Chapt. 1

• Compensation & Organizational Strategy– Support the strategic plans/actions of organization

Accomplishing organizational strategy begins with determining:

1) Work that must be performed

2) Kinds and levels of knowledge/skill required

3) Quality of people needed

4) Rewards the organization can offer

Social Structure and Income

• Upper– Ultra rich > $ 1,000,000 < .05 of 1%– Wealthy 250,000-1,000,000 < 2%

• Middle– Upper Middle 100,000-250,000 6%– Middle Middle 60,000-100,000 25%– Lower Middle 35,000-60,000 37%

• Lower– Working Poor 19,000-35,000 17%– Poverty to 19,000 13%*Family of Four

Chapt. 2

• Page 16 – Compensation System

• Page 18 – Compensation Dimensions/Components

• Page 21 – Noncompensation System

Chapt. 3

• Major parts of compensation program

– Base wages and salaries– Wage and salary add-ons– Incentive programs– Benefits & services

Determining Rates of Pay

• Kinds/levels of KSA’s

• Kind of business– Page 28 & 29

• Union-nonunion status

• Capital intensive vs. labor intensive

• Size of business

• Philosophy of management

• Total compensation package• Geographic location

– Page 31

• Supply & demand of labor• Profitability of firm• Employment stability• Gender difference• Employee tenure & performance

Jobs & Pay in U.S.

• Global environment– Page 35

• Deregulation & takeovers– Airlines– Trucking– Communications

Major Economic Theories

• Page 39

• Classical wage theories

• Wage control theories

• Justification theories

• Behavioral economics theories

• Organizational economics theories

• Wage supply/demand theory– Page 42