Pay Model
Deferentiate total rewards and total compensation, in terms of their components
Total rewards = total compensation + relational returns
What are the compensation policy choices?
objectives, internal alignment, external competitiveness, employee contributions, management
According to tournament theory, why do organisations justify large pay differentials between hierarchical levels?
Because they act as incentives, motivating employees to compete for promotions
name the 3 job evaluation methods
job ranking, job classification, point method
What are the three strategic objectives of compensation in the pay model?
Efficiency, fairness, and compliance
What is the difference between “Best Fit” and “Best Practices” approaches to pay strategy?
“Best Fit” emphasises alignment and context-specific customisation, while “Best Practices” assumes universal pay practices can yield success in any organisation
What are the three characteristics that define an organisation’s internal pay structure?
The number of levels, the pay differentials between levels, and the criteria used to determine those levels and differentials
differentiate skills and competencies
Skills are specific, technical abilities focused on tasks (e.g., coding in Python).
Competencies are broader combinations of knowledge, behaviours, and attitudes linked to effective performance (e.g., leadership, communication)
Define relational returns, provide 3 examples
Psychological returns
Recognition and status, employment security, learning opportunities, challenging work
What are the three tests used to determine whether a pay strategy provides a competitive advantage?
Alignment, differentiation, and value addition
In strategic choices of internal structure design, which type is typical of organisations like McDonald’s or Walmart, with well-defined jobs and pay steps?
A tailored or hierarchical structure
What is the tool for quantifying/evaluating competency levels called?
behavioural descriptors
What does "AMO" mean in the "AMO model" for understanding why HRM practices lead to better organizational performance.
ability/skill enhancing practices, motivation enhancing practices, and opportunity enhancing practices
List 4 job analysis methods
interviews, questionnaires, focus groups, observations, job diaries/journals
To use a skill-based pay structure, what methods are used to determine if someone has the needed skill? Name 4
Peer review, on-the-job demonstrations, tests,
course completion