1-Compensation in Knowledge Based World

7/31/2019 1-Compensation in Knowledge Based World

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WHAT IS COMPENSATION&

WHAT IS MEANT

BYCOMPENSATION MANAGEMENT ?


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WHAT IS ROLE

&

IMPORTANCEOF COMPENSATION FOR

ACHIEVING ORGANIZATIONALOBJECTIVES


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COMPENSATION


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COMPENSATION IN AKNOWLEDGE BASED WORLD

Political Social Economic battle between capitalism onone side and between communism & socialism on theother side.

Capitalism economic theory :

Profit is ok and making money is acceptable.There must be strong , direct relationship betweenwork and monitory rewards available through work.

Employees must respect money and challenges of theirwork to gain satisfaction from work performed.

Move of capitalism into knowledge based worldcenters and focus on enlightened society.The importance of knowledge demands predispositiontoward continues improvement.

To be successful in a knowledge based capitalisticworld, there must be passion for learning including

recognition of need for education.


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COMPENSATION IN AKNOWLEDGE BASED WORLD

Major problem facing USA and its leadership in acapitalistic democratic world is increasing &Unacceptable difference between income of lowerpaid and highly paid members of workforce, due to

difference in knowledge and skills. Need to redesign compensation and reward

system to improve employee morale andmotivation.

This pushed enhancement in knowledge &skills of compensation managementprofessionals.


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INTEGRATING KNOWLEDGE & SKILLSWITH COMPENSATION AND

EMPLOYEES INCOME

To be successful in knowledge based worldeach organization must make full use ofavailable technologies.

Expansion in work related knowledge & skills.

Change is inevitable in knowledge basedworld.

Knowledge demands - continuous

improvement. Difference in compensation due to difference

in levels of knowledge , skills & ability. (KSA)


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INTEGRATING KNOWLEDGE & SKILLSWITH COMPENSATION AND

EMPLOYEES INCOME

Work does pay off but to be a successful employeeone must be Willing to accept challenges, solveproblems, take risk, minimize chances of additionalcost. Enhance efficiency and productivity etc.

Organizations must value of employee satisfactionwhile making efforts for cost effective operations &should support employees in their life styleopportunities .

Re-engineering, organizational redesign, re-

structuring, lean manufacturing, operationalexcellence, cost effectiveness initiatives improvefinancial results of the organizations are rightinitiatives but relationship between work based payand employee satisfaction needs to be appreciatedas well.


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Life style & compensation. Two critical forces of pay;

Absolute . Relative.

Money makes the mare go.- Influence

behavior, motivation level. Understand relationship between money

and life style.

Money brings honor, friends, conquests& riches (john milton , a poet).

Criteria for classes in the society income,property, occupation, education


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Total Compensation

Direct Indirect

Bonuses

Gainsharing

Security Plans Pensions

Employee Services Educational assistance Recreational programs

Commissions

Wages / Salaries

Insurance Plans Medical Dental Life

Time Not WorkedVacations Breaks Holidays


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Social class is group of people of samestatus within unequal society.

Social issues due to restricted job market /

un employment for low skill, low knowledgeclass , poverty , crimes, political unrest,

individual temperament.

Social structure & income. Upper, middle & lower classes.


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LIFE STYLE &SOCIAL CLASS

1. The poverty class.

2. Working poor.

3. Lower middle class.

4. Middle- middle class

5. Upper middle class.

6. The wealthy.

7. The ultra rich.

8. Two wage earner family


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The poverty class. Mostly school dropouts.

Unemployment.

Housing problems. Living in suburbs.

25-50% income goes to rent andutilities.

Teenager mothers. Socials issues.

Emotional problems, drugs, robbery,stealing.


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WORKING POOR.

Have part or full time jobs.

Low income housing.

Some furniture & clothing. Strive to move into lower

middle class.


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Lower middle class.

Do not have luxury ofwasting money.

Just one step away fromreturning to lower incomeclass.

Mostly single earnerfamily.

Can afford to buy smallhouse .

Little or no savings,deeply in debts.

Job loss is problem. Financial problem can be

disastrous.


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Middle- middle class Monthly bills payments does not

require extensive manipulation

of family financial resources. Little savings for rainy days

begin to develop.

Can purchase extras to makelife enjoyable.

A new car every four / fiveyears.

Money for fashionable clothesavailable.

Job based income is critical.Any problem can revert back tolower middle class.


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Upper middle class. Can afford a house in a secure section of

city. Financial investments become significant.

Life style change.

Public schools are no longer sole option. Housing, clothing , furnishing begin to

have the feel of luxury.

Loss of job may reduce the family tomiddle middle class.


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The wealthy.

Not too many families in this class.

Develop saving and investment.

Good life for the remainder of their lives.

Distinctive household, furnishings is common.

Eye caching designers cloth, high performance

automobiles.

Spend 25% income in leisure activities.

Luxury is way of life.


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The ultra rich.

Known wealthiest people/ families.

William gates.( Bill gates) type.

Known families / groups


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Two wage earner family. Historically, female members of families in

lower class of society perform some kind ofactivities in addition to raising family andperforming household duties.

The job related income provide support to

move from the working lower class to lowermiddle class & to middle middle class .

The desire to enjoy life style is primarymotivator.

Make major adjustments among their work,family and recreational activities.


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EFFECTIVE

PRESENTATION

TIPS

1-Compensation in Knowledge Based World

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