CHAPTER 9:
COMPENSATION
MANAGEMENT
Main Contents
 A BRIEF INTRODUCTION TO COMPENSATION
 PAY SYSTEM
 PROCESS OF DESIGNING PAY SYSTEM
 BENEFITS
一．A BRIEF INTRODUCTION TO
COMPENSATION MANAGEMENT(第一节薪酬管
理概述 )
1.Definition
2. Compensation Constitutions
3. Importance of Compensation
4. Principles of compensation Management
5. Factors Influencing Compensation
1.Definition for Compensation
 Compensation represents all kinds of
rewards received by an employee in
exchange of his or her time, efforts, and
work.
2. Compensation Structure
wages basic pay
incentive pay
merit pay
Direct
Indirect
bonuses
premiums
subsidies
stock options
benefits
Public Benefits
Individual benefits
Paid Holidays
Life Benefits
3. Roles of Compensation
 To attract
 To retain
 To motivate
 To guarantee
 To symbolize
4. Principles of compensation
Management.
 A. Equitable: (公平性)
 B. Cost-effective: (经济性)
 C. Incentive: (激励性)
 D. Competitive: (竞争性)
 E. Legal: (合法性)
5. Factors Influencing
Compensation
Ａ. External Factors（外部因素）
 Policy
 Economic Conditions(经济因素)
 Labor
Market(劳动力市场）
 Industry Wage Rate（同一行业水平）
 Ownership System（所有制）
 Local Cost of Living Index（生活指数）
Ｂ. Internal Factors (内部因素)
 Compensation Culture: (文化)
 Employer’s Ability to pay: (业主支付能力)
 Stage of Development (企业的发展阶段)
 Individual factors: (个人因素) education,
abilities, and length of service，ability
and post.
发展阶段 工资 奖金
福利
启动期
低
高
低
高增长期
具有竞争力 高
低
成熟期
具有竞争力 具有竞争力
具有竞争力
稳定期
高
低
高
衰退期
高
没有
高
二、PAY SYSTEM(工资制度）
 （1）Tech grade pay system
 （2）Job grade pay system
 （3）Post &skill-based pay system
 （4）Structure pay system
 （5）Negotiating pay system
 （6）Deducting pay system
三.DEVELOPING PAY LEVELS（第三节工
资水平设计）
Process of Developing Pay Levels


Deciding What to Pay
Job analysis and job evaluation



Pay Policy Line
Pay surveys
pay grades

Implementation of pay system

Adjustment of pay system
1) Deciding What to Pay
 Whether to pay above, at, or below
the market average.
2) Job Analysis
3) Job Evaluation
Definition:
One typical way of measuring job worth is to
use an administrative procedure called job
evaluation.
Compensable Factor:
Working conditions
Responsibility
Required experience
Required education
Methods
Methods
 The Point –factor system(计点法）
 The Factors Comparison System（因素比
较法）
 Ranking（排序法）
The point –factor system(计点法/点排列法)
STEPS
Choosing & separating the compensable factors
Weighting the semi-compensable factors
Grading the semi-compensable factors
Distributing scores to the semi-compensable factors
Evaluating & calculating the total points for each job
1ST
2ND
3RD
4TH
5TH
DEGREE
DEGREE
DEGREE
DEGREE
DEGREE
1. Education
14
28
42
56
70
2. Experience
22
44
66
88
110
3. Initiative and ingenuity
14
28
42
56
70
10
20
30
40
50
5
10
15
20
25
6. Equipment or process
5
10
15
20
25
7. Material or product
5
10
15
20
25
8. Safety of others
5
10
15
20
25
9. Work of others
5
10
15
20
25
10. Working conditions
10
20
30
40
50
11. Hazards
5
10
15
20
25
FACTORS
Skill
Effort
4. Physical demand
5. Mental or visual demand
Responsibility
Job Conditions
The Factor Comparison System(因素比较法)
STEPS
Choosing key jobs
Choosing the compensable factors
Setting pay rate per hour
Distributing pay value to key jobs
Comparing non-key with key jobs
Distributing pay value to non-key jobs
 Ranking （排序法/序列法）
The system places jobs or positions in
orders, from the simplest to the most
challenging.
 步骤：
 1.成立评定小组（最好由企业领导、职能部门领导/HR领导
组成），做好准备工作。
 2.了解情况，收集有关岗位方面的资料。
 3.评定人员依据评定因素对本企业同类岗位（如技术类）的
重要性逐一评判后排序。
 4.将经过所有评定人员评定的每个岗位的结果加以汇总，得
到序号和，然后将序号和除以评定人员的人数，得到每一岗
位的评价序数，最后，按平均序数的大小，由小到大对各岗
位进行排序。
3). Pay Policy Line(薪酬结构线设
计)
 The
Pay Policy Line depicts the pay rates
being paid for jobs relative to their relative
values.
2. 折线
1. 单线
实
付
工
资
（
￥
）
a
b
职务评价分数
实
付
工
资
（
￥
）
c
d
职务评价分数
4).MARKET PAY SURVEYS(薪酬调查)
 A pay survey is a collection of data on
pay system such as pay level , pay
rates for employees performing similar
jobs in other firms or pay range ，
grade distance and numbers.
 Why, Whom， What ,How?
 调查的步骤：
 1.调查的具体目标
 2.确定调查的具体工作岗位
 3.选择调查的企业，宜多不宜少，双方受益
 4.设计问卷，简单明了，请求专家帮助
 5.实施调查，细致认真，指导填写
 6.分析数据，科学公正
5)． ESTABLISHING PAY GRADE
（建立工资等级）
6).Implementation of pay system
7).Adjustment of pay system
 Reason
Change of Environments
Change of Operation Strategy
 Type
According to standing
According to profit
According to living index
According to Performance
三．BENEFITS
1.Definition
 It refers to a compensation rewards
paid to employees in order to
safeguard their life, safety and
health.
2. kinds of Benefits
 A. Public Benefits (公共福利)
 B. Individual benefits (个人福利)
 C. Paid Holidays(有偿假期)
 D. Life Benefits(生活福利)
A. Public Benefits (公共福利)
 unemployment insurance (失业保险)
 Injury and Disability Insurance(伤残保险)
 Old-age Insurance (养老保险)
 Medical-care Insurance (医疗保险)
 Birth Insurance (生育保险)
B. Individual benefits (个人福利)
 Saving (储蓄)
 Severance pay（辞退金）
 Transportation fee (交通费)
 Life insurance（人寿保险）
 Free lunch (工作餐)
 Pension（退休金）
C. Paid Holidays(有偿假期)
 sick leaves (病假)
 Paid Holidays (节假日)
 Personal Leaves(事假)
 Vocations (公休)
 Training programs (培训)
 Travels(旅游)
D. Life Benefits(生活福利)
 Kindergarten（托儿所）
 Psychological counseling(心理咨询）
 Loan guarantee（贷款担保）
 House-moving allowance（搬迁津贴）