process

122

(4)

Strengthening the Pay-for-Performance Link

126

(3)

Link performance appraisals to business goals

126

(1)

Analyze jobs

126

(1)

Communicate

127

(1)

Establish effective appraisals

127

(1)

Empower employees

127

(1)

Differentiate among performers

127

(2)

Possible Limitations of Merit Pay Programs

129

(2)

Failure to differentiate among performers

129

(1)

Poor performance measures

129

(1)

Supervisors' biased ratings of employee job performance

129

(1)

Lack of open communication between management and employees

129

(1)

Undesirable social structures

129

(1)

Factors other than merit

130

(1)

Undesirable competition

130

(1)

Little motivational value

130

(1)

Linking Merit Pay with Competitive Strategy

131

(1)

Lowest-cost competitive strategy

131

(1)

Differentiation competitive strategy

131

(1)

Summary

131

(1)

Key Terms

131

(1)

Discussion Questions

132

(1)

Exercises

132

(1)

Endnotes

133

(2)

Incentive Pay

135

(38)

Chapter Outline

135

(1)

Learning Objectives

136

(1)

Exploring Incentive Pay

136

(1)

Contrasting Incentive Pay with Traditional Pay

137

(9)

Individual Incentive Plans

146

(4)

Defining individual incentives

147

(1)

Types of individual incentive plans

147

(2)

Advantages of individual incentive pay programs

149

(1)

Disadvantages of individual incentive pay programs

149

(1)

Group Incentives

150

(13)

Defining group incentives

151

(1)

Types of group incentive plans

151

(5)

Advantages of group incentives

156

(7)

Disadvantages of group incentives

163

(1)

Companywide Incentives

163

(3)

Defining companywide incentives

163

(1)

Types of companywide incentive plans

163

(1)

Profit sharing plans

164

(1)

Calculating profit sharing awards

164

(1)

Advantages of profit sharing plans

165

(1)

Disadvantages of profit sharing plans

165

(1)

Employee stock option plans

165

(1)

Designing Incentive Pay Programs

166

(2)

Group versus individual incentives

166

(1)

Level of risk

167

(1)

Complementing or replacing base pay

167

(1)

Performance criteria

167

(1)

Time horizon: short term versus long term

168

(1)

Linking Incentive Pay with Competitive Strategy

168

(1)

Lowest-cost competitive strategy

168

(1)

Differentiation competitive strategy

169

(1)

Summary

169

(1)

Key Terms

170

(1)

Discussion Questions

170

(1)

Exercises

170

(1)

Endnotes

171

(2)

Person-Focused Pay

173

(27)

Chapter Outline

173

(1)

Learning Objectives

173

(1)

Defining Competency-Based Pay, Pay-for-Knowledge, and Skill-Based Pay

174

(2)

What is a ``competency''?

175

(1)

Usage of Pay-for-Knowledge Pay Programs

176

(1)

Reasons to Adopt Pay-for-Knowledge Pay Programs

177

(6)

Technological innovation

177

(1)

Increased global competition

178

(5)

Varieties of Pay-for-Knowledge Pay Programs

183

(4)

Contrasting Person-Focused Pay with Job-Based Pay

187

(2)

Advantages of Pay-for-Knowledge Pay Programs

189

(2)

Advantages to employees

189

(1)

Advantages to employers

190

(1)

Disadvantages of Pay-for-Knowledge Pay Programs

191

(5)

Linking Pay-for-Knowledge Pay with Competitive Strategy

196

(1)

Lowest-cost competitive strategy

196

(1)

Differentiation competitive strategy

197

(1)

Summary

197

(1)

Key Terms

198

(1)

Discussion Questions

198

(1)

Exercises

198

(1)

Endnotes

199

(1)

PART III: DESIGNING COMPENSATION SYSTEMS

200

(125)

Building Internally Consistent Compensation Systems

200

(43)

Chapter Outline

200

(1)

Learning Objectives

200

(1)

Internal Consistency

201

(5)

Job Analysis

206

(24)

Steps in the job analysis process

207

(5)

Legal considerations for job analysis

212

(8)

Job analysis techniques

220

(1)

U.S. Department of Labor's Occupational Information Network (O*NET)

220

(10)

Job Evaluation

230

(3)

Compensable factors

230

(1)

The job evaluation process

231

(2)

Job Evaluation Techniques

233

(6)

The point method

233

(4)

Alternative job-content evaluation approaches

237

(2)

Alternatives to job evaluation

239

(1)

Internally Consistent Compensation Systems and Competitive Strategy

239

(1)

Summary

240

(1)

Key Terms

240

(1)

Discussion Questions

240

(1)

Exercises

241

(1)

Endnotes

242

(1)

Building Market-Competitive Compensation Systems

243

(37)

Chapter Outline

243

(1)

Learning Objectives

243

(1)

Market-Competitive Pay Systems: The Basic Building Blocks

244

(1)

Compensation Surveys

245

(22)

Preliminary considerations

245

(6)

Using published compensation survey data

251

(4)

Compensation surveys: Strategic considerations

255

(4)

Compensation survey data

259

(6)

Updating the survey data

265

(2)

Integrating Internal Job Structures with External Market Pay Rates

267

(2)

Compensation Policies and Strategic Mandates

269

(1)

Summary

270

(1)

Key Terms

270

(1)

Discussion Questions

271

(1)

Exercises

271

(1)

Endnotes

272

(1)

Appendix: U.S. 2005/2006 Total Salary Increase Budget Survey

273

(7)

Building Pay Structures That Recognize Individual Contributions

280

(45)

Chapter Outline

280

(1)

Learning Objectives

281

(1)

Constructing a Pay Structure

281

(8)

Step 1: Deciding on the number of pay structures

281

(1)

Step 2: Determining a market pay line

282

(1)

Step 3: Defining pay grades

282

(2)

Step 4: Calculating pay ranges for each pay grade

284

(4)

Step 5: Evaluating the results

288

(1)

Designing Merit Pay Systems

289

(6)

Merit increase amounts

290

(1)

Timing

291

(1)

Recurring versus nonrecurring merit pay increases

291

(1)

Present level of base pay

291

(1)

Rewarding performance: The merit pay grid

291

(2)

Merit pay increase budgets

293

(2)

Designing Sales Incentive Compensation Plans

295

(15)

Alternative sales compensation plans

296

(12)

Sales compensation plans and competitive strategy

308

(1)

Determining fixed pay and the compensation mix

309

(1)

Designing Pay-for-Knowledge Programs

310

(4)

Establishing skill blocks

310

(1)

Transition matters

311

(1)

Training and certification

312

(2)

Pay Structure Variations

314

(8)

Broadbanding

314

(7)

Two-tier pay structures

321

(1)

Summary

322

(1)

Key Terms

322

(1)

Discussion Questions

322

(1)

Exercises

323

(1)

Endnotes

324

(1)

PART IV: EMPLOYEE BENEFITS

325

(60)

Legally Required Benefits

325

(20)

Chapter Outline

325

(1)

Learning Objectives

325

(1)

An Overview of Legally Required Benefits

326

(1)

Components of Legally Required Benefits

326

(15)

Social Security Act of 1935

326

(5)

State Compulsory Disability Laws (Workers' Compensation)

331

(6)

Family and Medical Leave Act of 1993

337

(4)

The Implications of Legally Required Benefits for Strategic Compensation

341

(1)

Summary

342

(1)

Key Terms

342

(1)

Discussion Questions

342

(1)

Exercises

343

(1)

Endnotes

344

(1)

Discretionary Benefits

345

(40)

Chapter Outline

345

(1)

Learning Objectives

345

(1)

An Overview of Discretionary Benefits

346

(1)

Components of Discretionary Benefits

347

(19)

Protection programs

347

(15)

Paid time-off

362

(1)

Services

363

(3)

Laws That Guide Discretionary Employee Benefits

366

(4)

Employee Retirement Income Security Act of 1974 (ERISA)

369

(1)

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

370

(1)

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

370

(1)

Additional Pertinent Legislation

370

(1)

Unions and Employee Benefits

371

(1)

Designing and Planning the Benefits Program

372

(9)

Determining who receives coverage

373

(1)

Financing

374

(1)

Employee choice

374

(1)

Cost containment

374

(1)

Communication

374

(7)

The Implications of Discretionary Benefits for Strategic Compensation

381

(1)

Summary

382

(1)

Key Terms

382

(1)

Discussion Questions

382

(1)

Exercises

383

(1)

Endnotes

384

(1)

PART V: CONTEMPORARY STRATEGIC COMPENSATION CHALLENGES

385

(90)

International Compensation

385

(30)

Chapter Outline

385

(1)

Learning Objectives

386

(1)

Competitive Strategies and How International Activities Fit In

386

(2)

Lowest-cost producers' relocations to cheaper production areas

387

(1)

Differentiation and the search for new global markets

387

(1)

How globalization is affecting HR departments

387

(1)

Complexity of international compensation programs

388

(1)

Preliminary Considerations

388

(5)

Host country nationals, third country nationals, and expatriates: definitions and relevance for compensation issues

392

(1)

Term of international assignment

392

(1)

Staff mobility

392

(1)

Equity: pay referent groups

393

(1)

Components of International Compensation Programs

393

(1)

Setting Base Pay for U.S. Expatriates

394

(1)

Methods for setting base pay

394

(1)

Purchasing power

395

(1)

Incentive Compensation for U.S. Expatriates

395

(3)

Foreign service premiums

396

(1)

Hardship allowances

396

(1)

Mobility premiums

397

(1)

Establishing Employee Benefits for U.S. Expatriates

398

(3)

Standard benefits for U.S. expatriates

398

(1)

Enhanced benefits for U.S. expatriates

399

(2)

Balance Sheet Approach for U.S. Expatriates' Compensation Packages

401

(5)

Housing and utilities

402

(1)

Goods and services

402

(2)

Discretionary income

404

(1)

Tax considerations

404

(2)

Repatriation Pay Issues

406

(1)

Compensation Issues for HCNs and TCNs

407

(5)

Japan

407

(1)

China

407

(1)

Mexico

407

(1)

European Union

407

(5)

Summary

412

(1)

Key Terms

412

(1)

Discussion Questions

412

(1)

Exercises

413

(1)

Endnotes

414

(1)

Compensating Executives

415

(31)

Chapter Outline

415

(1)

Learning Objectives

416

(1)

Contrasting Executive Pay with Pay for Nonexecutive Employees

416

(1)

Principles of Executive Compensation: Implications for Competitive Strategy

416

(1)

Defining Executive Status

417

(2)

Who are executives?

417

(1)

Key employees

418

(1)

Highly compensated employees

419

(1)

Executive Compensation Packages

419

(10)

Components of current core compensation

419

(1)

Short-term incentives

420

(1)

Components of deferred core compensation

421

(6)

Employee benefits: enhanced protection program benefits and perquisites

427

(2)

Principles and Processes for Setting Executive Compensation

429

(7)

The key players in setting executive compensation

429

(6)

Theoretical explanations for setting executive compensation

435

(1)

Executive Compensation Disclosure Rules

436

(1)

Executive Compensation: Are U.S. Executives Paid Too Much?

437

(5)

Comparison between executive compensation and compensation for other worker groups

437

(2)

Strategic questions: Is pay for performance?

439

(1)

Ethical considerations: Is executive compensation fair?

440

(1)

International competitiveness

441

(1)

Summary

442

(1)

Key Terms

442

(1)

Discussion Questions

443

(1)

Exercises

443

(1)

Endnotes

444

(2)

Compensating the Flexible Workforce: Contingent Employees and Flexible Work Schedules

446

(29)

Chapter Outline

446

(1)

Learning Objectives

447

(1)

The Contingent Workforce

447

(9)

Groups of contingent workers

450

(5)

Reasons for U.S. employers' increased reliance on contingent workers

455

(1)

Pay and Employee Benefits for Contingent Workers

456

(5)

Part-time employees

457

(1)

Temporary employees

458

(1)

Leased workers

459

(1)

Independent contractors, freelancers, and consultants

459

(2)

Flexible Work Schedules: Flextime, Compressed Workweeks, and Telecommuting

461

(7)

Flextime schedules

461

(5)

Compressed workweek schedules

466

(1)

Telecommuting

466

(1)

Flexible work schedules: balancing the demands of work life and home life

467

(1)

Pay and Employee Benefits for Flexible Employees

468

(1)

Pay

468

(1)

Employee benefits

468

(1)

Unions' Reactions to Contingent Workers and Flexible Work Schedules

469

(1)

Strategic Issues and Choices in Using Contingent and Flexible Workers

470

(1)

Lowest-cost competitive strategy

470

(1)

Differentiation competitive strategy

471

(1)

Summary

471

(1)

Key Terms

471

(1)

Discussion Questions

472

(1)

Exercises

472

(1)

Endnotes

473

(2)

Glossary

475

(16)

Author Index

491

(4)

Subject Index

495

Amazon no longer offers textbook rentals. We do!

Strategic Compensation

Strategic Compensation

9780131868779

0131868772

Summary

Table of Contents

Supplemental Materials

Write a Review

Amazon no longer offers textbook rentals. We do!

Strategic Compensation

Strategic Compensation

9780131868779

0131868772

Summary

Table of Contents

Supplemental Materials

Write a Review

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