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7/30/2019 Compensation Management-WILLAMETTE INDUSTRIES pay at risk.pptx
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GROUP 3:
ANKITA SHARMA-121309
HEMLATA JESWANI-121321
PREETI NERLEKAR-121337
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ABOUT:
Paper and wood products
Market leader
Large diversified group
INDUSTRY:
Cyclical industry
Competitive
Highly capital intensive
ORGANISATIONAL STRATEGY:-Integration and self
sufficiency
-Quality focused
-Low cost
ORGANIZATIONAL CULTURE:-Autonomy
-Employee oriented
-Good to shareholders
WILLAMETTE
INDUSTRIES
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Lead or match
the market
Attraction
Retention
PAYPHILOSOPHY
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Behavior
based
Senioritybased
PAYASSESMENT
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Monetary
benefits
Non-monetarybenefits
PAY FORM
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Decentralized
DynamicPAY PLANDESIGN
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TotalRewards
TotalCompensation
CashCompensation
BasePay
MeritPay
Benefits
Retirement
plans
StockPurchaseOptions
RelationalReturns
Employment
Security
Challengi
ngWork
Learning
Oppor
tunities
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ORGANISATIONAL STRATEGY.. COMPENSATION STRATEGY..
Customer centric
Quality focused Low cost
No per sale incentive
No short term
incentives
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Why long termincentives ? Why not short termincentives?
Inter dependent natureof industry
Cyclical nature of the
industry. Capital intensive with
long term investments.
Encouragement of longtenure of the
employees. Easy to understand and
administer.
Conflicts betweendifferent business units.
No individual control.
ROI cannot be measuredin short term.
May bring in a feeling ofinsecurity andinstability.
Difficult to measureindividual employeeperformance.
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With the pressure for incentive pay growing
from outside the organization; should it
redefine its pay practices?
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The organization should not redefine its pay
practices..
Why should it not do so ?
a) The nature of the industry does not supportthe pay practices followed by the
competitors.
b) Employees are satisfied with the current
compensation system.
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Maslows hierarchy theory
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Herzberg
Theory
Hygiene
FactorsSatisfiers
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Principles of Dynamic Pay1. Aligning of compensation with the organizations
culture, values and strategic business goals
2. Integrate pay with other people process
3. Democratize the pay process
4. Demystify compensation
5. Measure Results
6. Refine. Refine again. Refine more
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There is no one size fits all strategy
Short term incentives are not always the only way tomotivate employees
The alignment of compensation strategy to thecorporate strategy is a key determinant in the
success of the organization.
When changing its compensation strategy, anorganization should consider both internal and
external factors affecting it.
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