Professional Documents
Culture Documents
Compensation Management PDF
Compensation Management PDF
• Social Security
– Unemployment insurance
– Retirement insurance
– Benefits for dependents
– Disability benefits
– Medicare
• Workers’ Compensation
• Family and Medical Leave
Elements of Fringe Compensation (2 of
3)
• Discretionary Benefits
– Protection Programs
• Income protection programs
• Health protection programs
– Pay for time-not-worked
• Holidays
• Vacation
• Sick leave
• Personal leave
• Funeral leave
• Cleanup, preparation, travel time
Elements of Fringe Compensation (3 of
3)
• Broad Banding
• Skill-Based Pay
External Competitiveness
• Market surveys
• Sources:
– in house
– consulting firms
– government publications
– the Web
Market survey validity?
Thousands
120
Pay Grade Maximums
110
100
90 Market Midpoint Line
80
70 Target Hiring Salaries
60
50
Pay Grade Minimums
40
30
20
10
$$Salary0
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Pay Grades
Features
• Freedom to Act 94
• Planning 20
• Policies and Procedures 49
• Problem Solving 124
• Diversity of Knowledge 59
• Skill 43
• Licenses n/a
Total: 405
Designing Pay-for-Knowledge Programs
Grade E
Annual Salary
Grade D
Grade C
Grade B
Grade A
Band A Band B
Low High
Job Worth
Employee Stock Terminology
• Stock option. A right granted by a company to an
employee to purchase a number of stocks at a
designated price within a specified period of time.
• Stock grant. A company’s offering of stock to an
employee.
• Exercise of stock grant. An employee’s purchase of
stock using stock options.
• Disposition. Sale of stock by the stockholder.
• Fair market value. The average value between the
highest and lowest reported sales price of a stock.
Common Executive Perks
• Company cars
• Financial services
• Legal services (for example, income tax preparation)
• Recreational facilities (for example, country club and
athletic club memberships)
• Travel perks (for example, first-class airfare)
• Residential security
• Tickets to sporting events
Corporate Performance Measures (1 of 3)
• Size
– Sales
– Assets
– Profits
– Market value
– Number of employees
• Growth
– Sales
– Assets
– Profits
– Market value
– Number of employees
Corporate Performance Measures (2 of 3)
• Profitability
– Profit margin
– Return on assets (ROA)
– Return on equity (ROE)
• Capital Markets
– Dividend yield
– Total return to shareholders
– Price/earning ratio
– Payout
Corporate Performance Measures (3 of 3)
• Liquidity
– Current ratio
– Quick ratio
– Working capital from operations
– Cash flow from operations
• Leverage
– Debt-to-equity ratio
– Short-term vs. long-term debt
– Cash flow vs. interest payments
Discretionary Income Expenditures
• Pension contributions
• Savings and investment
• Insurance payments
• Equity portion of mortgage payments
• Alimony payments
• Child support
• Student loan payments
• Car payments
Cash and Non cash Income Exclusions:
• Cash
– Salaries and wages
– Bonuses
– Sales commissions
– Incentives
– Professional fees
• Non cash
– Housing
– Meals
– Cars
– Allowances for cost of living differentials, education, home
leave, tax reimbursements, children’s education, and moving
expenses
In the next lecture….
• Please keep Bare Acts of
• ID Act of 1947
• Trade unions Act of 1926
• Industrial and employment standing orders
Act