Establishing Strategic Pay Plans Compensation is more than just a paycheck. In HRM, a compensation package can include pay, health-care benefits, and other benefits such as 401(k) plans. Fair employee compensation is beneficial to both the employee and the organization (Human Resource Management, 2016). Other considerations are legal, union, company strategy and equity. Legal considerations include, the Fair Labor Standards Act, which governs matters such as minimum wages and overtime pay. Specific categories of employees are exempt from the act or certain provisions of the act, particularly its overtime provisions. The Equal Pay Act of 1963 and the Employee Retirement Income Security Act are other important laws that need to be considered DelPo & Guerin, 2019).
Pay for Performance and Financial Incentives
In designing an effective financial incentive plan, it’s important to understand the relationship between money and motivation.
Abraham Maslow said that people have a hierarch of five types of needs and that people are first motivated to satisfy each lower order need.
Frederick Hertzberg said the best way to motivate someone is to organize the job so that it provides the feedback and challenge that helps satisfy the person’s higher-level needs.
Edward Deci found that extrinsic rewards may actually detract from a person’s intrinsic motivation. Victor Vroom’s expectancy motivation theory says a person’s motivation depends on expectancy, instrumentality, and valence.
Psychologist B. F. Skinner’s behavior modification based approach means changing behavior through rewards or punishments that are contingent on performance.
Several incentive plans are particularly suited for individual employee incentives and recognition programs.
Benefits and Services
It’s important that all managers understand the benefits picture today. In addition to the fact that benefits are very important to employees, the other big issue, of course, is that benefits in general and health care costs in particular are rising very fast. About 78% of employees cite health care benefits as most crucial to retaining them. Employers offer both required and voluntary benefits. Employees are looking for choice in their benefits plans as well as in their work schedules. Flexible benefits programs as well as flexible work schedules are important considerations.
respond to the following using the same headings as below in your post: Exempt or Non-Exempt: What is the difference between exempt and non-exempt jobs? Negotiating Pay Benefits: You are applying for your dream job and are at the point of negotiating salary and benefits. Identify your dream job and the geographical location of the job. What questions would you ask your prospective employer concerning benefits? Describe the benefits package you would try to negotiate for yourself.
a. Create a five step incentive plan