Presenter Name: Werner Coetzee Presentation Date: 05 September

2019 Cell: 0812476579

Email waldo@mweb.com.na

Agenda 1. Introduction – Tutor

2. Welcoming of students to Vacation Class

3. ASSIGNMENT & TEST 4. What is Compensation

Management 5. Purpose of Compensation

6. HR & Finance Role 7. Group Work

8. Questions

Welcome

Full Name Address (Postal) Student number Course Name (Innovation, Creativity and Entrepreneurship) Course Code(ICE711S) Correct number of the assignment

Assignment should be neat and take note of

language use and grammar If you do not submit a typed assignment make sure

that your handwriting is legible Send Assignment – via e-mail:

collassignments@nust.na Download electronic assignment book available in

MSWord format from: http://www.nust.na/centres/docs/coll/col assbook.doc

• Apply the concept of

compensation management 1

•Search for and develop

compensation benefits and

structures 2

•Design and evaluate job roles,

competence and job evaluation

•Develop your own pay structures

from scratch

3

• Research the best international compensation management

• Structure and manage successful wages pay for your organisation

4

Components of Rewards System

Compensation of Compensation of Employees

Extrinsic Rewards

Indirect compensation

Unemployment

Medical expenses

Retirement

Life Assurance

Direct compensation

Basic salary

Overtime

Commission

Bonuses

Non Financial rewards

Impressive title

Personal Secretary

Intrinsic rewards

Direct Compensation

Personal growth

Responsibility

Interesting work

Job freedom

Recognition

Objectives of

Compensation

Attract the best

qualified

applicants

Retain suitable

employees

Motivate

employees

Comply with

legal

requirements Maintaining

Equity

External equity

Internal equity

Rewarding good

performance and

providing incentives

for desired behavior

Maintaining cost

effectiveness

Providing for

flexibility and

administrative

efficiency

Compensation benchmarking is the process of

using internal job descriptions to match to

established salary survey jobs in order to identify

the external market rate for each benchmark position.

Job evaluation is the process of

analyzing and assessing various jobs

systematically to ascertain their relative

worth in an organization.

Job evaluation is an assessment of the

relative worth of various jobs on the basis

of a consistent set of job and personal

factors, such as qualifications and skills required.

Organizations that wish to pursue (or refresh) their market benchmarking project

should familiarize themselves with the following four steps.

Defining Compensation Philosophy

To define your organization’s compensation philosophy, ask yourself a few questions.

First, who is your competition for labor? The answer is as simple as understanding from

where you draw applicants. Competition may be from employers in the same industry

or geographic area, or those similar in size, sales revenue, or operating budget. The

answer to this question may be different for different job categories.

Second, how do you want to pay your employees compared to the competition? Do

you want to lead, match, or lag the marketplace? This question goes beyond just base

pay; you should also take into consideration incentives, overtime, stock, flexibility,

career advancement, and benefits packages. Targeting base pay below market is

acceptable only if total cash compensation is targeted above the marketplace.

Selecting Surveys

The answers to the questions in Step 1 are necessary for Step 2 – selecting surveys.

The four major groups of survey providers are:

•Associations for industries, professionals, or employers

•Consulting firms

•Government agencies

•Local business groups such as chambers of commerce, industrial councils, or human

resource networking groups

When looking for survey sources, here are a few rules to follow:

•Look for current data. Avoid using surveys more than 18 months old.

•Look for appropriate benchmark positions. The positions included in a survey should

be common, easy to identify, found in most organizations, and well defined.

•Look for helpful statistics such as mean, median, and percentile data. These are the

numbers you will need to utilize to ensure the project aligns with your market pricing

strategy.

•Look for strong participation numbers. Note the number of organizations participating

in the survey, the number of companies responding for each individual benchmark

position, and the number of employees represented by the data.

•Avoid anti-trust violations. All private-sector data should be provided in an aggregate

format and not by individual employer, even if coded.

•Do not rely on just one source. Utilizing multiple quality sources will help to ensure that

you are getting a good representation of the labor market.

Organizations that wish to pursue (or refresh) their market benchmarking project

should familiarize themselves with the following four steps.

Matching Jobs

With the collection of surveys, you are now ready for Step 3 – matching jobs. Consider

jobs that match 75 percent of your position’s duties to be good matches.

Applying Data

The final step is to apply all the data collected. Once data is collected from salary

surveys, it’s imperative to age (or trend) the data, weight the data, and calculate a final

composite base wage.

Variable pay is an incentive or bonus

employers pay to employees whose performance

meets or exceeds company expectations,

provided the company meets its own goals for productivity and profitability.

The main factors affecting international

compensation strategy are;

social contract

culture

trade union

ownership and capital markets, and managers’ autonomy.

Acting as board advisors, compensation

committees recommend, oversee and

approve compensation in the form of

corporate equity, stocks, perquisites and other

benefits.

They also oversee employment contracts in

conjunction with board oversight and, under

some circumstances, with shareholder approval

Organisations use a compensation strategy to

define how it views and manages employee pay

and benefits. ...

An effective compensation strategy motivates

current employees and is used as a tool to attract

new ones. People often think of compensation as merely a salary.

7 Keys To An Effective Compensation Strategy

Budget Allocation

Develop Salary Ranges

Salary Audits

Benefit Package

Performance Management System

Legal Compliance

Structured Administration

Design of Compensation System

The first step in designing a

successful compensation system is to fully

understand the strategy and goals of your

organization.

This should be the foundation for the design of

all pay- and rewards-related programs. Too

often a compensation strategy is developed in

a silo without giving this any thought

whatsoever

There are two ways companies can create

their compensation plans for base salary:

Benchmarking (or market pricing) where each job

is assigned an individual salary range based on

market trends.

Pay grades, where jobs are grouped and salary ranges apply to each group.

Creating a salary structure, Steps to follow:

Establish value for each position in your company. ...

Consider your company's competitive posture. ...

Define compensable leverage for your company. ...

Look at external inequalities. ...

Develop a salary structure for your organization.

Group work