Explain Various Wages and Compensation
Concepts
Explain why job evaluation is
necessary. Give examples
23 August 2010
Advance Personnel Management 4
Presentation
Lecturer Mr. S Mgudlwa
Group Members
 Amanda Socenywa
 Archibald Mkubukeli
 Khaya Valashiya
 Boniswa Gae
 Lettie Mabena
 Grace Malapi
Objectives of the presentation
Learners will be able to
 Understand the nature of the compensation and Job evaluation
strategies
 Understand the components of a compensation management
and job evaluation
 Understand the use of variable reward programs
 Discuss the use of salary packaging and benefits
 Be aware of current compensation issues and trends in
compensation management
Compensation
What Is Compensation?

Compensation is the total reward received by
an employee in exchange for services
performed for an organization.
Dunn JD, Rachel FM, wage and salary administration: Total compensation systems
Strategic objectives of compensation
The strategic objectives of compensation are to:
 Reward past performance
 Remain competitive in the labour market
 Maintain salary equity among employees
 Motivate employees future performance
 Attract and retain good staff
 Reduce unnecessary staff turnover
Alan N, Robert C. Marian B, Strategic human Resource management 2002 4th edition
Compensation continued

Purpose of compensation
WATSON, S. (2005) is job evaluation making a comeback - or did it never go away?
Benefits and Compensation International. Vol 34, No 10, June. Pp8-12, 14.
Compensation systems

Fixed Compensation

Variable or Temporary Compensation
Richard I. Henderson, compensation management: rewarding performance 6th
edition
Compensation cont

Incentives and recognition rewards

Incentives Rewards
Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human
Resources Management in south Africa 3rd edition 2006
Compensation Policy

Matching the competition

Lead policy

Lag approach
Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th edition
Advantages of compensation
Employer




Job satisfaction
Motivation
Low Absenteeism
Low Turnover
Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th
edition
Advantages cont.
Advantage to Employees:


Peace of Mind
Increases self-confidence
Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th
edition
Wages
. definition

Wages is remuneration received by an
employee (group of employees) for service
rendered during specific period of time –
hour, week, or month.
Milkovich, GT&Newman, JM.2002. Compensation.8th edition.Boston: Irwin Mc Graw-Hill
Wages continued
The main types of wages are:
 Subsistence wage;

Minimum wage;

Fair Wage; and

Living Wage
Milkovich, GT&Newman, JM.2002. Compensation.8th edition.Boston: Irwin Mc Graw-Hill
Job evaluation

Is the process of systematically determining
a relative internal value of a job in an
organization………………….
EGAN, J. (2004) ‘Putting job evaluation to work.’ IRS Employment
Review. No 792, 23 January. Pp8-15.
Job evaluation continued

Principles of Job Evaluation

When to use job evaluation

Types of job evaluation
CAS. (2008) Job evaluation: considerations and risks. Advisory booklet.
London: Acas. Available at:
http://www.acas.org.uk/index.aspx?articleid=682
Job evaluation continued

Implementing a scheme
advantages and disadvantages of job
evaluation methods

Job ranking methods

Job classification method

Point method
Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human
Resources Management in south Africa 3rd edition 2006
Advantages and Disadvantages
continued

Factor comparison method
Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human
Resources Management in south Africa 3rd edition 2006
Conclusion
Recommendations