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MGMT 4030 - Managing Employee

Reward Systems
Compensation Goals and Strategy
Basic Goals of a Compensation System
Attract Employees
Retain Employees
Motivate Employees
Compliance with Pay Laws
Administrative Simplicity
Cost Effective
MGMT 4030 - Managing Employee
Reward Systems
Compensation: Strategic Choices
(Gomez-Mejia, Balkin & Cardy, 1998)
Job-based vs. Individual Pay
Fixed vs. Variable Pay
Internal vs. External Equity
Performance vs. Membership
Egalitarian vs. Elitist System
At Market vs. Above or Below Market
Monetary vs. Non-Monetary Rewards
Open Pay vs. Secret Pay
Centralized vs. Decentralized Pay
MGMT 4030 - Managing Employee
Reward Systems
Impact of Strategic Pay Choices on the
Organization
Strategic Choices can Strengthen or Dilute
Organization Culture
Ex. What choices would support a Culture of High
Employee Involvement and Empowerment?
Ex. What choices would support a culture of Security
and employee Loyalty
Strategic Choices should Support Human
Resource and Business Strategies
Ex. What choices would support an HR strategy of
Promote from Within?
Ex. What choices would support a Business strategy of
Innovation and Growth?