Introduction
You will begin to transition from an examination of the roles of human resources within the organization to the study of the functions and activities performed by HR representatives. Compensation is one of the most highly visible functions of the HR department and, as such, an important center of knowledge for professionals in the field. You will be introduced this week to the basic structures and theories of compensation and the importance of getting a compensation strategy right.
Executive Compensation and Compensation Structures
J.P. Morgan, the iconic financier, is reputed to have estimated the proper compensation for an organization’s chief executive officer to be 20 times the salary of its lowest paid employee. Today, however, the average CEO is compensated at 200 times the rate of the lowest paid employee.
1. In your estimation, what should the distance between highest- and lowest-paid actually be?
Explain your reasoning for either a larger or smaller gap between employee and board member compensation and highlight potential benefits and drawbacks to your chosen compensation structure.
APA 6th edition in-text citations. Human Resource Management Class
Required Resources
Articles/Readings
Greene, R. J. (2010). Effectively managing base pay: Strategies and programs for success. Sociaty for Human Resources Management. Retrieved from PDF. Strategies and programs for success. Sociaty for Human Resources Management PDF.
This article explores the importance of base pay and what this means to both future and current employees. By reading this article you will also gain an understanding of why it is important that this is managed properly, as failing to do so can negatively impact organizational performance.
Sammer, J. (2007). Weighing pay incentives.HR Magazine, 52(6), 64–6 8.
WEIGHING PAY INCENTIVES. HRMagazine, 52(6) by Joanne Sammer. Copyright 2007 by the Society for Human Resource Management. Used by permission of the Society for Human Resource Management via the Copyright Clearance Center.
This article looks at how incentives can be managed effectively within an organization, as this can be a useful tool for companies who what to reward high performance without increasing base pay.
Smith, S., & Mazin, R. (2004). Compensation: How should employees be paid?In The HR answer book (pp. 98–116). New York, NY: American Management Association International.
The HR answer book by Shawn A. Smith. Copyright 2004 by Amacom Books. Used by permission of Amacom Books via the Copyright Clearance Center.
This book chapter looks at various issues both organizations and individual employees face when discussing compensation. Information is provided on wage and hour laws as well as how to implement a compensation strategy.
Society for Human Resource Management. (2010). Introduction to the human resources discipline of compensation. Retrieved from PDF. Introduction to the human resources discipline of compensation PDF.
This article delves into the discipline of compensation, particularly direct compensation, known as an employees pay, which is how employers attract, recognize and retain employees.
Optional Resources
Petrescu, A. I., & Simmons, R. (2008). Human resource management practices and workers’ job satisfaction. International Journal of Manpower, 29(7), 651-667. Retrieved from:http://ezp.waldenulibrary.org/login?url=http://proquest.umi.com.ezp.waldenulibrary.org/pqdweb?did=1596418721&sid=9&Fmt=3&clientId=70192&RQT=309&VName=PQD
Javed, S., Migdad, A. K., Azam, K., & Iqbal, S. (2010) Employees compensation and organization’s financial performance. Interdisciplinary Journal of Contemporary Research in Business, 1(9), 130–143. Retrieved from ABI/Inform Complete Database.
