School of Business & Economics
Course Modules
HRMN 4831
Total Rewards
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Course Development Team:
Curriculum Developer: Marnie Wright, MA, BA
Curriculum Consultant: Biggi Weischedel, PhD
Instructional Designer: Fränzi Ng, EdD
Course Editor: Chris Ward, BA
Media: Jon Fulton, BA , Robline Forsythe, BA
Associate Dean: Raymond Cox - PhD, M.B.A, B.Comm, B.Sc. (Associate Dean)
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Table of Contents
Module 1: Impact of Rewards on Attraction Retention and Performance
Management ............................................................................................. M1‐1
Module 2: Strategic Framework for Compensation ................................................ M2‐1
Module 3: Behavioural Framework for Compensation .......................................... M3‐1
Module 4: Components of Compensation Strategy ................................................ M4‐1
Module 5: Formulating Rewards and Compensation Strategies .......................... M5‐1
Module 6 Job Evaluation .............................................................................................. M6‐1
Module 7: Evaluating the Labour Market ................................................................. M7‐1
Module 8: Evaluating Individuals .............................................................................. M8‐1
Module 9: Designing Performance Pay and Indirect Pay Plans ........................... M9‐1
Module 10: Implementing Managing and Evaluating
Compensation Systems ......................................................................... M10‐1
HRMN 4831: Total Rewards
M1-1
Module 1: Impact of Rewards on Attraction
Retention and Performance
Management
Overview
When individuals choose a profession or an organization to work for they carefully
make that decision by weighing a variety of factors. Do I enjoy this type of work?
Will I be successful in the role? Will I be compensated well for my efforts? The
notion of overall compensation or total rewards is what we will learn about in this
module. What does the term total rewards actually mean? And how does the
concept of total rewards impact the individual decisions that people make about
whether they want to work for, or continue working for, an organization?
There are many different ways to structure the way that organizations pay
employees. For example, some types of work are paid using an hourly wage, while
other types of positions are paid a monthly salary. For some organizations stock
options or bonuses are the norm, while in others professional development is a
valued reward. The expectation of hourly workers is that they are paid precisely for
the time they spend at work; whereas, salaried employees are expected to achieve
their job outcomes with less focus on the specific hours spent at work. The
compensation structure has an impact on the organizational outcomes and serves to
motivate employee performance.
“The purpose of a compensation system is to help create a willingness among
qualified persons to join the organization and to perform the tasks the
organization needs” (Long, 2014, p. 8).
Topics
1. Role and purpose of compensation
2. Goals of a compensation system
Learning Outcomes
When you have completed this module, you should be able to:

Recognize the impact of rewards on attraction, retention, and performance
management

Define the goals of a reward and compensation system
TRU Open Learning
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Module 1: Impact of Rewards on Attraction Retention…
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: The Role and Purpose of Compensation
Activity 1: Finding Your Why
Activity 2: Exploring Intrinsic and Extrinsic Motivations
Activity 3: Prioritizing Extrinsic Rewards
Activity 4: Read and Reflect: Intrinsic Motivation
Topic 2: Goals of a Compensation System
Activity 5: Read and Reflect: Goals of a Compensation and
Reward System
Activity 6: Terminology Self‐Assessment
Resources
The following are resources you will need to complete this module:

Long, R. J. (2014). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Kadian‐Baumeyer, K. (n.d.). Understanding employee compensation [Video
file]. Retrieved from Study.com website: http://study.com/academy/lesson/
understanding‐employee‐compensation.html.

Sinek, S. (2009, September). Simon Sinek: How great leaders inspire action
[Video file]. Retrieved from https://www.ted.com/talks/
simon_sinek_how_great_leaders_inspire_action#t‐20933.

Thomas, K. (2009, November/December). The four intrinsic rewards that
drive employee engagement. Ivey Business Journal. Retrieved from
http://iveybusinessjournal.com/publication/the‐four‐intrinsic‐rewards‐that‐
drive‐employee‐engagement/ (Available in your online course materials)
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Note: You will be asked to search TRU Library’s databases to find some of
the articles. For information on how to access these resources, refer to the
Course Guide.
Topic 1: The Role and Purpose of Compensation
Considering that compensation and benefits often account for over 70% of the
overall cost of operations, the design of a compensation system needs to strike the
right balance between being cost effective and competitive enough to attract high
quality talent. For some organizations, the compensation strategy is a way of
defining and shaping organizational culture.
For example, a Canadian airline, WestJet has a compensation strategy which makes
employees owners of the company, thereby deepening their commitment to the
organizational outcomes. As airlines are highly regulated, and most often unionized,
WestJet uses a unique combination of both intrinsic and extrinsic motivators to
create a culture of high engagement.
WestJet’s Compensation Strategy
Total Rewards
At WestJet and WestJet Encore, we are committed to providing all
WestJetters with a fair and competitive total rewards package which includes
a solid base salary, flexible group benefit coverage, a company‐matched share
purchase plan, performance based incentives, and (of course) flight
privileges.
We strive to build a great environment to work in with initiatives like our
ergonomic work stations and we are never short of reasons to celebrate our
success with a cupcake party. We also know that as much as WestJetters like
their airline jobs, they like to have a life outside of work too. We emphasize a
strong work‐life balance and support employee travel.
Employee share purchase plan (ESPP)
Owners care, and we make a big deal out of caring. Once WestJetters have
passed the three‐month probationary period they are eligible to contribute a
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Module 1: Impact of Rewards on Attraction Retention…
set percentage of their salary toward the employee share purchase plan. The
company generously matches share purchases dollar for dollar.
Profit share and Ownersʹ performance award (OPA)
Twice a year WestJetters get together to share in our collective success for
profit share. As owners of the airline we are all invested in WestJet and
WestJet Encoreʹs continued prosperity—a portion of profits are distributed to
all WestJetters in recognition of their contribution. The Ownerʹs performance
award is also paid out to all WestJetters once a year based on our ability to hit
(or exceed) targets for four key indicators in the business including safety, on‐
time performance, guest experience and cost.
Travel privileges
WestJetters like to travel. Our travel privileges can help you get to cities in
WestJet and WestJet Encoreʹs flight network as well as access to a world of
destinations through our airline partners.
Source: WestJet. (n.d.). Ownership benefits. Retrieved from
http://www.westjet.com/guest/en/jobs/ownership‐benefits.shtml.
Activity 1: Finding Your Why
Introduction
The purpose of this activity to familiarize yourself with the concept of total
compensation and the various components that make up a compensation strategy
and determine why learning about these concepts is important to you.
Creating a Reflective Learning Journal
Create a dedicated learning journal either as a computer file or in a notebook.
The learning journal is a place to keep track of key concepts and ideas, and
take notes on the terminology used in the course. You will find that the
learning activities often ask you to reflect on various concepts in your
learning journal.
Reflecting on your learning as you read will deepen your learning. It also will
set you up to be successful in the final exam. Within this course, there are two
(2) clues to let you know that a concept may appear on your final exam:
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1. Key Terminology
2. Reflective Questions
When you see these headings, be sure to make notes in your reflective journal
to help you prepare for writing the final exam.
Instructions
1. Watch two short videos:
o Kadian‐Baumeyer, K. (n.d.). Understanding employee compensation
[Video file].
o Sinek, S. (2009, September). Simon Sinek: How great leaders inspire action
[Video file].
2. In your learning journal, reflect and make notes on the following questions:
o Think about the golden circle of why, how, and what, and apply this
concept to this course. Define what and how you are going to achieve in
this course. What is your plan? What are your deadlines and weekly
goals? Map it out for yourself.
o What is the reason taking this course is personally important to you?
Define your why; for example, are you working on achieving a degree,
getting a promotion, or beginning a new chapter in your career?
o Choose one word that best summarizes your personal why. Write it on a
sticky note and post it on the outside of your journal or somewhere in
your workspace. Feel free to take a picture of your word and post it in the
Discussion area below (Available in your online course materials) with a
brief description of why you are motivated to learn about Total Rewards.
Activity 2: Exploring Intrinsic and Extrinsic Motivations
Introduction
The purpose of this activity is to apply the concept of intrinsic and extrinsic
motivation.
Instructions
1. Read chapter one (1) in your textbook:
o Long, R. J. (2014). Chapter 1. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
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Module 1: Impact of Rewards on Attraction Retention…
Key Terminology
Reward: Anything provided by the job or the organization that satisfies and
employee need.
Extrinsic rewards: Factors that satisfy basic human needs for survival and
security, as well as social needs and needs for recognition.
Intrinsic rewards: Factors that satisfy higher‐order human needs for self‐esteem,
achievement, growth, and development. (Long, 2014)
2. Test your understanding of intrinsic and extrinsic motivation by taking this short
quiz. This self‐quiz does not count towards your final grade. Click on either
intrinsic or extrinsic motivation next to the example provided.
Activity available in your online course materials.
Activity 3: Prioritizing Extrinsic Rewards
Introduction
The purpose of this activity is to apply the concept of extrinsic motivation and to
explore what kind of rewards you value most.
Instructions
In this activity, imagine that you have been notified by your direct supervisor that you
have done an outstanding job as a sales associate. As the top sales associate in the
company, you are entitled to a reward valued at $5,000.
From the list of options below, establish priorities by ranking the options with numbers
from 1 to 5 (1 = most desirable, 5 = least desirable) for the way you would like to receive
the reward:
_____ Paid as wages with taxes deducted.
_____ Paid as a professional development fund to be used on training and development.
_____ Paid as a tax‐free health spending account to be used on any health, wellness
membership, or fee.
_____ Paid as home office expenses to be used to purchase computer(s), cell phone(s), or
home office furniture.
_____ A combination of the options above.
Activity available in your online course materials.
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Activity 4: Read and Reflect: Intrinsic Motivation
Introduction
The purpose of this activity is to apply the concept of intrinsic motivation and to
explore what kind of rewards you value most. Consider the element of intrinsic
motivation and the considerations that an employer needs to make to ensure that
their total rewards plan includes this highly important concept.
Instructions
1. Read Kenneth Thomas’ article The Four Intrinsic Rewards that Drive Employee
Engagement:
o Thomas, K. (2009, November/December). The four intrinsic rewards that
drive employee engagement. Ivey Business Journal. (Available in your
online course materials)
2. In your learning journal, reflect and make notes on the following questions:
o Consider the four aspects of intrinsic motivation. To what extent do you
feel intrinsically motivated by your current position? If you are not
currently employed, talk to a friend or family member about his or her
level of intrinsic motivation.

Committing to a meaningful purpose

Choosing the best way of fulfilling that purpose

Making sure that one is performing work activities competently

Making sure that one is making progress to achieving the purpose
o Assess your satisfaction in your current role. In what way would you like
to be more intrinsically motivated?
Topic 2: Goals of a Compensation System
The most essential goal of an organization’s compensation system is to support the
achievement of its overall strategic goals. The way that an organization compensates
and rewards employees often creates an incentive to achieve those goals.
In order to attract employees, an organization needs to compensate individuals in
some alignment with the overall value of their work. For example, if accountants
tend to make $60,000 per year in the labour market, the organization will receive
very few applications for the position of account if they only pay $35,000 per year.
And even if the organization is able to secure applicants, they will not continue to
work for the organization in the longer term.
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Module 1: Impact of Rewards on Attraction Retention…
Activity 5: Read and Reflect: Goals of Reward and
Compensation Systems
Introduction
The purpose of this activity is to review the goals of a reward and compensation
system, and define what an organization is trying to achieve when considering the
structure of compensation.
Instructions
1. Read the Long, R. J. (2014). Chapter 1. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education, Text Box: Compensation Notebook 1.1 “Goals of
the Reward and Compensation System”.
1.
Promote achievement of the organizations goals.
2.
Fit with and support the organizations strategy and structure.
3.
Attract and retain qualified individuals.
4.
Promote desired employee behaviour.
5.
Be seen as equitable.
6.
Comply with the law.
7.
Be within the financial means of the organization.
8.
Achieve the above goals in the most cost effective manner. (Long, 2014)
2. In your reflective journal, reflect on the following questions:

Think about an organization that you currently work for or have worked for
in the past. When considering their compensation structure, which of the
goals listed above did they seem to make a high priority?

Do you think they had given thought to the compensation system and its
design?
Activity 6: Terminology Self-Assessment
Introduction
In order to review some of the major concepts from the textbook, take the following
self‐assessment quiz. This ungraded quiz is intended to test your learning and does
not count towards your final mark.
Activity available in your online course materials.
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Module 1 Summary
In this module, we learned the foundation concepts that will be used throughout the
course. Terms like base pay, performance pay, and indirect pay will be reviewed in
depth. In future modules you will gain a detailed understanding of how
compensation is established.
Central to our understanding of effective compensation is intrinsic and extrinsic
motivation. Financial compensation is extrinsic motivation, because it allows the
individual to pay for the necessities of life including food and housing. Intrinsic
motivation is often felt to be a more powerful motivator, because it is linked to our
personal growth and development.
In the next module, we will explore the link between behaviour and compensation.
References
Kadian‐Baumeyer, K. (n.d.). Understanding employee compensation [Video file].
Retrieved from Study.com website: http://study.com/academy/lesson/
understanding‐employee‐compensation.html.
Long, R. J. (2014). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Sinek, S. (2009, September). Simon Sinek: How great leaders inspire action [Video file].
Retrieved from https://www.ted.com/talks/
simon_sinek_how_great_leaders_inspire_action#t‐20933.
Thomas, K. (2009, November/December). The four intrinsic rewards that drive
employee engagement. Ivey Business Journal. Retrieved from
http://iveybusinessjournal.com/publication/the‐four‐intrinsic‐rewards‐that‐
drive‐employee‐engagement/.
WestJet. (n.d.). Ownership benefits. Retrieved from http://www.westjet.com/guest/en/
jobs/ownership‐benefits.shtml.
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Module 2: Strategic Framework for Compensation
Overview
When considering the appropriate compensation structure of an organization, it is
essential to think about the structure, culture, and overall goals of the organization.
Why is this important? Does it really make a difference? Why do we need to look at
total rewards through the lens of organizational strategy?
Considering the structure, culture, and overall goals of the organization is important
for several reasons. First, the individuals we want to hire have expectations that
their pay will be comparable to other similar organizations. Employees may feel that
they are not being treated fairly if their pay structure is significantly different. Thus,
it may either positively or negatively impact the organization’s ability to hire high‐
quality candidates.
Another important reason is that creating a connection between compensation and
organizational goals creates an incentive or focus on the achievement of those
outcomes.
In the first topic of this module, we explore the idea that an organization is a system.
The larger in size and scale, the more complex that system is. A metaphor for the
organization is the spider’s web, with each part of the web essential to the next and
all parts interconnected.
In topic two, we review a number of different managerial strategies, and explore
how organizations position themselves differently in order to be successful.
Topics
1. Organizations as Systems
2. Managerial Strategies
3. Structural and Contextual Variables
Learning Outcomes
When you have completed this module, you should be able to:

Discuss the impact of the environment, business strategy, and workforce on
compensation.

Differentiate between different strategic approaches.
TRU Open Learning
M2-2
Module 2: Strategic Framework for Compensation
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: The Organization as a System
Activity 1: Different Types of Organizations Need Different
Internal Systems
Activity 2: Read and Reflect
Topic 2: Managerial Strategies
Activity 3: Applying Strategic Models
Topic 3: Structural and Contextual Variables
Activity 4: Structural and Contextual Variables
Activity 5: Terminology Self‐Assessment
Resources
You will require your course textbook to complete this module:

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
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Topic 1: The Organization as a System
The image below reflects the many processes, procedures, and resources that make
up an organization. Every organization has a unique web of processes that aims to
achieve organizational outcomes. Organizations establish goals and objectives,
which together comprise the organizational strategy, which in turn drives progress
within the organization.
Altmann, G. (2014). mark‐marker‐hand‐leave‐516277 [Digital Image]. Pixabay. Retrieved from:
https://pixabay.com/en/mark‐marker‐hand‐leave‐516277/
As an organization grows, many aspects of the organizational systems change and
adapt as well. Strategic objectives can include a focus internal to the organization,
looking at its strengths and weaknesses, and also external factors which include
opportunities and threats.
Edward Deming began his career as an engineer, but he is perhaps better
known for his work as a management consultant. Deming was one of the
leaders in pioneering the concept that an organization is a system, and in his
view management was responsible for creating an effective and efficient
system for employees.
The Deming Institute offers this overview of his ideas:
Perhaps Dr. Deming’s greatest contribution and biggest departure
from the past was to view an organization as a system. He defined a
system as a network of interdependent components that work together
to try to accomplish the aim of the system. The aim for any system
should be that everybody gains, not one part of the system at the
expense of any other. In a business context this includes shareholders,
customers, suppliers, employees, the community and the environment.
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Module 2: Strategic Framework for Compensation
Dr. Deming used the analogy of an orchestra to illustrate the concept
of a system, “An orchestra is judged by listeners, not so much by
illustrious players, but by the way they work together. The conductor,
as manager, begets cooperation between the players, as a system,
every player to support the others. There are other aims for an
orchestra, such as joy in work for the players and the conductor (n.d.).
Activity 1: Different Types of Organizations Need Different
Internal Systems
Consider the two unique Canadian companies below. Both have the goal of serving
customers and driving profits, but they do so in very different ways:
CIBC is a Canadian bank which
serves millions of clients. Products
and services are very standardized:
Abe Book Company is an online
book retailer that specializes in rare
and used books:

Founded in 1867


1,200 locations across
Canada
Founded in 1996, and
acquired by Amazon in 2008

One location

44,000 employees

92 employees

Serving over 11 million
clients

Located in Victoria, BC
(AbeBooks, n.d.)

Headquarters located in
Toronto, ON (CIBC, n.d.)
CIBC. (n.d.). CIBC quick facts.
Retrieved from
https://www.cibc.com/ca/inside‐
cibc/quick‐facts.html.
AbeBooks. (n.d.). Company information.
Retrieved from
https://www.abebooks.com/books/Comp
anyInformation/?cm_sp=Ftr‐_‐Home‐_‐
about1.
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When you think of an organization as a system, consider the differences in simple
business procedures that would be required in a large, complex, highly‐regulated
organization like CIBC versus the most basic processes that are likely possible when
your organization operates out of one central facility like AbeBooks.
Both organizations were acknowledged as Top Employers in Canada in 2016. By
reading the highlights of their organizational profiles, one can see the different
compensation strategies used to motivate employees.
Read the following profiles:

Yerema, R., & Leung, K. (2016, February 6). AbeBooks Inc.: Recognized as one
of BC’s top employers (2016). Eluta.ca.

Yerema, R., & Leung, K. (2016, November 6). CIBC: Recognized as one of
BC’s top employers (2017). Eluta.ca.
For AbeBooks, the motivators are more intrinsic, and tied to social and community
factors. For CIBC, financial incentive programs are used to drive performance in key
areas. Both organizations are highly successful, but the strategies they deploy are
vastly different.
Activity 2: Read and Reflect
The purpose of this activity is to explore the connection between an organization’s
structure and the strategy that it develops to achieve organizational success.
1. Read from “Introduction to Effective Compensation Systems” to “Human
Relations Managerial Strategy”
o Long, R. J. (2018). Chapter 2. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your learning journal, reflect and make notes on the following questions:
o When you think of an organization like Apple or Microsoft, what are the
outputs produced by the organization?
o Look at Figure 2.1 in Chapter 2. Then, search online about what scope of
inputs are needed for an organization of that size. What does their
physical organization look like considering their financial resources?
o Which of the managerial strategies do you think are used by the
organization?
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Topic 2: Managerial Strategies
An important consideration when determining the most appropriate managerial
strategy includes consideration of the following organizational attributes:

Environment or Industry

Business Strategy

Technology

Size

Workforce (Long, 2018, p. 39)
By considering these key elements, an organization can further analyze the type of
managerial strategy most likely to be in place. For many organizations, the classical
strategy continues to be fully entrenched, despite yielding a more negative internal
tone.
Activity 3: Applying Strategic Models
The purpose of this activity is to apply the three managerial strategies outlined in
Chapter 2 of the textbook.
Linked below, you will find a matching activity in which you need to connect the
managerial strategy with the example provided. This ungraded activity is intended
to test your learning and does not count towards your final mark.
Activity available in your online course materials.
Topic 3: Structural and Contextual Variables
Activity 4: Structural and Contextual Variables
The purpose of this activity is to consider the different corporate strategy typologies
and how the structure of the organization and the context it works within impacts
the approach to achieving organizational goals.
1. Review Chapter 2 in your textbook from “Corporate Strategy” to
“Summary”:
o Long, R. J. (2018). Chapter 2. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
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Module 2: Strategic Framework for Compensation
2. In your learning journal, reflect and make notes on the following questions:
o Considering the Miles and Snow typology, what is the difference between
a defender and a prospector and an analyzer business strategy?
o Porter’s typology considers the contrast between a low‐cost strategy
versus and differentiator strategy that aims to create a unique product.
Think of examples of both types of strategies; for example, Walmart has a
low cost strategy, and Apple has a differentiator strategy because its
products are so unique. List two or three other examples of each type.
o Woodward’s Typology of Technology considers the size of the units
produced. Compare and contrast the advantages and disadvantages of
small batch and large batch technology.
Activity 5: Terminology Self-Assessment
Take the following self‐assessment quiz to review some of the major concepts from
the textbook. This ungraded quiz is intended to test your learning and does not
count towards your final mark.
Activity available in your online course materials.
Module 2 Summary
This module provided a basic context for understanding reward systems as tied to
an organizational strategy. Each strategy requires a different compensation
approach to meet the organization’s unique needs. This essential alignment was
explained.
A number of models or typologies of how an organization goes about achieving its
goals were reviewed. Always looking to make connections between theories and the
real world, we learned to apply these ideas to real world examples.
References
AbeBooks. (n.d.). Company information. Retrieved from
https://www.abebooks.com/books/CompanyInformation/?cm_sp=Ftr‐_‐Home‐
_‐about1.
CIBC. (n.d.). CIBC quick facts. Retrieved from https://www.cibc.com/ca/inside‐
cibc/quick‐facts.html.
The Deming Institute. (n.d.) Appreciation for a system. Retrieved from
https://deming.org/management‐system/sopk/appreciation‐for‐a‐system.
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Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Yerema, R., & Leung, K. (2016, February 6). AbeBooks Inc.: Recognized as one of
BC’s top employers (2016). Eluta.ca. Retrieved from http://content.eluta.ca/top‐
employer‐abebooks.
Yerema, R., & Leung, K. (2016, November 6). CIBC: Recognized as one of BC’s top
employers (2017). Eluta.ca. Retrieved from http://content.eluta.ca/top‐employer‐
cibc.
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Module 3: Behavioural Framework for
Compensation
Overview
Is this work worth doing? Will I receive fair compensation? Will I be able to
accomplish the task before me?
According to the expectancy theory these are the kinds of questions we ask
ourselves before we commit to performing a task. In this module, we explore the
connection between behavior and motivation as it relates to employee compensation
and total rewards.
In the first two modules, we have learned that the first step in designing an effective
compensation system is to understand the goals and aspirations of the organization.
What this tells us is the type of employee behaviours the organization most wants to
reward. This module explores some of the potential challenges in viewing those
goals too narrowly and forgetting the reasons that individuals get out of bed each
morning and make the journey into work–they have their own needs and goals in
mind.
An effective compensation module is mindful of the duality at play: balancing the
organization’s with the individual’s goals
Topics

Topic 1: Types of Reward Problems
Learning Outcomes
When you have completed this module, you should be able to:

Evaluate the relationship amongst the components of total rewards

Apply Maslow’s hierarchy of needs to the workplace

Describe the theories of motivation
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Module 3: Behavioural Framework for Compensation
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Types of Reward Problems
Activity 1: Read and Reflect
Activity 2: Exploring Employee Needs
Activity 3: Applying Maslow’s Hierarchy
Activity 4: Compare and Contrast Motivation Theories
Activity 5: Terminology Self‐Assessment
Assignment 1: Employee Motivation Essay (15%)
Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Top 10 compensation concerns and solutions. (2009, November 9). Retrieved
from http://hrpeople.monster.com/news/articles/3117‐top‐10‐compensation‐
concerns‐and‐solutions?page=1. (Available in your online course materials)

Maslow’s hierarchy of needs. (n.d.). In Wikipedia. Retrieved from
https://en.wikipedia.org/wiki/Maslowʹs_hierarchy_of_needs. Creative
Commons. (Available in your online course materials)

Sprouts. (2017, January 5). Overview of Maslowʹs hierarchy of needs [Video
file]. Retrieved from https://youtu.be/O‐4ithG_07Q.
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Topic 1: Types of Reward Issues and Problems
Mackenzie Engineering is a small firm, located in downtown Winnipeg. Founded in
1996, the original owner was James Mackenzie, who was a highly respected civil
engineer with a solid reputation within the community. For years the organization
stayed the same size and secured many contracts from government agencies, who
acted as their bread‐and‐butter clients.
After selling the company in 2005, the new owners set their sights on expansion. To
motivate employees, they implemented a bonus system in which engineers earned
up to 30% per year by completing projects earlier than planned and by being at least
5% under budget.
Initially, the bonus system was invigorating, and it gave the engineers a renewed
focus. After three years, however, the organization’s solid reputation began to
diminish as the quality of projects declined. Co‐workers who had always been
willing to work together felt a sense of competition which had never existed before.
The government contracts began to slowly erode, because the high standards the
company was known for diminished.
The compensation model had an unintended consequence. It shifted the focus of the
engineers from high‐quality work and customer service to cost reduction and
bonuses. This is a typical type of reward problem: It produced the behaviour the
new owners wanted, greater profitability and lower costs; however, the unplanned
behaviour change compromised the quality of work.
This concept of unintended consequences is a common issue when implementing
reward strategies.
Another reason why reward systems are sometimes not successful is because they
do not result in the kind of behavioural change an organization wants to see in their
employees. For example, the Saskatchewan Nurses Union negotiated, through
collective bargaining, the ability for nurses to retain (or keep) sick days to be used as
augmented (or flexible) leave at the end of each year. For every four days of sick
leave remaining in an employee’s sick bank, they were permitted to take one flexible
day off in the following year.
While this was intended to be a positive incentive, many nurses felt the incentive
was not “worth it,” and they chose to continue to use their sick leave, which they
perceived as being more valuable. Also, the organizational culture is such that many
nurses did not feel appreciated for their efforts, and they saw the exchange as the
employers’ tactic to “steal their sick leave”. The incentive to reduce sick leave was
ultimately unsuccessful. Therefore, the system was discontinued.
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Module 3: Behavioural Framework for Compensation
These are two examples of reward programs failing to produce the behaviours that
the organization was seeking.
In this module, the concept of issues with rewards system as they relate to employee
behaviours and outcomes will be explored.
Activity 1: Read and Reflect
The purpose of this activity is to review the common types of issues that arise when
designing compensation systems.
1. Read Chapter 3 from “Types of Reward Problems to “Consequences of
Reward Dissatisfaction” in your textbook:
o Long, R. J. (2018). Chapter 3. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. Read the following:
o Top 10 compensation concerns and solutions. (2009, November 9).
(Available in your online course materials)
3. In your learning journal, write your thoughts and reflections in response to
the following questions:
o List the three types of reward problems and one example of a time when
you have experienced this type of problem.
o Think about the concept of perceived inequity and think of a time when
you had a perceived inequity. What was unfair about that situation from
your perspective? What could the employer or boss have done to address
this concern?
o Review Figure 3.4 in your textbook. From this diagram we can see that an
individual can make a decision to increase their rewards (they have
certain options), and to decrease their contribution or their effort. Which
of these two paths do you think that employees more commonly take?
o Do employees always make an actual choice, or does their behaviour
happen without them really noticing or being all that aware of their
options?
Activity 2: Exploring Employees Needs
Introduction
The purpose of this activity is to explore employee needs, and learn how the job or
work that an individual does can assist in satisfying some of those needs. Maslow’s
hierarchy is comprised of five basic needs. In order to achieve the needs at the upper
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end of the diagram, an individual must first achieve the more basic needs found at
the bottom of the diagram.
FireflySixtySeven. (2014). Pyramid showing Maslowʹs hierarchy of needs [Digital Image].
Wikimedia Commons. Retrieved from:
https://commons.wikimedia.org/wiki/File:MaslowsHierarchyOfNeeds.svg.
Creative Commons
Instructions
1. Read Chapter 3 from “Types of Reward Problems” to “Process Theories of
Motivation” in your Strategic Compensation in Canada textbook:
o Long, R. J. (2018). Chapter 3. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. For a more detailed overview of Maslow’s hierarchy, review the following website
and video:
o Maslow’s hierarchy of needs. (n.d.) In Wikipedia. Retrieved from
https://en.wikipedia.org/wiki/Maslowʹs_hierarchy_of_needs. Creative
Commons. (Available in your online course materials)
o Sprouts. (2017, January 5). Overview of Maslow’s hierarchy of needs [Video
file]. Source: https://youtu.be/O‐4ithG_07Q.
3. In your learning journal, write your thoughts and reflections in response to the
following questions:
o What do you think are ways that an individual’s job assists them in meeting
their need for safety and security?
o When you think about the jobs that you have performed, to what extent did
those jobs meet your needs for social or self‐esteem needs?
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Module 3: Behavioural Framework for Compensation
o Has there ever been a time when you felt your esteem was diminished by a job
or a boss? When you think about that example, what happened to your work
performance? Did you disengage or did you try harder at work?
Activity 3: Applying Maslow’s Hierarchy
Introduction
The purpose of this activity is to apply the concepts found in Maslow’s hierarchy to
various employment scenarios and to understand the connection between employee
needs and the role the workplace plays in our lives.
An effective visual can be found in this diagram, which outlines Maslow’s hierarchy
of needs applied to the concept of employee engagement.
Smith, S. (n.d.). How Maslowʹs hierarchy of needs influences employee engagement [Digital
Image]. Scancapture.co.uk. Retrieved from: http://www.scancapture.co.uk/how‐maslows‐
hierarchy‐of‐needs‐influences‐employee‐engagement/.
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Instructions
Based on the following five levels of Maslow’s hierarchy, match the level of need to
the workplace scenario. This ungraded activity does not count towards your final
grade.
1. Self Actualization
2. Esteem
3. Love/Belonging
4. Security
5. Physiological
This activity is available in your online course materials.
Activity 4: Compare and Contrast Motivation Theories
Introduction
The purpose of this activity is to review the different motivation theories and to
learn more about how individuals are motivated in the workplace.
Instructions
1. Read Chapter 3 from “Process Theories of Motivation” to “Summary” in your
Strategic Compensation in Canada textbook:
o Long, R. J. (2018). Chapter 3. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your learning journal, write your thoughts and reflections in response to
the following questions:
o After reviewing the concepts of reinforcement theory, expectancy theory,
attribution theory, economic theory, and money, which theory do you
relate to most?
o When you review each of the motivational theories, which of them
provides us insights into structuring total rewards?
Activity 5: Terminology Self-Assessment
Introduction
In order to review some of the major concepts from the textbook, take the following
self‐assessment quiz. This ungraded quiz is intended to test your learning and does
not count towards your final mark.
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Module 3: Behavioural Framework for Compensation
Instructions
Enter the missing word in the following definitions.
This activity is available in your online course materials.
Module 3 Summary
In this module we learned about the importance of employee needs and how
employees seek to meet many of their needs through their work and within their
workplace.
The module outlined common issues and problems associated with compensation
and reward systems, and the need to be mindful of the potential for unintended
consequences when we design compensation systems.
Finally, the module outlined several theories of motivation to provide insights into
how individual employees are motivated within the workplace.
References
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Maslow’s hierarchy of needs. (n.d.) In Wikipedia. Retrieved July 09, 2016, from
https://en.wikipedia.org/wiki/Maslowʹs_hierarchy_of_needs.
Smith, S. (2014, April 17). How Maslow’s hierarchy of needs influences employee
engagement [Blog post]. HRZone. Retrieved from
http://www.hrzone.com/community/blogs/steve‐smith‐0/how‐maslows‐
hierarchy‐of‐needs‐influences‐employee‐engagement.
Sprouts. (2017, January 5). Overview of Maslow’s hierarchy of needs [Video file].
Retrieved from https://youtu.be/mic33KEudlo.
Top 10 compensation concerns and solutions. (2009, November 9). Retrieved from
http://hrpeople.monster.com/news/articles/3117‐top‐10‐compensation‐
concerns‐and‐solutions?page=1.
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Module 4: Components of Compensation Strategy
Overview
This module explores the components of compensation. How do salaries and wages
get established? What makes some types of positions, like professional positions and
management positions, salary based; while other positions, like bank tellers and
construction workers, hourly?
In Topic 1, the two main types of pay are described:
1. base wages
2. performance pay
There are several different ways to define and differentiate them.
When you think about compensation structures, it’s normal to want to keep it
simple—one compensation structure per organization. But in fact, that is rarely the
reality. One of the complexities about managing employee compensation and benefit
systems is that sometimes there are several different types of compensation
structures within an organization.
An example of this can be found in a restaurant. Think of all of the different types of
employees working for a busy restaurant. There are typically dishwashers,
hostesses, servers, cooks (sometimes with varying specializations), managers, and
bartenders. Below is an example of the differing types of compensation structures
that may exist within a casual dining restaurant that takes into consideration these
various positions.
JOEY Restaurants. (n.d.). Logo [Image]. Retrieved from http://joeyrestaurants.com/.
Joey Restaurants is known for high‐quality casual dining and has 14 locations
in North America, 10 of which are located in Canada.
Watch this short video about what it is like to work as a Chef at Joey
Restaurants:
JOEY Restaurants. (2016, March 15). JOEY Restaurants—UNLEASH YOUR
POTENTIAL [Video file]. Source: https://youtu.be/uKX0KBnLtRw
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Module 4: Components of Compensation Strategy
As an excellent employer, Joey Restaurants wants to attract and retain high
quality employees in a broad range of categories. The chart below is a
sampling of the types of compensation structures that may exist in a large
restaurant chain like Joey Restaurants (please note, these salaries are made up
by the author and do not reflect actual pay by JOEY):
Position
Base Pay
Performance Pay
Benefits
Dishwasher
$9.14/hour
Server
$10.00/hour
Gratuities
Basic medical
Head Chef
Monthly
salary
Bonus for Sales
Levels Met
Basic medical, extended health
plan, dental coverage
Regional
Manager
Monthly
salary
Bonus for Sales
Levels Met
Basic medical, extended health
plan, dental coverage
Basic medical
Topics

Topic 1: Base and Performance Pay

Topic 2: Benefits
Learning Outcomes
When you have completed this module, you should be able to:

Describe the components of compensation strategy.

Explain why the compensation plan is appropriate for the organization.

Describe the employee benefits and explain how the company meets
employee and organizational needs.
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Assessment and Activity Checklist
Here is a checklist of learning activities you will benefit from completing in this
module. You may find it useful for planning your work.
✓
Activities
Topic 1: Base and Performance Pay
Activity 1: Read, Watch a Video, and Reflect
Activity 2: Exploring Salary Levels Using eTools
Activity 3: Read and Reflect: Market Pricing and Job
Evaluation
Activity 4: Read and Reflect: Performance Pay
Topic 2: Benefits
Activity 5: Read and Reflect: Indirect Pay
Activity 6: Terminology Self‐Assessment
Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Heaps, W. (2010, July 29). Ten steps for building a salary structure [Blog
post]. Retrieved from https://internationalhrforum.com/2010/07/29/ten‐steps‐
for‐building‐a‐salary‐structure/. (Available in your online course materials)

Johns Hopkins University. (n.d.). Glossary of key compensation terms [PDF
document]. Retrieved from https://hrnt.jhu.edu/working_here/
documents/Glossary_Comp_Terms.pdf.

HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation &
benefits. Retrieved from http://hrcouncil.ca/hr‐toolkit/compensation‐
employee.cfm. (Available in your online course materials)

Benefits Canada website at http://www.benefitscanada.com/.
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Module 4: Components of Compensation Strategy
Note that you will be asked to search TRU Library’s databases to find some of
the articles. For information on how to access these resources, refer to the
Course Guide.
Topic 1: Base Pay and Performance Pay
To determine how an organization will compensate employees is often a reflection
of what they value most. For some, the goal is low labour costs and the approach is
to pay the minimum in wages to produce the product or service; for example,
Walmart would have such a strategy. Other organizations are highly competitive
and want to attract and retain the highest possible calibre of employee; they are
prepared to pay a competitive salary as an incentive to attract high‐quality
employees, for example Harvard University.
Base pay is the most common compensation method used by employers. It
compensates the employees for the time that they work, either very specifically in
the case of an hourly worker, or a bit more generally in the case of a salaried
employee. When an employee earns his or her base pay on an hourly basis, it is
called a wage. When earnings are calculated on a monthly basis, it is called a salary.
Base pay is relatively easier to administer than other forms of compensation, which
is one of the reasons that 90% of the workforce is paid in this manner.
Toronto Blue Jays. (n.d.). Toronto Blue Jays logo [Image].
Retrieved from http://toronto.bluejays.mlb.com/
How Much Should the Toronto Blue Jays Pay to Sign Edwin Encarnación
as a Free Agent?
At age 33, Edwin Encarnación is the Toronto Blue Jays’ big slugger. With his
base pay set at 10 million dollars per year in 2016 and his free agent status
looming, the Jays need to figure out what he is worth and act quickly. Boston
Red Sox have their eyes on Encarnación to replace David Ortiz, who retires
this year. However, Edwin is fond of saying that he would prefer to call
Toronto home, as he has deep ties to Canada.
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It is interesting that baseball players, and most other types of professional athletes,
have a base pay model for the regular season. This means that the team’s success
is not directly tied to their compensation. Performance pay comes in the post‐
season, for example in the World Series, when winners share a pool of money.
Trade rumors suggest that Encarnación may make over 100 million dollars as his
base pay over a 4 year period. At the half way point in the season, with 80 runs
batted in so far in the 2016 season, he might just be worth it.
Performance pay is used more strategically in many organizations, often in the
form of an incentive for high‐quality work. Performance pay has the advantage of
creating a connection between the employee’s behaviour or work performance,
and his or her compensation. It is thought by some that performance pay is
motivating for employees, although there are competing views on that.
Activity 1: Read, Watch a Video, and Reflect
Introduction
The purpose of this activity is to understand the basic concepts of base pay and
performance pay.
Instructions
1. In the course textbook, read Chapter 4 from the “Introduction to Compensation
Mix Choices” to “Disadvantages of Indirect Pay”:
o Long, R. J. (2018). Chapter 4. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. Watch the short video:
o Components of Total Rewards. (Available in your online course materials)
3. In your learning journal, reflect on the following questions:
o Make notes of the definitions of base pay, performance pay, and indirect pay
(or benefits). These are important terms, which you should fully understand.
o Why do most employers use base pay as a method of payment?
o What are some of the advantages of performance based pay? What portion
of an employee’s pay is typically based on a performance pay method?
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Module 4: Components of Compensation Strategy
Activity 2: Exploring Salary Levels Using eTools
Introduction
The purpose of this activity is to familiarize yourself with eTools that allow you to
research market value salary levels.
Instructions
1. Read the article:
o Heaps, W. (2010, July 29). Ten steps for building a salary structure [Blog
post].
2. Choose a job or position that interests you. Using each of the following
websites, research the salary level for the position:
o Glassdoor
o PayScale
o Monster “Salary Wizard Canada”
3. In your learning journal, record the salary range you identify at each site.
Consider the following questions:
o Were the salary ranges similar or different?
o When you look at the salaries listed, is it referring to base pay or
performance pay?
o Based on your research, consider the organizational goals and strategies
when establishing a pay range for the position.
Note: We will use these eTools in future modules, so make note of any logins
and passwords you create for these sites.
Thompson Rivers University is not responsible for the content or privacy
policies of third‐party websites. Please read the terms of use of third‐party
websites carefully. If you need help accessing a site, please contact the
publisher directly.
These sites may be hosted in the US; therefore, your personal data used to
create an ID or profile on the sites could be accessed by the US government
under US law. If you have privacy concerns with providing personal
information, please only use these websites to the extent possible as a guest
without having to sign up.
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Activity 3: Read and Reflect: Market Pricing and Job Evaluation
Introduction
The purpose of this activity is to familiarize yourself with the concepts of
establishing a base wage through market values versus job evaluation.
Instructions
1. Read Chapter 4 in the textbook from “Base Pay Methods: Market Pricing” to
“Disadvantages of Job Evaluation”:
o Long, R. J. (2018). Chapter 4. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your learning journal, reflect on the following questions:
o What is a job evaluation process, and how is it different from researching
the salary levels as you have done above?
o What are some of the advantages to a job evaluation system?
o Why do you think most organizations base salaries on a “market pricing”
method?
Activity 4: Read and Reflect: Performance Pay
Introduction
The purpose of this activity is to understand the basic the concepts of performance
pay.
Instructions
1. Read Chapter 5 in the textbook from “Introduction to Performance Pay
Choices” to “Employee Stock Plans”:
o Long, R. J. (2018). Chapter 5. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education
2. In your reflective learning journal, respond to the following questions:
o What is the difference between goal and gain sharing programs?
o How do piece rate, commissions, and merit pay intend to motivate an
individual?
o Why do employee stock plans and profit sharing plans make employees
more invested in an organization?
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Module 4: Components of Compensation Strategy
Topic 2: Benefits
Indirect pay is often viewed by the employer as a means to attract and retain
employees. Benefits are typically comprised of offerings that are intended to support
the individual’s health and well‐being through extended health and dental
programs, various forms of insurance, monthly medical premiums, and other forms
of perks like gym memberships.
As organizations cater to the demographic makeup of their workforce, benefit
offerings might differ based on the industry. For example, technology companies
like Google are known for offering special benefits like recreation offerings, free
meals, and refreshments in addition to the more traditional benefit packages.
Employee benefit administration is where many HR professionals begin their
career. Benefits administration is part of the more technical aspect of the
profession and can be detail oriented and complex.
The International Foundation of Employee Benefits Plans provides a wide
range of course offerings related to benefits administration, which lead to a
professional designation.
The CEBS Program offers you the opportunity to earn designations in three
distinct areas of specialization: group benefits, retirement and compensation.
The Group Benefits Associate (GBA), Retirement Plans Associate (RPA) and
the Compensation Management Specialist (CMS) form the core of the CEBS
curriculum.
For more information, see:

International Foundation of Employee Benefit Plans. (n.d.).
Designations. Retrieved from
https://www.ifebp.org/CEBSDesignation/overview/
designations/Pages/default.aspx.
Activity 5: Read and Reflect: Indirect Pay
The purpose of this activity is to orient you to the concept of indirect pay, which is
commonly referred to as employee benefits. This component of compensation is
becoming increasingly important and, depending on the industry, it can take various
forms.
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1. Read the rest of Chapter 4 in the textbook starting from “Indirect Pay” to “
Base Pay Methods: Market Pricing:
o Long, R. J. (2018). Chapter 4. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. Review the Benefits Canada website. Scan the various sections of the website
and check out the categories of information about employee benefits.
3. Read the article:
o HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation
& benefits (Available in your online course materials)
4. In your reflective journal, consider the following prompts and questions:
o Make note of the various types of employee benefits found in the HR
Council article.
o What is the reason employers offer indirect pay and benefits to
employees?
o When you look at the benefit options, which kinds of employee benefits
are you most interested in?
Activity 6: Terminology Self-Assessment
Take the following ungraded self‐assessment quiz. This quiz is intended to test your
learning and does not count towards your final mark.
This activity is available in your online course materials.
Module 4 Summary
This module provided an important description of base pay and performance pay
systems. A basic overview of how base pay is established has been provided,
including the distinction between wages and salaries.
The various options for performance pay were outlined, including merit pay,
commissions, incentives, gain, and goal sharing programs.
We also reviewed indirect pay structures which include employee benefits and other
forms of perks.
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Module 4: Components of Compensation Strategy
References
Heaps, W. (2010, July 29). Ten steps for building a salary structure [Blog post].
Retrieved from https://internationalhrforum.com/2010/07/29/ten‐steps‐for‐
building‐a‐salary‐structure/.
HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation & benefits.
Retrieved from http://hrcouncil.ca/hr‐toolkit/compensation‐employee.cfm.
International Foundation of Employee Benefit Plans. (n.d.). Designations. Retrieved
from https://www.ifebp.org/CEBSDesignation/overview/designations/Pages/
default.aspx.
JOEY Restaurants. (n.d.). Logo [Image]. Retrieved from http://joeyrestaurants.com/.
JOEY Restaurants. (2016, March 15). JOEY restaurants—UNLEASH YOUR
POTENTIAL [Video file]. Retrieved from https://youtu.be/uKX0KBnLtRw.
Johns Hopkins University. (n.d.). Glossary of key compensation terms [PDF document].
Retrieved from https://hrnt.jhu.edu/working_here/documents/
Glossary_Comp_Terms.pdf.
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Toronto Blue Jays. (n.d.). Toronto Blue Jays logo [Image]. Retrieved from
http://toronto.bluejays.mlb.com/.
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Module 5: Formulating Rewards and
Compensation Strategies
Overview
In the first four modules, we learned about the basic pieces of the total compensation
puzzle. In this module we will review the fourth component for consideration and
then begin the process of formulating a rewards and compensation strategy.
Image 5.1: Formulating Rewards Strategy
SNSF. (2015). Sinergia: 42 new grants for 2015 [Digital Image]. Swiss National Science
Foundation. Retrieved from: http://www.snf.ch/en/researchinFocus/newsroom/Pages/news‐
150730‐sinergia‐new‐grants‐2015.aspx.
We have discovered the importance of understanding the organization and the
environment within which it exists (see Image 5.1, puzzle piece 1). This is sometimes
called “the industry” or “the context” that the organization operates within.
Consider the different compensation alternatives for an accounting firm in
downtown Toronto versus a small coffee shop operating in Swift Current,
Saskatchewan. Both organizations might employ ten individuals, but their industries
(financial field or hospitality) and their locations have a significant impact on their
compensation strategy.
We then considered the workforce and how organizations need to consider the
behaviour and needs of employees. In doing this we considered what motivates
employees, and how compensation can be used to attract new employees and retain
existing employees (see Image 5.1, puzzle piece 2).
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Module 5: Formulating Rewards and Compensation Strategies
In the previous module, we gained a basic understanding of compensation options
(see Image 5.1, puzzle piece 3). We reviewed the concepts of base pay, performance
pay, and indirect pay/benefits. We explored many of the advantages and
disadvantages of these pay systems.
Finally, an organization needs to consider—and many would say it is the initial
aspect they contemplate—the constraints they face (see Image 5.1, puzzle piece 4).
Up until this point, we have been considering compensation from a structure
standpoint, answering the questions:

Why do we choose compensation options?

How do we build a strategy that motivates employees?
In this module, we consider the organization’s constraints. The most fundamental
constraint being the financial limitations of the organization: i.e., what can it afford?
As creative as many organizations are in defining themselves in a unique manner,
how employees are paid is legislated. In other words, there are laws which govern
how employees are paid. These can’t be bypassed or ignored. Human rights
legislation ensures that employees are treated fairly and equally by employers, and
this includes the way they are paid. And finally, as anyone who works in the area of
human resources or finance will tell you, no employer can get around dealing with
tax legislation.
Formulating the Compensation Strategy
After having considered all of the key components, we are now ready to formulate
the compensation strategy.
The first two steps involve deciding what you want the compensation to achieve.
For example:

Do you want to reduce the number of employees retiring or resigning?

Considering the impact of individual performance, are you trying to increase
sales levels or produce a product with zero defects.
These objectives relate to the kind of behaviour the organization requires in order to
be successful.
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Image 5.2: Cycle for Formulating a Compensation Strategy
© Thompson Rivers University, 2016
Once you know what you are hoping to achieve, you consider the mix and level of
compensation (Step 2 in Image 5.2). Always paying attention to the total cost of your
overall plan, you make decisions about base pay, performance pay, and indirect pay,
and the financial investment in each type and level.
Step 3: Finally, an assessment of the strategy needs to occur:

Did you achieve the outcomes that you were hoping for?

Did the plan stay within the budget allocated?

Are there unexpected consequences that now need to be addressed?
These are the main steps in the process of defining a compensation system.
Topics

Topic 1: Constraints on Strategy

Topic 2: Formulating and Evaluating Compensation

Topic 3: Special Employee Groups
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Module 5: Formulating Rewards and Compensation Strategies
Learning Outcomes
When you have completed this module, you should be able to:

Formulate a reward and compensation strategy.

Describe the different options and rationale for compensating special groups.
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from in completing this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Constraints on Strategy
Activity 1: Read and Reflect
Activity 2: Exploring the Employment Standards
Legislation
Activity 3: Is There Really Pay Equity?
Topic 2: Formulating and Evaluating Compensation
Activity 4: Read and Reflect
Activity 5: Let’s Practice—Case Study
Topic 3: Special Employee Groups
Activity 6: Read and Reflect
Assignment 2: Plastco Packaging (15%)
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Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Parrish, S. (2014, September 23). Giving your employees skin in the game
[Blog post]. Retrieved from http://www.forbes.com/sites/steveparrish/
2014/09/23/giving‐your‐employees‐skin‐in‐the‐game/#30c49d027d54.

Government of Alberta, Ministry of Labour. (n.d.). Employment standards.
Retrieved from https://work.alberta.ca/employment‐standards.html.

Ontario Ministry of Labour. (n.d.). Employment standards. Retrieved from
https://www.labour.gov.on.ca/english/es/.
Topic 1 Constraints on Strategy
The final phase in the planning and preparation phase is to consider the constraints
on compensation strategy. By constraints we mean considerations which may impact
the implementation of the compensation strategy. The most common constraint for
most organizations are fiscal constraints. Because the cost of labour typically takes
up 60–85% of an organization’s overall budget, even small changes in labour costs
can have significant impacts.
Beyond a Wage Freeze: Teachers to Take 10‐per‐cent Wage Rollback
One of the main constraints faced by organizations is the reality of fiscal
constraint. The reality extends not only to organizations but also to
government agencies. In this excerpt taken from the Edmonton Journal,
teachers, whose wages are paid by the provincial government, are dealing
with the realities of challenging economic conditions:
The call for a reduction in government sector salaries came from the
Canadian Taxpayers Federation, which said substantial rollbacks are
essential at a time when the NDP government is projecting a $10.4‐
billion deficit during the next fiscal year.
Teachers are the first group up for contract negotiations, since their
latest four‐year deal is set to expire this summer.
“Alberta’s compensation for government sector employees is bloated
compared with the national average and teachers are no exception,” said
Paige MacPherson, the Alberta director of the taxpayers federation.
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Module 5: Formulating Rewards and Compensation Strategies
“It would just be remarkably out of touch to think that we could look at a
wage increase when we go into these negotiations, and we don’t feel a
wage freeze goes far enough, either.”
She said a 10‐per‐cent cut in salaries would still keep Alberta teachers
among the best paid in Canada, and shouldn’t cause any major
disruptions to classrooms. She said there is no strong correlation between
how much teachers are paid and how well students perform.
Teghtmeyer said teachers are aware of the province’s financial issues and
those will play a role at the bargaining table. However, he noted the four‐
year contract that is just ending included three years of pay freezes,
followed by a two‐per‐cent hike this year.
While Alberta teachers tend to make more than their counterparts in
other parts of the country, that is true of most professions in the province,
he said. Alberta also has a higher cost of living than other jurisdictions, he
added. (Gerein, 2016)
Another central constraint to consider is legislated constraints. For example the laws
that govern all Canadian companies and employers need to be both considered and
implemented with consistency and care. For many organizations, the employment
standards legislation, which is established at the provincial level, lays out the basic
minimum standards that Canadian organizations need to meet in order to fairly pay
employees.
As labour costs lay the foundation of overall costs for the organization, they also impact
the pricing of products and services an organization must charge in order to establish a
profit margin. The pricing of products and services also relates to the demand and
supply, so it can become a very sensitive balance.
Activity 1: Read and Reflect
The purpose of this activity is to provide an overview of the main constraints on
compensation strategy.
1. Read Chapter 6 from “Introduction to Compensation Strategy” to “Determining
the Compensation Level” in your textbook:
o Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
2. Read the following article:
o Parrish, S. (2014, September 23). Giving your employees skin in the game [Blog
post].
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3. In your reflective learning journal, respond to the following questions:
o How does the level of compensation impact the organization’s ability to
recruit and retain employees?
o Think of an organization that you have worked for or are familiar with. Based
on the outline provided in the textbook, what are the key constraints that your
organization faces?
o How does human rights legislation protect the rights of Canadians?
Activity 2: Exploring the Employment Standards Legislation
Introduction
The purpose of this activity is to explore employment standards legislation in different
provinces.
Employment standards legislation establishes the minimum levels of a whole host of
working conditions required in Canada, including the minimum wage. This image shows
the minimum wage levels, which are established at the provincial level. As of May 1,
2016, the minimum wage varied from a low of $10.45 to a high of $13.00 per hour.
Instructions
1. Using the links provided below, review employment standards in Alberta
and Ontario:
o Government of Alberta, Ministry of Labour. (n.d.). Employment
standards.
o Ontario Ministry of Labour. (n.d.). Employment standards.
If you live in a Province or Territory other than Alberta and Ontario, also
research the answers to these questions for your jurisdiction.
2. In your learning journal, reflect and make notes on the following questions:
o What is the maximum number of hours an employee can work before she
or he is paid overtime?
o How many days or weeks of vacation time are employees required to be
offered? Is the vacation with or without pay?
o What can an individual do if their employer does not meet these
minimum standards?
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Module 5: Formulating Rewards and Compensation Strategies
Activity 3: Is There Really Pay Equity?
Introduction
The purpose of this activity is to consider the establishment of pay equity legislation,
and consider if it has achieved its goal of creating equality in Canada.
Instructions
1. Search online for the terms “pay equity in Canada”.
2. Based on your research, do you think there is pay equity in Canada?
3. In the discussion area, post your thoughts and reflections on this topic, and
read what other students have posted.
Topic 2 Formulating and Evaluating Compensation
This topic will provide an overview of the process of formulating and evaluating
different compensation strategies. As is outlined in the examples provided below,
two organizations working in the retail sector have dramatically different
organizational strategies. Both strategies are successful, and in neither scenario
could you simply exchange the compensation approach and produce the same
results. Whether you like the approach or not, the compensation strategy is an
integrated part of the overall organization’s strategy.
Walmart prides itself on
offering customers the lowest
everyday pricing on a wide
variety of products.
They control costs in part by
managing closely the amount
and cost of labour.
One of the strategies they
deploy is increasing the number
of part‐time workers (those
Hold Renfrew’s brand is about
exclusive luxury, from the piano
player in the foyer to the personal
shoppers available at reasonable
hourly prices.
The employee selected to work at
Holt Renfrew is expected to
uphold this ideal image.
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working 29 hours per week or
less), because positions in that
job category do not have
employee benefits associated
with their position.
This allows the retail giant to
avoid paying health insurance
premiums (via Obamacare)
within the United States.
Will this impact their ability to
recruit new employees? Perhaps
in the longer run, but the
benefits seem to be outweighing
the costs at the present time.
Image source: Walmart. (n.d.). Logo
[Image]. Retrieved from
http://www.walmart.ca.
With costs playing a less central
role in the strategy, the hourly
rate of pay is noticeably higher.
They offer health benefits and
financial incentives for sales
associates who exceed targets.
Their compensation strategy is
intended to motivate
performance.
Does this strategy lead to
increased sales over the long
term? Does it pay to create in
employees the expectation that
their performance will be
rewarded?
Image source: Holt Renfrew.
(n.d.).Logo [Image]. Retrieved from
www.holtrenfew.com.
Activity 4: Read and Reflect
1. Read Chapter 6 from “Formulating the Compensation Strategy” to “Who
Develops the Compensation Strategy” in your textbook:
o Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
2. In your reflective learning journal, answer the following questions:
o Describe the key considerations when determining the compensation
level.
o What are the “three basic screens” when considering a compensation
strategy?
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Module 5: Formulating Rewards and Compensation Strategies
Activity 5: Let’s Practice—Case Study
Introduction
The purpose of this activity is to apply the basic concepts outlined in this module to
a real‐world example.
Instructions
Using the five step compensation strategy formulation process, formulate a
compensation strategy for production workers in the “Multi Products Corporation”
case in the Appendix of your textbook.
Hint: Use the Compensation Strategy Template provided in Chapter 6 as an overall
guide for your work.
In this activity, work through each of the five steps and make notes in your reflective
learning journal.
Topic 3 Special Employee Groups
Within every organization there are special employee groups that require a unique
compensation structure. Often positions of this nature are highly specialized and
unique, or they are unlike all of the other kinds of positions in the organization.
A common example of this are sales positions. Consider for example individuals
who work in very specialized health care companies. Most of the employees in the
organization work in research and development related positions. Their background
is commonly in the medical field.
The sales force responsible for marketing and selling the medications or devices the
company produces have a skill set unlike anyone else in the company. If they are
highly effective, their talents are essential to the organization’s success. For this
reason, their compensation has a performance based pay or incentive system that
differs from everyone else in the company. If the organization did not offer such
incentives, they would not be able to retain highly talented sales persons.
Another group that often has a very unique compensation structure are senior
managers or executives. Like highly‐trained and capable sales persons, high quality
executives are very difficult to recruit. Their scope of responsibility is the highest
within the organization and tremendous trust is imparted upon them. For this
reason, their remuneration package is unique (and often lucrative).
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Activity 6: Read and Reflect
1. Read Chapter 6 from “Compensation Strategy for Special Employee Groups”
to “Making the Decision” in your textbook:
o Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
2. Read the following article:
o Watson, S. (2015). Profit‐sharing options: Pros and cons. (Available in
your online course materials)
3. In your reflective learning journal, answer the following questions:
o What are some of the common features of executive compensation? Do
you think it is reasonable that executives tend to earn significantly more
than other employee groups?
o What is an expatriate, and how are they different than other workers in
Canada?
o In 2020, it is estimated that contingent workers, meaning temporary part‐
time workers, will make up a significant portion of the workforce. What
are the advantages of a contingent workforce for the organization?
Module 5 Summary
In this module, we have reviewed the many considerations an organization must
work through when it is establishing or revising its compensation strategy. The
constraints placed on the organization include financial constraints, legal constraints,
and labour market constraints. We then worked through the process by identifying
the required behaviour and the role of compensation, which leads us to defining the
compensation mix. Within this mix we determine the base pay, performance pay,
and indirect pay we will allocate for each type of position knowing that there may be
a different mix for differing types of positions within the organization.
In the next module, we will explore how we evaluate jobs in order to determine the
specific salary range for a position.
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Module 5: Formulating Rewards and Compensation Strategies
References
Gerein, K. (2016, March 4). Taxpayers federation calls for Alberta teachers to take 10‐
per‐cent wage rollback. Edmonton Journal. Retrieved from
http://edmontonjournal.com/news/politics/taxpayers‐federation‐calls‐for‐
alberta‐teachers‐to‐take‐10‐per‐cent‐wage‐rollback.
Government of Alberta, Ministry of Labour. (n.d.). Employment standards. Retrieved
from https://work.alberta.ca/employment‐standards.html.
Government of Ontario, Ministry of Labour. (n.d.). Employment standards. Retrieved
from https://www.labour.gov.on.ca/english/es/.
Holt Renfrew. (n.d.). Logo [Image]. Retrieved from www.holtrenfew.com.
Long, R. J. (2016). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Parrish, S. (2014, September 23). Giving your employees skin in the game [Blog post].
Retrieved from http://www.forbes.com/sites/steveparrish/2014/09/23/giving‐
your‐employees‐skin‐in‐the‐game/#30c49d027d54.
Retail Council of Canada. (n.d.). Minimum wage by province [Infographic].
Retrieved from http://www.retailcouncil.org/quickfacts/minimum‐wage.
Walmart. (n.d.). Logo [Image]. Retrieved from http://www.walmart.ca/.
Watson, S. (2015). Profit‐sharing options: Pros and cons. Retrieved from
http://edwardlowe.org/profit‐sharing‐options‐pros‐and‐cons/.
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Module 6 Job Evaluation
Overview
Halifax Public Libraries have 14 branches, which provide a broad range of library
services to the community. With over one million resources available to the public,
the library has a large staff employed to manage its collection. Each staff member
plays an important role in the overall organizational success.
Lefkowitz, L. (2004). Young man sitting cross‐legged on library floor, reading, rear view [Photograph].
Retrieved from http://www.gettyimages.ca/detail/photo/young‐man‐sitting‐cross‐legged‐on‐
library‐high‐res‐stock‐photography/200410208‐001.
For example, the library employees include:

Librarians

Library Assistants

Clerical Workers

Computer Technicians

Maintenance Staff

Managers
How does the library determine how to pay the employees in a manner that is
consistent with the labour market value of the job, and at the same time establish a
value within the organization that is reflective of the complexity and skills required
to perform each job? How is internal fairness established?
One common method is to have a job evaluation system in place. A job evaluation
system creates a value for the different aspects of the work being done. Halifax
Public Libraries could establish a job evaluation points system to determine the
various levels of pay within the organization.
In this module, we will review the concept of job analysis and learn about the
essential role of the job description. We will review the different types of methods
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used to fairly evaluate jobs, in particular the use of a point method which evaluates
on the basis of defined compensable factors.
Topics

Topic 1: Job Analysis

Topic 2: Methods of Job Evaluation
Learning Outcomes
When you have completed this module you should be able to:

Analyze the content and base pay structure of jobs.

Define the basic elements of a job description.

Differentiate between the five methods of evaluating jobs.

Conduct a job evaluation.
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from in completing this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Job Analysis
Activity 1: Read and Reflect: Job Analysis and Descriptions
Activity 2: Compare and Contrast Job Descriptions
Topic 2: Methods of Job Evaluation
Activity 3: Read and Reflect: Job Evaluation Methods
Activity 4: Applied Activity: Job Evaluation Video
Assessment
Activity 5: Read and Reflect: Pay Equity
Activity 6: Terminology Self‐Assessment
Quiz (15%)
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Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Job Evaluation Video

Graff‐McRae, R. (2016, March 15). Why should Alberta implement pay equity
legislation? Because it’s 2016 [Blog post]. Retrieved from
http://behindthenumbers.ca/2016/03/15/why‐should‐alberta‐implement‐pay‐
equity‐legislation‐because‐its‐2016/. CC BY 3.0 (Available in your online
course materials)
Topic 1 Job Analysis
Job analysis is intended to gather important information about the specific work
being done by an individual or a group of individuals. The information collected in
the job analysis process is used to write the job description.
There are many ways to attain the information during the job analysis process. The
most common methods include questionnaires and interviews whereby important
information is attained from the individual or individuals performing the job tasks.
Sample: Job Analysis Questionnaire
JOB TITLE
Summary Statement
Describe briefly the overall purpose of your job. In answering this question,
consider:
1.
Why does the job exist? What is your job responsible for? What is
its major goal?
2.
Major duties and responsibilities?
3.
Education qualifications and skills?
4.
Degree of mental effort required?
5.
Degree of physical effort required?
6.
Working conditions?
7.
Type of supervision received?
8.
Type of supervision and/or assistance given?
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Module 6: Job Evaluation
Essential Job Descriptions
Job descriptions are the essential foundation on which other human resources best
practices are built. They are important because they establish fair and equitable
compensation, performance management programs that impact organizational
outcomes, and they assist in defining the requirements for selection and recruitment.
When organizations are strategically targeting their investment in training and
development, they will focus that effort on duties deemed essential to organizational
success.
Job descriptions play a very practical and useful role for both employees and their
managers. They are the starting point for defining the responsibilities for the
position. They should outline the key duties required in a clear manner which can be
understood by employees, and define the standard of performance expected. When
clear job descriptions do not exist, many other aspects of the human resources
structure will be impacted.
Figure 6.1: Job Descriptions Centre Many HR Processes
Areas of Use of Job Descriptions
Well‐crafted job descriptions are the foundation for a number of organizational
processes other than job evaluation, and anchor decision making in these processes.
They are of use in the following areas: recruitment and selection, determining
compensation, training and development, and performance management.
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Activity 1: Read and Reflect: Job Analysis and Descriptions
The purpose of this activity to provide an overview of the concept of job analysis
and to define the importance of well‐defined job descriptions.
1. Read Chapter 7 from “Introduction to Effective Job Evaluation” to “Pitfalls of
Job Analysis”:
o Long, R. J. (2018). Chapter 7. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your reflective learning journal, respond to the following questions:
o What questions would you ask to learn about the major tasks done by an
employee? Interview a friend or family member about his or her job.
What are the difficult tasks? What level of education is required for the
position?
o When looking at the sample job description in your textbook, look at the
way that the description lists the major duties and responsibilities. Do you
think this would be useful for recruiting a new employee, or managing
her or his performance?
o Why do you think it is important to detail the working conditions and
physical effort required for the position?
Activity 2: Compare and Contrast Job Descriptions
The purpose of this activity is to explore different types of job descriptions in order
to understand the importance of the elements that comprise the document.
Review the two sample job descriptions below. Both are for the position of
Administrative Assistant.
Example 1: Administrative Assistant at Red Deer College
Job Description
Administrative Assistant, Children’s Programs
Department/Division: Child Care Centre
CUPE Classification: Level D
Reports to: Manager, Children’s Services
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Purpose of Job:
This position provides administrative support and reception for the
Children’s Programs, including answering calls, data entry and document
creation, and operating office equipment. Ability to work independently and
effective communication, interpersonal and public relations skills are
important.
Detailed Job Responsibilities:
A. Reception Duties 45%
o Respond to inquiries made in‐person, by phone, or by mail, and make
appropriate referrals both within and outside of the Child Care Centre.
o Communicate with clients, children, staff, and the general public on a
daily basis regarding program information, registration, billing, etc.
B. Filing 20%
o File all correspondence for Family Day Home and the Child Care Centre.
o Set up and maintain a comprehensive filing system, including archival
and storage inventories for the Department in accordance with Red Deer
College records management system.
o Updating information in the files as needed.
C. Children’s Program Administrative Support 30%
o Create the monthly attendance sheets for the Centre.
o Create a monthly Child Care Centre newsletter and Family Day Home
newsletter.
o Create and update forms for the Centre, Family Day Home, and
Kindergarten.
o Create and maintain spreadsheet of employee certifications and expiry
dates.
o Create and maintain spreadsheets as needed for tracking Child Care
Centre related information.
o Create agenda documents & take minutes at staff meetings,
administration meetings, kindergarten meetings, and family day home
meetings.
o Ensure information on the program’s website is updated and maintained
in consultation with the manager.
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D. Child Caregiving 5%
o Provide relief child care when numbers require e.g. before a new shift
arrives.
o Provide brief relief child care when caregivers need to use the washroom
or speak with a parent.
Qualifications
Education:
o High school diploma or equivalent to about 12 years of schooling
o Certificate required: 50 hour Child Care Orientation – Child Care
Assistant certificate
Preferred:
o Completion of a one (1) year college certificate, one year University or
equivalent
Experience and Additional Competencies:
o Minimum 6 months related experience
o Proficient in computer programs including Microsoft Office Programs
(particularly Word, Excel, Outlook and Publisher)
o Knowledge of office equipment, e.g. photocopier, fax machine
o Excellent clerical skills and demonstrated written and oral
communication skills
o Excellent interpersonal skills, communication skills, public relations skills
and telephone manner
o Previous experience in providing service to the public in an office setting
o Strong attention to detail
o Knowledge of a child care setting
Red Deer College. (2014, January). Job description: Administrative assistant – children’s
programs [PDF document].
Retrieved from http://rdc.ab.ca/sites/default/files/uploads/documents/48164/
administrative‐assistant‐childrens‐program‐level‐d‐january‐2014.pdf
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Example 2: Administrative Assistant at Trinity Western University
Job Description
Administrative Assistant
Position Summary
Acting as administrative assistant for the University Librarian in many of the
daily operational functions and procedures related to ensuring efficient
operation of the library.
Duties and Responsibilities
1. Responsible for completing all normal administrative functions for the
Library including word processing and written communication such as mail,
email and other correspondence of the University Librarian. Maintains the
librarian’s and the library’s general files and provides office management
services for the library overall.
2. Responsible for processing interlibrary loans, including paper and electronic
record updates, contacting patrons, renewals, and returns. Also handles the
paperwork and mailing of requested loans to other libraries.
3. Responsible for co‐ordinating Serials collection functions including orders,
check‐in, routing, claims, records, binding, microforms, etc., and also ensures
the maintenance of the physical condition of the Periodicals collection.
4. Responsible for co‐ordinating and maintaining electronic and printed library
records and files pertaining to debit card sales, petty cash, purchase orders,
policy & procedures manual, personnel forms, interlibrary loans, library
subscriptions, etc. Makes bank deposits including money received for fees &
fines, debit card sales, interlibrary loans, photocopier, library cards, and
other miscellaneous.
5. Responsible for ordering and maintaining an inventory of resources and
supplies as required. Prepares accompanying business documents and
forms, codes and approves corresponding invoices.
6. Responsible for acting as a team member of the Library assisting with relief
at the circulation counter during the week as required (including three
Saturdays a semester) and responsible to become completely familiar with
all the circulation functions of the Symphony automated system.
Supervision
Given: None formally; student assistants informally
Received: University Librarian
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Job Standards/Requirements
Education: 2 years post‐secondary secretarial and/or office/library training
required.
Experience: 2–3 years in a library or office required
Equipment: PC, printer, typewriter, calculator, telephone, fax machine,
photocopier
Skills: Demonstrated skill in the use and management of MS Office, OCLC,
Horizon, and other software products with a minimum of 60 WPM keyboard
speed. Superior interpersonal skills with a wide variety of staff, faculty,
students and off campus contacts.
Abilities: Superior office management, organizational and prioritizing
abilities. Ability to maintain a calm, pleasant attitude under time schedule,
budget and personnel pressures. Superior ability in the knowledge and use of
automated library systems including Serials and Periodicals.
Trinity Western University. (n.d.). Administrative Assitant. Retrieved from
https://www.twu.ca/library/ppm/ppm4.11.31.htm.
In your reflective learning journal, respond to the following questions:
1. From the descriptions provided, do you get a good idea of what the main
duties of the jobs entail?
2. Note the difference in educational requirements. Do you think the level of
education required is reasonable for each position?
3. Review the amount of work experience required for the position, and note
the differences. As you can see, one employer puts a greater emphasis on
work experience, while the other values education. Is either right or wrong?
4. Neither of the job descriptions clearly define the physical requirements or the
working conditions. Can you see why this would be important information to
include?
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Topic 2: Methods of Job Evaluation
Left to pure market assessments, the establishment of salaries would simply
perpetuate any unfairness. This is because when we look at the broad labour market
ranges, they are typically established through supply and demand. If you were to
look beyond the average at how the range of salaries are comprised, a pattern would
quickly emerge. Certain groups of our population tend to be paid less for doing the
same job; in particular women and minority groups tend to earn less for performing
the same duties.
Job evaluation plans are designed to create a higher degree of overall fairness by
establishing a system for valuing the work for various positions based on the
attributes of the work. This process is intended to take the bias that might otherwise
exist out of the process.
Job evaluation plans are built on the basis of compensable factors, with the most
common method being a point factor system which assigns point values to each
area. Examples of compensable factors include:

Education

Initiative

Working
conditions

Work experience

Physical effort

Analytical
abilities
Rather than focusing on the traits of the worker or employee, the job evaluation
system focuses on the attributes of the job itself. Job evaluation systems are often
referred to as “gender neutral” because they are intended to take the bias out of the
process for establishing base pay.
Activity 3: Read and Reflect: Job Evaluation Methods
The purpose of this activity is to provide an overview of the concept of job
evaluation, including a review of the different types of methods.
1. Read Chapter 7 from “Job Evaluation Methods” to “Updating Job
Evaluations” and Chapter 8 from “Using the point method to design a job
evaluation system” to “Possible Pitfalls of the Point Method of Job
Evaluation”:
o Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
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2. In your reflective learning journal, respond to the following questions:
o What is a compensable factor?
o How do an organization’s values show up when looking at their job
evaluation system?
o In what ways do job evaluation systems try to establish fair pay for
employees?
o What are some of the disadvantages to the job evaluation process?
Activity 4: Job Evaluation Video Assessment
The purpose of this activity is to apply the concept of job evaluation to a sample
position. Your goal is to establish the rate of pay of this position using the job
evaluation tool provided.
1. Review the attached job description for xyz position.
2. Watch the short video whereby the individual describes his/her position:
3. Review the Job Evaluation Tool, which is based on five sample compensable
factors. The job evaluation tool is comprised of two documents:
o The rating tool, in which criteria is defined in each section
o The Summary Point Chart, in which points are assigned to each level
4. Complete the evaluation of the job by clicking on the appropriate level.
5. As you select a level, the corresponding point value will appear.
6. Multiply .15 cents per point to determine the hourly rate of pay.
Job Evaluation Rating Tool
Education
Level One
Completion of Grade 12
Level Two
Six Months of Post‐Secondary Education
Level Three
Two Years of Post‐Secondary Education or Diploma
Level Four
Four Years of Post‐Secondary Education or Bachelor
Degree
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Module 6: Job Evaluation
Work Experience
Level One
Six months of related work experience
Level Two
One year of related work experience
Level Three
Three years of related work experience
Level Four
Five years of related work experience
Initiative
Level One
Standardized duties that require general rules and
guidelines to be followed, procedures are documented for
most job tasks
Level Two
Standardized duties that require some problem solving
activities, procedures are documented for some job tasks
Level Three
Differentiated duties require problem solving on an
occasional basis (1–2 times per week), unusual or difficult
problems are referred to a supervisor
Level Four
Differentiated duties require problem solving on a daily
basis (5 days per week), position is limited only by broad
organizational policy.
Physical Effort
Level One
Light duties, minimal physical effort is required.
Level Two
Lifting over 5 kg, walking, kneeling, and bending required
on most days
Level Three
Lifting over 10 kg walking, kneeling, and bending is
required on all working days
Level Four
Lifting over 15 kg walking on uneven surfaces, kneeling
and bending, crawling is required on all working days
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Supervisory Skills
Level One
No supervisory experience required
Level Two
Required to train and direct temporary or replacement
workers
Level Three
Provide direct supervision to between1–3 employees
Level Four
Provide direct supervision to between 4–10 employees
Summary Point Rating Chart
1
2
3
4
Education
10
20
45
70
Experience
10
20
40
60
Initiative
10
20
30
40
Physical Effort
10
20
30
40
Supervisory Responsibility
0
10
40
60
Activity 5: Read and Reflect: Pay Equity
The purpose of this activity is to provide an overview of the concept of job
evaluation, including a review of the different types of methods.
1. Read Chapter 7 in your textbook from “Conforming to Pay Equity
Requirements” to “Communication about Pay Equity Plan Changes”:
o Long, R. J. (2018). Chapter 7. In, Strategic compensation in Canada (5th ed.).
Toronto, ON: Nelson Education.
2. Read:
o Graff‐McRae, R. (2016, March 15). Why should Alberta implement pay
equity legislation? Because it’s 2016 [Blog post]. (Available in your online
course materials)
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Module 6: Job Evaluation
3. In your reflective learning journal, respond to the following questions:
o How do job evaluation systems create a fair way to evaluate positions,
regardless of gender? Are systems necessarily gender neutral?
o What are pay equity systems intending to improve or correct?
o In Rebecca Graff‐McRae’s article on the pay analysis in Alberta, women’s
pay lags significantly behind the compensation paid to men. What do you
think causes this vast difference?
o Do you think pay equity systems are fair to everyone?
Activity 6: Terminology Self-Assessment
Match the following terms to their correct definition.
Activity available in your online course materials.
Module 6 Summary
In this module you learned how to use job evaluation methods. Specifically, you
learned how points based job evaluation methods are designed by defining
compensable factors. Using the job description, and through interviewing the
individual employee, the level associated with that specific factor is assigned. The
wage level is established by working through this process. This leads to jobs that are
paid based on a consistent and fair method, which is less subjective. Also it ensures
that gender does not play a role in compensation systems.
In the next module, we will establish wages based on a salary survey which involves
researching similar positions within the broad labour market.
References
Barnetson, B. (2015, November 3). Pay equity legislation in Alberta? [Blog post].
Retrieved from http://albertalabour.blogspot.ca/2015/11/pay‐equity‐legislation‐
in‐alberta.html.
Graff‐McRae, R. (2016, March 15). Why should Alberta implement pay equity
legislation? Because it’s 2016 [Blog post]. Retrieved from
http://behindthenumbers.ca/2016/03/15/why‐should‐alberta‐implement‐pay‐
equity‐legislation‐because‐its‐2016/.
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Lefkowitz, L. (2004). Young man sitting cross‐legged on library floor, reading, rear
view [Photograph]. Retrieved from http://www.gettyimages.ca/detail/photo/
young‐man‐sitting‐cross‐legged‐on‐library‐high‐res‐stock‐
photography/200410208‐001.
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Red Deer College. (2014, January). Job description: Administrative assistant –
children’s programs [PDF document]. Retrieved from
http://rdc.ab.ca/sites/default/files/uploads/documents/48164/administrative‐
assistant‐childrens‐program‐level‐d‐january‐2014.pdf.
Trinity Western University. (n.d.). Administrative assistant. Retrieved from
https://www.twu.ca/library/ppm/ppm4.11.31.htm.
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Module 7: Evaluating the Labour Market
Overview
Introduction
Module 7 provides information essential for human resources professionals,
entrepreneurs, or accountants who take on compensation‐related duties for their
organization. We have learned why organizations select different compensation
methods in previous modules. In this module we will learn about how to establish
the pay systems:

How salaries relate the labour market

How to establish the salary ranges

How to perform a salary survey for a position
As a friendly heads‐up, you will use math in this module. It is important that you
understand these calculations and the terminology. For aspiring HR professionals
looking to achieve the CHRP designation, this terminology will be tested as part of
the professional designation exams. For those who simply want to work in the field,
these concepts will become part of the everyday vocabulary used when discussing
compensation.
The Ever Changing Labour Market
It is interesting to consider the labour market, and what comprises it, in the face of
such rapid, exponential change. The methods and concepts we base compensation
decisions on today may not be relevant in the workforce of tomorrow.
Demographics are changing the workforce. By 2020 nearly half of those individuals
employed will have been born after 1980. For years, the baby boomer generation
dominated the North American and global societies, and they dominated the labour
market. In a few short years that reality will be a thing of the past, and a younger
workforce with different values will essentially take over and undoubtedly change
it.
The other aspect which has and will continue to radically change the workforce is
the impact of technology on all aspects of society, including the labour market. The
reality is, many jobs that exist today will be performed by artificial intelligence (AI)
or technology in the next 5‐10 years. For example, servers at McDonalds will likely
be replaced by AI, who are programmed to read emotion, and anticipate the
customer’s wants and needs more accurately than a human. Cab drivers, bus drivers
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Module 7: Evaluating the Labour Market
and truck drivers will be replaced by driverless vehicles, and the roads will likely be
safer as a result.
In this module, we are going to work through the process of establishing salary
levels, which is based on the labour market trends. As we do this, keep in mind that
the labour market itself is constantly shifting. Demographic trends are changing,
technology is automating positions that have existed for decades and are being
replaced by new jobs that 10 years ago nobody could have imagined. Compensation
for both new and old work is going to shift over time as well.
Topics

Topic 1: Labour Markets

Topic 2: Establishing Compensation Levels and Compensation Surveys
Learning Outcomes
When you have completed this module, you should be able to:

Evaluate the labour market and the individual with regard to compensation

Research the supply and demand for labour in a specific industry
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from in completing this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Labour Markets
Activity 1: Read and Reflect: Labour Markets
Activity 2: Research: Labour Market
Topic 2: Establishing Compensation Levels and Compensation Surveys
Activity 3: Read and Reflect: Compensation Data and
Surveys
Activity 4: Applied Activity: Researching Salary Ranges
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Activities
Activity 5: Read and Reflect: Establishing Salary Ranges
Activity 6: Applied Activity: Establishing Salary Ranges
Activity 7: Reviewing a Sample Compensation Report
Activity 8: Terminology Self‐Assessment
Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

CrashCourse. (2016, March 27). Labor markets and minimum wage: Crash
course economics #28 [Video file]. Retrieved from
https://youtu.be/mWwXmH‐n5Bo.

HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation &
benefits. Retrieved from http://www.hrcouncil.ca/hr‐toolkit/compensation‐
salary.cfm.

PayScale. (n.d). Salary data & career research center (Canada). Retrieved from
http://www.payscale.com/research/CA/Country=Canada/Salary.

Glassdoor. (n.d.). Salaries. Retrieved from
https://www.glassdoor.ca/Salaries/index.htm.

CPA Canada. 2015 CPA profession compensation study report [PDF
document]. Retrieved from the Chartered Professional Accountants of British
Columbia (CPABC) website: https://www.bccpa.ca/CpaBc/media/CPABC/
Careers/Salary Survey/CPA‐Canada‐2015‐Member‐Compensation‐
Report.pdf.
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Module 7: Evaluating the Labour Market
Topic 1: Labour Markets
In this topic, the concept of the labour market is examined. What is the labour market, and
how does it relate to the compensation of employees?
The labour market is simply the supply of available workers in relation to
available jobs.
Simply stated, the labour market is a balance between the supply and demand for labour.
When the demand for a particular type of job is high and the supply is very low, the
wages offered to attract and retain qualified workers tend to rise. Conversely, when the
demand for a position is low, and there is an abundance of workers applying for
positions, employers don’t need to pay as much for that talent.
The chart below demonstrates how the supply and demand for labour is structured. Keep
in mind that a position and its supply and demand do not remain static. The demand for
IT specialists, for example, has changed significantly. One year networking specialists are
in high demand, and two years later wireless networks radically change the demand for
that kind of a position.
Demand for Labour
Supply of Labour
How will job openings be filled?
How many jobs will there be?

New jobs

Transitional vacancies

Replacement jobs: Retirements,
resignations

Individuals looking for work:
Demographics

New immigrants

Education/Training
The labour market is significantly impacted by external factors, which include economic,
technological, demographic, cultural, competition, and political influences. Just as any
organization is impacted by these external factors, the labour market is constantly
adapting and responding to changes, which no lone organization can control.
Activity 1: Read and Reflect: Labour Markets
The purpose of this activity is to introduce the basic concepts and terminology related to
the labour market.
1. Read Chapter 9 from “Introduction to what is appropriate compensation” to
“Sources of Compensation Data” in your textbook:
o Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
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2. Watch the following short video, which describes the labour market:
o CrashCourse. (2016, March 27). Labor markets and minimum wage: Crash course
economics #28 (10:37) [Video file]. Source: https://youtu.be/mWwXmH‐n5Bo
3. In your learning journal, reflect and make notes on the following questions:
o What factors contribute to the demand for labour?
o What factors contribute to the supply for labour?
o How does the economy impact the labour market?
Activity 2: Research: Labour Market
The purpose of this activity is to become familiar with the concept of the primary labour
market comprised of organizations which are similar in size and structure and which
serve as useful market comparators.
In this activity, you will define the labour market for an organization that you are already
familiar with.
Using the internet, identify organizations that are similar in size and structure to an
organization you have some experience with. They may operate in the same industry or
geographic area. One practical way of identifying the primary labour market is to look at
where employees you have hired worked previously. Also, when employees resign to
work for another organization, where do they tend to go? Those organizations tend to be
within the same labour market for talent as the selected organization.
Identify four or five organizations within the primary labour market of the organization
you selected.
Topic 2: Establishing Compensation Levels and
Compensation Surveys
In this topic, the specifics about how compensation levels are researched and established
will be reviewed.
The first step is to gather information or data about the salary levels. This can happen in a
couple of different ways, and depending on the classifications of employees the approach
may differ within the organization for those employee groups.
If a job evaluation system exists within the organization, this comprises a source of data
for the employees in that job category. If there is no job evaluation system, an organization
needs to either conduct salary surveys themselves or hire an external organization to
provide this salary survey data.
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Module 7: Evaluating the Labour Market
When salary surveys are completed, the organization will need to identify key positions
that they would like to research. These positions are sometimes referred to as benchmark
positions. From there, a number of compensation survey questions are typically designed
to determine if the competing organizations have positions which are similar in nature to
the benchmark positions being researched.
For example, consider an electrician who is currently working for Sam’s Electrical
Services, a small privately‐owned organization which has three electricians, one
accountant, and one part‐time administrative assistant. Sam Mahon, the owner has
decided to conduct a salary review, as two of his employees have resigned in the past
year to work for a competitor who offers a higher salary. Sam’s Electrical Services is
currently paying $25/hour.
Sam’s accountant conducts research using PayScale. On July 28, 2016, the following
results are identified:
Figure 7.1: Electrician Salary (Canada)
PayScale. (2016, July 28). Electrician salary (Canada) [Infographic]. Retrieved from
www.payscale.com.
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As Figure 7.1 demonstrates, the average salary for an electrician in Canada was
$28.00/hour in July of 2016.
This rate of pay would likely climb if there was a significant skill shortage of
electricians, and employers would spend months recruiting and training employees.
The demand for labour would rise in that scenario, and the supply for labour would
be lower and the salary offered to employees would likely rise.
Employers will pay a variety of different salaries, anywhere from $16/hour to
$40/hour, depending on the unique attributes of the work and the compensation
strategy of the organization (which we have learned about in the previous modules).
Sam has to make a decision:

Does he increase his wages to better align with the labour market averages?

Does he introduce a merit pay or performance pay system to focus on his
company goals?
This example provides a very common example of the use of compensation surveys
and data to resolve organizational issues. The opportunity to look at the overall
compensation structure occurs on a somewhat infrequent basis. It is more common
to look at compensation issues and then periodically review the overall
compensation structure.
Activity 3: Read and Reflect: Compensation Data and Surveys
The purpose of this activity is to understand the process of acquiring accurate salary data.
1. Read the following:
o Chapter 9 from “Sources of Compensation Data” to “Limitations of
Compensation Surveys” in your textbook:

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
o HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation &
benefits. (Note: You have already read this article in Module 4. It is beneficial
to review it in the context of this module.) (Available in your online course
materials)
2. In your learning journal, reflect and make notes in response to the following
questions:
o What are the basic steps in the salary survey process?
o What is the difference between a simple average and a weighted average?
o What does the term median refer to?
o Is the term median different from the average?
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Module 7: Evaluating the Labour Market
Activity 4: Applied Activity: Researching Salary Levels
The purpose of this activity is to practice conducting salary research in order to
acquire salary data.
Research salary levels for a position with the organizations you identified in
Module 7, Activity 2 by working through the following steps:
1. Clearly define the position you would like to assess.
2. Write the salary survey questions using the questions found in your textbook
under “Typical Compensation Survey Questions” as a guide.
3. As an alternative to contacting the organizations you identified in Module 7,
Activity 2, use one of the following websites to generate salary survey data
(note, you will need to register on these sites in order to obtain salary
information):
o PayScale. (n.d). Salary data & career research center (Canada).
o Glassdoor. (n.d.). Salaries.
Based on your research, what is the median salary for the position you chose?
Activity 5: Read and Reflect: Establishing Salary Ranges
The purpose of this activity is to review the basic concepts related to establishing
pay grades and pay ranges. If a points‐based job evaluation system is used, then the
salary range is associated with the point values. If a labour market survey of
benchmarked positions is used, the base page range is based on the appropriate
target percentiles selected by the organization.
1. Read Chapter 8 from “Establishing Pay Grades” to “Other Possible Elements
of Base Pay Structure” and Chapter 9 from “Analyzing and Interpreting
Survey Data“ to “Applying Survey Data” in your textbook:
o Long, R. J. (2014). Strategic compensation in Canada (5th ed.). Toronto, ON:
Nelson Education.
2. In your reflective learning journal, reflect on the following questions:
o What are the four main questions an employer needs to ask him or herself
before establishing pay ranges?
o What is the range spread?
o When designing a salary range, do the different ranges overlap?
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o When defining a salary range, what does the term percentiles mean, and
why is it important to understand the percentile the salary range relates
to?
o When discussing indirect pay or benefits, how are the costs represented?
Activity 6: Applied Activity: Establishing Salary Ranges
The purpose of this activity is to apply what we have learned about establishing
salary ranges.
Using the position and organizations that you identified in Module 7, Activity 2 and
Activity 4, establish a salary range using the 25th percentile as the low wage, the mid‐
point or median as the second step in the salary range, and the 75th percentile as the
high wage. Answer the following in your learning journal:

What are your thoughts about this salary range? Is it reasonable or too broad?
Do you think you could recruit someone for the value at the lower range?

When you reflect on the organizational goals, what is your recommended
compensation strategy?
Activity 7: Reviewing a Sample Compensation Report
The purpose of this activity is to share some examples of what professionally
prepared compensation reports look like. You will see many of the concepts and
terminology used in this module displayed in the report.
1. Review the compensation report below:
o CPA Canada. 2015 CPA profession compensation study report [PDF
document].
2. In your reflective learning journal, reflect on the following questions:
o Do you see aspects of the process we have learned regarding a
compensation strategy in this high level report?
o Does the terminology being used sound similar to the terms and concepts
used in this course?
o Why do you think documents like this are made public? Would a private
company publish their compensation strategy?
Activity 8: Terminology Self-Assessment
In order to review some of the major concepts from the textbook, take the following
self‐assessment quiz. This ungraded quiz is intended to test your learning and does
not count towards your final mark.
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Module 7: Evaluating the Labour Market
Match the following terms to their correct definition.
Activity available in your online course materials.
Module 7 Summary
In this module, you learned how to establish compensation levels based on researching
similar positions within the labour market. Through this process we reviewed
terminology that relates to the establishment of salary levels: mean, median, mid‐point,
range spread, broad banding, and percentiles. These terms are important concepts which
are commonly used when dealing with compensation systems, so it is important to
become familiar both with their meaning and how to calculate these amounts.
In the next module, we will explore evaluating individual performance by using a
performance appraisal method. This is an important component of performance based
pay methods.
References
CPA Canada. 2015 CPA profession compensation study report [PDF document]. Retrieved
from the Chartered Professional Accountants of British Columbia (CPABC) website:
https://www.bccpa.ca/CpaBc/media/CPABC/Careers/Salary%20Survey/CPA‐
Canada‐2015‐Member‐Compensation‐Report.pdf.
CrashCourse. (2016, March 27). Labor markets and minimum wage: Crash course economics #28
(10:37) [Video file]. Retrieved from https://youtu.be/mWwXmH‐n5Bo.
Glassdoor. (n.d.). Salaries. Retrieved from https://www.glassdoor.ca/Salaries/index.htm.
HR Council for the Nonprofit Sector (HR Council). (n.d.). Compensation & benefits.
Retrieved from http://www.hrcouncil.ca/hr‐toolkit/compensation‐salary.cfm. (Note:
You have already read this article in Module 4. It is beneficial to review it in the
context of this module.)
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
PayScale. (n.d). Salary data & career research center (Canada). Retrieved from
http://www.payscale.com/research/CA/Country=Canada/Salary.
PayScale. (2016, July 28). Electrician salary (Canada) [Infographic]. Retrieved from
www.payscale.com
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Module 8: Evaluating Individuals
Overview
In this module, the process of formally evaluating employee performance will be
reviewed. In todayʹs workplace, there is a tremendous focus on employee
performance. Part of the reason for this focus can be attributed to the significant
pressures on organizations to become more effective and efficient, and do more with
less in order to remain competitive.
That said, managing employee performance is often seen as being very challenging–
a seemingly good idea that is difficult to execute. When someone mentions
performance management or reviews, employees and managers alike often cringe.
The Performance Reviews are Part of an Ongoing Process
Performance appraisals should represent a summary of an ongoing, year‐round
dialogue. An effective performance management process allows managers to
evaluate and measure individual performance by aligning individual employeeʹs
day‐to‐day actions with strategic business objectives.
Other important reasons to engage in a formal performance review include
clarifying performance expectations, documenting individual performance to
support compensation decisions and supporting professional growth.
Many of the practices that support performance also positively impact job
satisfaction, employee retention and loyalty.
Consequences of a Poorly Structured Process
What is the impact of a poorly structured performance management process? If an
employees’ goals are not aligned with organizational strategy, the overall success is
impacted. If top performers see no recognition for their efforts, nor any
consequences for underperformers, morale can suffer.
Management “buy‐in” is equally important to the performance management
process. If management does not value the process, it can lead to incomplete
appraisals, avoidance of performance discussions, and a lack of honest performance‐
related discussions. Often managers may feel unprepared to deliver quality feedback
and oversee effective performance discussions.
Employees want to feel successful, to do well at their job and feel they are making a
valuable contribution. In order to ensure this happens, employees need a clear
understanding of individual goals and how they fit into the larger organization.
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Module 8: Evaluating Individuals
Topics
Module 8 includes the following topic:

Topic 1: Performance Appraisals and Performance Management
Learning Outcomes
When you have completed this module you should be able to:

Evaluate the relationship of strategic and behavioural theories with
compensation design.

Describe options to connect job performance and compensation.

Assess the impact of compensation based on job performance.
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Performance Appraisals and Performance Management
Activity 1: Read and Reflect: Performance Appraisals
Activity 2: Exploring Performance Appraisal
Methods and Instruments
Activity 3: Applied Activity: Conduct a Performance
Appraisal
Activity 4: Compare and Contrast: Issues Linking
Performance Appraisals to Pay
Reminder: You are responsible for ensuring that Thompson Rivers
University, Open Learning receives your final exam application by the
deadline. For detailed information about how to schedule this exam within
the application deadlines, go to
http://www.tru.ca/distance/services/exams.html#schedule.
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Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

DiDonato, T. (2014, January 14). Stop basing pay on performance reviews
[Blog post]. Retrieved from https://hbr.org/2014/01/stop‐basing‐pay‐on‐
performance‐reviews. (Available in your online course materials)

Miller, S. (2011, September 14). Study: Pay for performance pays off.
Retrieved from https://www.shrm.org/hrdisciplines/compensation/
articles/pages/paysoff.aspx.

Pink, D. (2009). The puzzle of motivation [Video file]. Retrieved from
http://www.ted.com/talks/dan_pink_on_motivation?language=en.
Topic 1: Performance Appraisals and Performance
Management
Managers and supervisors deal with issues related to employee performance on a
daily basis. They provide coaching and feedback, and work with individuals who
are struggling with various aspects of their on‐the‐job performance. This kind of
daily oversight is a key aspect of managing performance.
The performance management process reviewed in this module is the formal goal
setting, feedback, and coaching discussion process, which happens on an annual or
semi‐annual basis. Many organizations tie the performance review process to their
compensation plan, like a merit or performance‐based process. It is this combination
of the performance review tied to performance‐based pay that will be the focus of
this module.
When thinking about performance reviews, the most traditional model of
manager/employee reviews comes to mind. In many organizations, peer and
subordinate appraisals comprise a portion of the evaluation. Also, customer input
and feedback can contribute to the overall performance review process. Reviews that
combine these feedback sources, including the boss, peer, and direct report feedback
are called 360 degree feedback because they gain the perspective of the work
performance from many different perspectives.
The overall goal of this kind of system is to continually improve employee
performance and achieve (and focus on) organizational goals.
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Module 8: Evaluating Individuals
Activity 1: Read and Reflect: Performance Appraisals
The purpose of this activity is to introduce the basic concepts related to performance
appraisals and performance management.
1. Read Chapter 10 from “Introduction to Performance Appraisal and
Performance Management” to “Methods and Instruments for Appraisal”:
o Long, R. J. (2018). Chapter 10. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your learning journal, reflect and make notes on the following questions:
o Performance appraisals require a great deal of organizational time and
effort. What benefits do organizations derive from the process?
o What are some of the pitfalls associated with the performance appraisal
process?
o What do the terms recency effect, contrast effect, and similarity effect
mean?
Activity 2: Exploring Performance Appraisal Methods and
Instruments
The purpose of this activity is to familiarize you with the types of performance
appraisal instruments.
1. Read Chapter 10 from “Methods and Instruments for Appraisal” to “Sources
of Appraisals”:
o Long, R. J. (2018). Chapter 10. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. Search online to research different performance review templates. Look for
various models of the graphic rating scale and behavioural observation scale.
3. In your reflective learning journal, respond to the following questions:
o What are the benefits of the graphic rating scale method?
o If you were a manager holding a performance review meeting, which
type of scale would you prefer to use?
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Activity 3: Applied Activity: Conduct a Performance Appraisal
The following activity is intended to allow you to practice delivering performance
feedback by working through a performance appraisal conversation.
Envision that you will role play the part of Charles Chablis, Manager of Prime Wine
Outlet. You need to conduct a yearly performance appraisal with your employee,
Cheryl. You will need to allocate a bonus of an additional 2%, because Cheryl has
exceeded her sales target.
Here is your scenario:
Cheryl has been working as a sales associate at the Prime Wine Outlet for
over six years. She is friendly and outgoing, and over her many years with
the organization she has taken a proactive approach to learning about wine,
grape varieties, and wine pairings. She is not a professional sommelier, but
she knows enough to provide high quality advice to customers.
Cheryl contributes interesting stories for the store’s blog and updates the
website from her home on a regular basis.
Cheryl exceeded her sales target by 20%, while other similar employees were
only able to meet the targets set.
Over the years, several other employees have been hired, but within a few
months they typically resign. The manager, Charles Chablis, has noticed that
Cheryl tends to give other employees directions. Her direct communications
style makes the other employees feel bullied.
Charles has decided to implement an incentive pay structure, whereby sales
associates can earn a bonus based on achieving sales targets twice per year.
He has decided to implement a performance review process as a part of the
new pay system.
1. Complete the graphic rating scale example found in Chapter 10 of the
textbook. With a friend or family member, work through and role play the
process of delivering Cheryl’s performance feedback.
2. After completing your role play, note your responses to the following
questions in your reflective learning journal:
o What was it like to deliver performance feedback? Was it easier or harder
than you thought?
o How did Cheryl respond to the feedback?
o Did you award her the performance based bonus?
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M8-6
Module 8: Evaluating Individuals
Activity 4: Compare and Contrast: Issues Linking Performance
Appraisals to Pay
The purpose of this activity is to compare and contrast competing viewpoints on the
value of performance appraisal systems.
1. Read the following articles:
o DiDonato, T. (2014, January 14). Stop basing pay on performance reviews
[Blog post]. (Available in your online course materials)
o Miller, S. (2011, September 14). Study: Pay for performance pays off.
(Available in your online course materials)
2. Watch the following video:
o Pink, D. (2009). The puzzle of motivation [Video file].
Source: http://www.ted.com/talks/dan_pink_on_motivation?language=en
3. In your reflective learning journal, reflect on the following questions:

Do you think that merit pay or performance‐based pay will motivate
employees to achieve organizational goals?

To what extent does financial reward motivate you to achieve more?

Do you agree with Daniel Pink’s ideas about mastery and flexibility/freedom
versus financial reward?
Module 8 Summary
In this module, we reviewed the performance appraisal process, including how such
systems can link to a compensation system. Before embarking on a performance pay
system, in particular one which links to performance reviews, the organization
needs to reflect on what it values.
When pay for performance systems are in place, the manager needs to ensure that
their assessments are based on factual information and be mindful of bias in rating
the employee.
In the next module, we will pull together all of the major concepts and develop the
compensation strategy.
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HRMN 4831: Total Rewards
M8-7
References
DiDonato, T. (2014, January 14). Stop basing pay on performance reviews [Blog post].
Retrieved from https://hbr.org/2014/01/stop‐basing‐pay‐on‐performance‐
reviews.
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Miller, S. (2011, September 14). Study: Pay for performance pays off. Retrieved from
https://www.shrm.org/hrdisciplines/compensation/articles/pages/paysoff.aspx.
Pink, D. (2009). The puzzle of motivation [Video file]. Retrieved from
http://www.ted.com/talks/dan_pink_on_motivation?language=en.
TRU Open Learning
HRMN 4831: Total Rewards
M9-1
Module 9: Designing Performance Pay and
Indirect Pay Plans
Overview
In this module, the three main types of performance pay plans are explored,
including gain sharing, goal sharing and profit sharing. For some organizations, this
aspect of the compensation strategy can have an impact on the organizational
culture. To build commitment and pride in employees, organizations have found it
valuable to have employees “invested” in its success. Profit share and employee
stock purchase plans are the most common forms of compensation strategy used by
Canadian companies.
An example of a progressive total rewards strategy is highlighted below. Telus
offers a very diverse and comprehensive total rewards package to employees. As
one of the best employers in Canada, Telus offers a competitive base pay, plus
performance pay offering, an employee share purchase plan, and a flexible benefits
plan.
The following is a summary of total rewards, from the 2015 Telus Sustainability
Report (concepts from the course have been highlighted):
We offer an integrated total rewards package that provides competitive,
performance‐based rewards aligned to our business strategy.
Compensation
Our cash compensation for employees consists of a non‐variable base salary
and a variable component that is designed to focus on results, supports the
TELUS leadership values and recognizes high performers and key talent
who are critical to the success of our organization. Consistent high
performers are compensated at or above the 75th percentile of the
competitive market wage.
TELUS’ average entry‐level wage in Canada is above the median of
minimum wages for all entry level roles, including management
professionals, bargaining unit, and retail. The overall average is 35 per cent
above the median.
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Module 9: Designing Performance Pay and Indirect Pay Plans
Benefits
Our flexible benefits allow employees to choose from several options including
life, long‐term disability, and critical illness insurance, as well as access to
comprehensive health plans. In 2015, 96 per cent of employees participated in our
extended health and dental plans.
Retirement and Savings Plans
We are committed to the financial well‐being of our employees and encourage
them to save for retirement through a variety of methods. These include: defined
contribution pensions with matching options, a voluntary group Registered
Retirement Savings Plan and a Tax Free Savings Account.
Employee Share Purchase Plan
We offer employees the ability to purchase TELUS shares through regular payroll
deductions. This flexible savings plan allows employees to purchase between one
and 10 per cent of their base compensation and up to six per cent is matched by
TELUS to a rate of 40 per cent (35 per cent for directors or above).
In 2015, more than 22,500 employees participated in the Employee Share Purchase
Plan, controlling just over 15 million shares and ranking as our fourth largest
common shareholder
Telus. (n.d.). TELUS sustainability report 2015. Retrieved from
https://sustainability.telus.com/en/supporting‐employees/employee‐experience/total‐rewards/.
The second topic in the module relates to designing employee benefit plans. There are
several types of employee benefits which range from health benefits to retirement
programs. To be considered a competitive employer, organizations have placed an
increasing priority on offering a comprehensive benefits package.
Topics
Module 9 is organized into the following topics:

Topic 1: Creating Detailed Performance Pay Plans

Topic 2: Indirect Pay: Employee Benefits
Learning Outcomes
When you have completed this module you should be able to:

Design reward and compensation systems with appropriate pay plans.

Explain why the compensation plan is appropriate for the organization.

Describe the employee benefits plan, and explain how it meets employee and
organizational needs.
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HRMN 4831: Total Rewards
M9-3
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Creating Detailed Performance Pay Plans
Activity 1: Read and Reflect: Gain Sharing, Goal Sharing,
and Profit Sharing
Activity 2: Applied Activity: Designing a Profit Sharing
Plan
Topic 2: Indirect Pay: Employee Benefits
Activity 3: Read and Reflect: Employee Benefits
Activity 4: Applied Activity: Decision Making—Benefit
Priorities
Activity 5: Terminology Self‐Assessment
Assignment 3: Establishing Pay and Benefit Plans (15%)
Resources
The following are resources you will need to complete this module:

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

Stack, J. (2000, November 1). The problem with profit sharing. Retrieved from
http://www.inc.com/magazine/19961101/1864.html. (Available in your online
course materials)

Watson, S. (2015). Profit‐sharing options: Pros and cons. Retrieved from
http://edwardlowe.org/profit‐sharing‐options‐pros‐and‐cons/. (Available in
your online course materials)

Bruineman, M. (2016, April 15). How Canadian Tire connects retirement to
profits. Retrieved from http://www.benefitscanada.com/pensions/other‐
pensions/how‐canadian‐tire‐connects‐retirement‐to‐profits‐79537. (Available
in your online course materials)
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M9-4
Module 9: Designing Performance Pay and Indirect Pay Plans
Topic 1: Creating Detailed Performance Pay Plans
Gain sharing plans have been around since the 1930s. These plans create an incentive for
employees to reduce operational costs. The various methods presented in this module
reflect the most common methods of calculating the gain, which sometimes includes non‐
labour related savings.
Goal sharing plans became popular in the 1990s and are intended to create a financial
incentive for the achievement of organizational goals. The defined goals can be individual
items or larger, more complex objectives.
Profit sharing plans are used by about 25% of all medium to large organizations. The
plans involve pay in the form of cash and company stock. While this kind of performance
pay used to be reserved for senior managers, organizations have found that a higher level
of employee commitment occurs when employees have a stake in the organization’s
success.
A key to designing gain, goal, and profit sharing systems is to be very clear about how
groups in the plan are organized; the formula for calculating the benefit; how and when
payments will be issued; and clear communications to employees.
Canadian Tire: Deferred Profit Sharing
Canadian Tire has a unique approach to profit sharing that combines the concepts
of deferred profit sharing, retirement investment, and an employee stock purchase
program together. Read the article below to learn about how their significant
profit sharing (which has been up to 12% of employee earnings in some years) is
invested in the retirement program and stock purchase program.
What is unique about this plan is the significant level of the plan coupled with the
industry. Retail is an environment where programs such as this are very scarce.
Canadian Tire has successfully tied their compensation plan to build a culture of
high commitment.
Bruineman, M. (2016, April 15). How Canadian Tire connects retirement to profits. Retrieved from
http://www.benefitscanada.com/pensions/other‐pensions/how‐canadian‐tire‐connects‐
retirement‐to‐profits‐79537.
Image source: Canadian Tire. (2007, December 16). Canadian Tire logo [Image]. Retrieved from
https://en.wikipedia.org/wiki/Canadian_Tire#/media/File:Canadian_Tire_Logo.svg.
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HRMN 4831: Total Rewards
M9-5
Activity 1: Read and Reflect: Gain Sharing, Goal Sharing, and
Profit Sharing
The purpose of this activity is to review the main concepts of gain sharing, goal
sharing and profit sharing.
1. Read the following:
o Chapter 11 from “Introduction to types of plans and design issues” to
“Employee Stock Plans” in your textbook:

Long, R. J. (2018). Chapter 11. In, Strategic compensation in Canada (6th
ed.). Toronto, ON: Nelson Education.
o Stack, J. (2000, November 1). The problem with profit sharing (Available
in your online course materials).
o Watson, S. (2015). Profit‐sharing options: Pros and cons. (Note: You have
already read this article in Module 5. It is beneficial to re‐read it in the
context of this module.) (Available in your online course materials)
2. In your learning journal, respond to the following questions:
o When designing a profit sharing plan, what are some of the important
considerations you need to plan for prior to implementation?
o After having reviewed the pros and cons of profit sharing, do you think it
is worthwhile to pursue it? Why or why not?
o What is goal sharing, and how could it be beneficial to an organization?
Activity 2: Applied Activity: Designing a Profit Sharing Plan
The purpose of this activity is to apply the concept of profit sharing to a
compensation plan.
In Module 7, Activities 2, 4, and 6, you worked through the process of researching a
salary range for a specific position, and then developed a salary range. Now you will
add the element of profit sharing to your compensation system.
Revisit your work in Module 7, Activities 2, 4, and 6 and design a profit sharing plan
for the position you researched. Be sure to include the following elements in your
description:

The formula for the bonus

Who is eligible

The frequency of payout
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M9-6
Module 9: Designing Performance Pay and Indirect Pay Plans
Topic 2: Indirect Pay Employee Benefits
It is unfortunate that this topic comes near the end of the course, because the topic of
employee benefits could easily be a course unto itself. Employee benefit programs
have become increasingly important both as a tool to support the workforce and a
recruitment tool.
Employee benefits contribute a human element to the total rewards package because
they are typically seen as supporting the financial and physical well‐being of the
individual employee.
As you will learn in this module, some of the benefits are mandatory government
programs, including contributions to the Canada Pension Plan, Employment
Insurance, and Workers Compensation programs.
The customization and creativity comes in the form of the other benefit options, in
particular health benefits, various forms of life insurance, and vacation and other
forms of leaves. The plan design can take many forms.
In recent years, programs and services that support employee well‐being have taken
on an increased focus, including employee assistance programs and wellness
programs. These programs can be customized to meet the unique needs of
employees. For example, health care professionals who deal with high levels of
personal stress, may require a program which includes counselling services. A
program designed for a manufacturing company may place an emphasis on physical
health, with gym discounts and smoking cessation programs offered.
How do you know what employees need? Insights into employee priorities can be
attained by conducting an employee benefits survey. Also, most extended health
providers create trend reports which outline the utilization of benefits like
prescription drug plans. By looking at these trends, employers can learn about the
types of medical concerns their employees have, and create programs to better
support them.
What Is Certified Employee Benefits Specialist (CEBS)?
CEBS is the leading, respected professional designation in employee benefits
administration. Courses towards certification are offered by a number of
certified providers in North America. For more information, see:

International Foundation of Employee Benefit Plans. (n.d.). Designations.
Retrieved from https://www.ifebp.org/CEBSDesignation/Overview/
Designations/Pages/default.aspx.
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HRMN 4831: Total Rewards
M9-7
Activity 3: Read and Reflect: Employee Benefits
The purpose of this activity is to review the types of employee benefits typically
incorporated into compensation strategies, including mandatory benefits, health
benefits, retirement plans, leave provisions, employee services, and other forms of
employee perks.
1. Read Chapter 12 from “Types of Employee Benefits and Services” to
“Designing the Benefit System”:
o Long, R. J. (2018). Chapter 12. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your reflective learning journal, respond to the following questions:
o What kinds of things are covered by extended health benefits?
o What is a health spending account? What are some of the challenges in
managing a health spending account program?
o What does the term flexible benefits mean? How is it different from a
standard benefits program?
o How does an employee assistance program support employee well‐
being?
Activity 4: Applied Activity: Decision Making—Benefit Priorities
The purpose of this activity is to consider the complexities of developing an
employee benefit plan.
In Module 7, Activities 2, 4, and 6 and Module 9, Activity 2, you worked through the
process of researching a compensation strategy for a specific position. The final step
now is to build a benefit program for this employee group that maintains the
organization’s budget.
Your budget for this benefits package is $400.00 per month. The package will be paid
for entirely by the employer; no employee contribution is required. Select the
benefits that you feel will be most valued and beneficial for the position you have
identified in the previous activities:
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M9-8
Module 9: Designing Performance Pay and Indirect Pay Plans
Benefit
Cost per Month
Mandatory Provincial Health Plan
110.00
Extended Health Benefits Options:

Prescription Drugs–Generic Brand Only
125.00

Prescription Drugs–All Brands
175.00

Physio Therapy–$100/Year
30.00

Physio Therapy–$200/Year
45.00

Massage Therapy–$150/Year
75.00

Massage Therapy–$250/Year
100.00

Massage Therapy–$350/Year
125.00

Glasses Coverage–$100/Year
40.00

Glasses Coverage–$200/Year
50.00

Glasses Coverage–$300/Year
60.00
Dental Benefits Options:

Scaling and Cleanings
110.00

Scaling, Cleaning, Fillings, and Orthodontics
145.00
Employee Assistance Program
8.00
Life Insurance–2 x Annual Salary
35.00
Life Insurance–3 x Annual Salary
55.00
Accidental Death Coverage
9.00
RRSP Matching–100/Month
100.00
RRSP Matching–200/Month
200.00
Total (Auto Calculate)
TRU Open Learning
Select by Clicking
HRMN 4831: Total Rewards
M9-9
Activity 5: Terminology Self-Assessment
In order to review some of the major concepts from the module, take the following
self‐assessment quiz. This ungraded quiz is intended to test your learning and does
not count towards your final mark.
Indicate if the following statements are T (true) or F (false).
Activity available in your online course materials.
Module 9 Summary
In this module, we pulled together the compensation plan including the base pay,
performance pay, and indirect pay plans. The compensation strategy needs to be
tied to organizational goals, as we learned in the two applied examples of Canadian
Tire and Telus. With a focus on employee benefits, we looked at how the options
chosen by the employer can significantly impact the cost of an employee benefit
program.
In the final module, we will review guidelines and strategies to successfully
implement and evaluate a compensation plan.
References
Bruineman, M. (2016, April 15). How Canadian Tire connects retirement to profits.
Retrieved from http://www.benefitscanada.com/pensions/other‐pensions/how‐
canadian‐tire‐connects‐retirement‐to‐profits‐79537.
International Foundation of Employee Benefit Plans. (n.d.). Designations. Retrieved
from https://www.ifebp.org/CEBSDesignation/Overview/Designations/
Pages/default.aspx
Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON: Nelson
Education.
Stack, J. (2000, November 1). The problem with profit sharing. Retrieved from
http://www.inc.com/magazine/19961101/1864.html.
Telus. (n.d.). TELUS sustainability report 2015. Retrieved from
https://sustainability.telus.com/en/supporting‐employees/employee‐
experience/total‐rewards/.
Watson, S. (2015). Profit‐sharing options: Pros and cons. Retrieved from
http://edwardlowe.org/profit‐sharing‐options‐pros‐and‐cons/.
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HRMN 4831: Total Rewards
M10-1
Module 10: Implementing Managing and
Evaluating Compensation Systems
Overview
Congratulations, you have arrived both at the conclusion of the Total Rewards
implementation cycle and at the final module in this course.
There are few things as difficult, controversial and challenging as implementing a
compensation plan. Employees rarely (if ever) say “please, stop paying me so much,
I really don’t deserve it”. The reality is that few things impact an individual
employee’s life more than the compensation plan of their employer. So the
implementation process needs to be carefully planned, budgeted, communicated
and implemented.
When implementing a new compensation system, logistics like what kind of
software or technology will be required in order to issue the pay employees should
be purchased. If there are relatively few employees, should the service be
outsourced? Who will administer the benefits program, how will new employees
sign up for their benefits? And who will be responsible for communicating with
employees about their compensation and benefits, who will solve problems that
arise? These kinds of realities exist when contemplating the ongoing maintenance of
the system. As you can see, designing the system is only the beginning; managing
and maintaining it takes a great deal of effort.
Finally, an assessment must occur to see if the goals and objectives the organization
had in mind when it designed the system, in particular elements related to pay for
performance, were actually achieved?
Topics

Topic 1: Implementation Process
Learning Outcomes
When you have completed this module, you should be able to:

Describe how to implement, manage, evaluate, and adapt a compensation
system.

Develop an evaluation cycle for the reward system.

Define the considerations prior to implementation.
TRU Open Learning
M10-2
Module 9: Designing Performance Pay and Indirect Pay Plans
Assessment and Activity Checklist
Here is a checklist of suggested and mandatory learning activities you will benefit
from completing in this module. You may find it useful for planning your work.
✓
Activities
Topic 1: Implementation Process
Activity 1: Read and Reflect: Implementation Processes
Activity 2: Applied Activity: Building a Compensation
Budget
Activity 3: Applied Activity: Communications Plans
Activity 4: Read and Reflect: Monitoring Changing
Circumstances
Activity 5: Research: Adapting to Financial Crisis
Final Exam
Resources
The following are resources you will need to complete this module.

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.

A counterintuitive system for startup compensation. (n.d.). Retrieved from
http://firstround.com/review/A‐Counterintuitive‐System‐for‐Startup‐
Compensation/. (Available in your online course materials)
Topic 1: Implementation Process
For anyone who has seen the movie The Social Network, the image of the social media
giant’s start‐up involves college students making their way into the business world
in a frantic manner. Fast forward four years, with over 400 employees, Facebook was
ready for a well thought‐out compensation strategy.
The article below articulates perfectly the challenges of implementing a
compensation system. It’s a topic that will be discussed by employees, and they will
have strong opinions. It is important to create fairness and equity.
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HRMN 4831: Total Rewards

M10-3
A Counterintuitive System for Startup Compensation. (n.d.). (Available in
your online course materials)
As the article explains, Facebook hired a number of “exceptional employees”, many
of which felt that special compensation would be needed. It was one of the
important issues they had to address, and they did so in a transparent way.
In the activities below, you will contemplate the implementation of your system by
first estimating the costs, then preparing the communications, and anticipating the
unexpected speed bumps that may impact your compensation roll‐out.
Activity 1: Read and Reflect: Implementation Processes
The purpose of this activity is to explore the implementation of a compensation
system, including establishing a budget, managing communications, and ensuring
that computer systems are able to properly manage the implementation.
1. Read Chapter 13 from “Introduction to putting the systems in place” to
“Impact on Employee Behaviours and Attitudes”in the textbook:
o Long, R. J. (2018). Chapter 13. In, Strategic compensation in Canada (6th ed.).
Toronto, ON: Nelson Education.
2. In your reflective learning journal, respond to the following questions:
o When creating a budget, what is the difference between a bottoms‐up
versus a top‐down budget approach?
o What are some of the considerations an employer needs to balance
regarding information technology?
o What are the six steps to consider when implementing the compensation
system?
Activity 2: Applied Activity: Building a Compensation Budget
The purpose of this activity is to practice building a budget to estimate the cost of a
total rewards plan.
Using the template below as a guide, work through the process of building a budget
for the Fit Stop case study we have been working through in this course.
1. Multiply the hourly wage × the number of hours worked per week.
2. Multiply the weekly wage × 52 to calculate the yearly wage.
3. Multiply the yearly salary × 1.09 to calculate the salary plus mandatory
benefits.
4. Multiply the total cost × the number of employees in each category.
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Module 9: Designing Performance Pay and Indirect Pay Plans
5. Calculate the yearly benefit costs by calculating the monthly benefit fee × 12.
6. Estimate that the number of employees who will achieve their yearly profit
sharing bonus will be five sales representatives and one physiotherapist.
Multiply the yearly base salaries × 5%.
7. Add Sub Total Value + Benefits Plan + Profit Sharing Estimate.
8. Total the cost by employee group, and add them together to get the overall
salary budget.
Position
Hourly Hours Per
Wage
Week
Weekly
Salary
Yearly
Salary
% for
Mandatory # of EE’s
Benefits* 9%
Sub
Total
Sales Rep
40
× 52
weeks
=$400×12
12
Physio
40
× 52
weeks
=$400×12
2
Manager
40
× 52
weeks
=$400×12
1
Benefits
Plan
Activity 3: Applied Activity: Communications Plans
The purpose of this activity is to anticipate the employee communications required
when implementing an employee compensation plan.
Write a memo to employees describing the total rewards strategy for the Fit Stop
case study we have been working through in this course. Consider the following:
1. Are the compensation levels (salary range) known or confidential to
employees in different employee groups?
2. Describe the profit sharing and performance expectations clearly.
3. Identify the date/timeline regarding the profit sharing program.
4. Describe the benefit program. (If this were a real communications document,
you would attach benefit reimbursement forms.)
5. Identify who will respond to employee questions about employee
compensation.
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SharingProjected
(5%)
HRMN 4831: Total Rewards
M10-5
Activity 4: Read and Reflect: Monitoring Changing
Circumstances
The purpose of this activity is to consider circumstances that may require the
organization to review or reconsider its compensation strategy.
1. Read Chapter 13 from “Adapting the Compensation System” to “Summary” in
your textbook:

Long, R. J. (2018). Strategic compensation in Canada (6th ed.). Toronto, ON:
Nelson Education.
2. In your reflective learning journal, respond to the following questions:

What options does an organization have to deal with a financial crisis or
another unexpected anomaly?

After implementing a compensation strategy, the organization is unable to
recruit individuals to fill the vacancies it has. What next steps or options
would you recommend?

What are your thoughts about making exceptions to your compensation plan
for individual employees? Is it a necessary reality or not worth the difficulties
it causes?
Activity 5: Research: Adapting to Financial Crisis
The purpose of this activity is to explore the way that organizations responded to the
2008 turbulent financial environment.
Conduct research online to see the ways that organizations managed during the
recent financial crisis.
1. Did organizations experience layoffs or downsizing to manage labour costs?
2. Did any organization roll back wages or cancel performance pay bonuses?
3. What other ways did organization respond to the financial crisis?
Module 10 Summary
In this module, we learned about implementation considerations when preparing for
a compensation system change. One of the most important aspects is making a
budget estimate which considers the cost of base pay, the projected cost of
performance pay, and the cost of indirect pay.
Another important step, and one which is sometimes underestimated, is employee
communications. It is very important that employees understand fully how the
compensation system works, and what that criteria is for any pay for performance
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Module 9: Designing Performance Pay and Indirect Pay Plans
elements. This communication is essential to the perception of fairness held by the
employee system.
Finally, we always needs to be mindful of changing circumstances that impact
compensation systems, in particular the economic, political, and legal framework,
which may create the need for change and adjustment.
Final Exam (40%)
After completing all the work in this course and studying these materials, you
should be ready to write your Final Exam.
You are responsible for ensuring that Thompson Rivers University, Open Learning
receives your exam application by the deadline. For detailed information about how
to schedule this exam within the application deadlines, go to
http://www.tru.ca/distance/services/exams.html#schedule.
To prepare for the mandatory, invigilated final exam, review the module summaries
and textbook chapters. All of the questions will be related to concepts found within
your textbook. The final exam for this course is graded out of 100 marks, and
comprised of the following question types:
1. Terminology Check (20 marks)
2. Short‐Answer Questions (50 marks)
3. Long‐Answer Question (30 marks)
Good luck, and we wish you all the best in your career!
TRU Open Learning