BUS681 – Compensation & Benefits
Welcome to Week 2 of BUS681 – Compensation & Benefits. This week, students examine the various compensation strategies and bases for pay that organizations use to optimize employees’ performance. Particularly, students will explore:
(a) pay by seniority or length of employee service, a strategy found in many unionized workforces that rewards employees for time on the job or with the company;
(b) merit pay, a system where employees are paid based on past performance usually during a specific and recent time period;
(c) incentive pay, a strategy used to reward employees’ current and future performance as individual contributors, as part of a department or functional group, as part of an organization-wide effort, or a combination of demonstrated performance; and
(d) person-centered pay, a system that rewards employees for acquired competencies, knowledge, and skill sets (Martocchio, 2011).
Chapters 3-5 of the text (Martocchio, 2011) provides you with an overview of varieties of different and specific pay practices within each strategy, the reasons companies use different pay practices and strategies, and the advantages and disadvantages of each practice or strategy for employees and employers. Martocchio (2011) also provides discussion on compensation plan design including criteria for measuring employees’ performance and performance appraisal or evaluation methods, which is more commonly referred to as performance management. There are four general types of performance management and there are specific tools that correspond with each type of performance management method. As we learned in Week 1, no single pay practice or strategy for compensating employees is effective for all employees or departments in any one organization, and usually, organizations use a variety of compensation practices as incentives for employees to perform at their best levels. The same can be said for performance management. No one strategy has universal appeal or application. Compensation managers design compensation plans that are most effective for the organization within the context that we explored compensation strategies last week.
Approach this week’s required reading with the same triangular perspective you used to approach last week’s readings. As you read about the various compensation practices and strategies, consider the strategies or practices that your current or a recent employer used to compensate employees. Do you think these strategies were effective? Did the compensation strategies and practices achieve desire results? Do you or did you believe that you were paid fairly? Try to be objective in your consideration of this question. All of us want to be paid well and recognized for our efforts, and many of us often believe that we should earn more than we actually do. It requires a very objective observation for someone to determine whether he or she is paid fairly. Other questions you should consider are whether pay practices are equitable for all employees across the organization, whether other pay practices or combinations of pay practices might be better at achieving desire results, and whether the overall compensation plan is a good fit for achieving the organization’s strategic business goals. Some compensation plans can be a company benefit or liability. Consider these questions as you think forward to your final paper for this course.
This week’s assignments are designed to help you evaluate the compensation strategies and practices organizations presented in the required reading (Martocchio, 2011). There are two discussion threads pertaining to compensation strategies and practices. The first discussion focuses on seniority and merit pay, whereas the second discussion focuses on incentive pay plans. There is one written assignment that requires you to discuss performance management issues as they pertain to employee compensation. For the written assignment, concentrate on the latter half of Chapter 3 beginning with the heading Performance Appraisal for the basis of your discussion. Hint: There are four (4) generic types of performance management systems. Many students confuse types of performance management methods with actual performance management tools. Be sure to discuss the types of performance management systems and not the actual tools that employers use to measure and assess overall performance, although you may use tools to support your discussion.
Discussion Post Expectations
Timely posts and responses to your fellow students are important aspects of learning in an online forum. I expect that you will engage each other following the rules of netiquette. Keep an open mind and allow your classmates to help you to expand your ideas and opinions. Learning from each other is critical because people learn from each other in most life situations. Remember to use the content of required readings and videos, as well as resources you locate on your own, in your responses in the discussion threads.
Assignment Expectations(To be given later)
I expect that you complete the assignment as required using APA format, 6th Edition and keeping to the required number of pages. Remember to check for clarity, grammar, punctuation, and spelling. Cite and reference all of your sources. You don’t want to be accused of plagiarism. Ashford provides students with exceptional resources to help you master academic writing. To access these resources, click on Ashford Writing Center or The Writing Reviser found under the Learning Resources tab in your student portal.
Please refer to your student course guide for a list of recommended resources for this course.