Chapter 8 - Compensation programs. The learning objectives for this chapter include: Describe the differences between extrinsic and intrinsic rewards as they relate to employee compensation programs; explain how compensation programs are affected by federal, state, and local laws; list and describe the most common forms of direct financial compensation;. | Compensation Programs Chapter 8 Compensation Management Compensation: The amount of money and other items of value given in exchange for work performed. Compensation package: The sum total of the money and other valuable items given in exchange for work performed. Compensation Management Extrinsic rewards: Financial, as well as non-financial, compensation granted to a worker by others (usually the employer). Intrinsic rewards: Self-initiated compensation. For example, pride in one’s work, a sense of professional accomplishment, or enjoying being part of a work team. Compensation Management Compensation management: The process of administrating an organization’s extrinsic and intrinsic reward system. Compensation Management Categorizing of jobs Pay range: The lower and upper limit of hourly wages or salary paid for a specific job. Comparison of employee pay to the local labor market Local wage rate: The prevailing pay range for distinct job categories in a specific community or labor market. Salary survey: A comprehensive review of local wage rates and pay ranges paid for one or more individual job categories. Important when developing a compensation system: Compensation Management Management of internal pay equity Linkage of pay to job performance Merit pay system: A compensation program that links increases in pay to measurable job performance. Under such a system, those workers who perform better receive proportionally larger percentage pay increases. Maintenance of open communications Important when developing a compensation system: Legal Aspects of Compensation Management Federal Legislation Minimum wage: The least amount of wages that employees covered by the FSLA or state law may be paid by their employers. State Legislation Local Legislation Living wage: The minimum hourly wage necessary for a person to achieve some subjectively-defined standard of living. Direct Financial Compensation Direct financial compensation for hospitality . | Compensation Programs Chapter 8 Compensation Management Compensation: The amount of money and other items of value given in exchange for work performed. Compensation package: The sum total of the money and other valuable items given in exchange for work performed. Compensation Management Extrinsic rewards: Financial, as well as non-financial, compensation granted to a worker by others (usually the employer). Intrinsic rewards: Self-initiated compensation. For example, pride in one’s work, a sense of professional accomplishment, or enjoying being part of a work team. Compensation Management Compensation management: The process of administrating an organization’s extrinsic and intrinsic reward system. Compensation Management Categorizing of jobs Pay range: The lower and upper limit of hourly wages or salary paid for a specific job. Comparison of employee pay to the local labor market Local wage rate: The prevailing pay range for distinct job categories in a specific .
