UNIVERSITY OF SOUTHERN INDIANA
School of Business
Management 441
Wage and Salary Administration
Spring 2005
W 600-845p OC 2025
Dane M. Partridge, Ph.D.
OC 3066C
465-7085
465-1044 (fax)
dpartrid@usi.edu
http://business.usi.edu/dpartrid/
Office Hours:
MWF 930-1045a
W 430-545p
and by appt.
INTRODUCTION
Management 441 is a comprehensive study of wage and salary policies and techniques, including
wage and salary level determination, job evaluation, employee performance appraisals and merit
ratings, methods of wage payments, employee benefits, and compensation controls. A major
challenge for organizational management today, perhaps the major challenge, is to attract and
retain qualified workers and motivate those workers to perform their jobs well. The compensation
system is a primary tool in accomplishing these goals. An organization's reward system and its
application indicate explicitly how highly a person and his/her contributions are valued, and what
kinds of behavior are needed and desired by the organization. Compensation is considerably more
than an hourly wage rate; it is a total reward system including incentives and benefits as well.
Note: MNGT 201: Survey of Management or MNGT 305: Management of Organizational Behavior,
is the prerequisite for this course.
READINGS AND PROJECTS
Students should obtain the following books:
Bergman, Thomas J., and Vida Gulbinas Scarpello. Compensation Decision Making, 4e.
Southwestern, 2002.
Milkovich, George T., and Carolyn Milkovich. Cases in Compensation, 9e, 2004.
Copies of the text and casebook should be available for purchase in the Bookstore. All other
assigned readings will be on reserve in the David L. Rice Library or available from the instructor.
Supplements to the course outline and reading assignments may be distributed during the
semester.
Much of the information about trends in management that you will obtain as a manager will come
from business periodicals, such as the Wall Street Journal, Business Week, and Fortune. It is
important to learn how to read these sources quickly and critically. As you do so, you should keep
in mind the following questions: (1) What is the “story” that the article is telling? And (2) What kind
of evidence does the article use (should we believe the article’s conclusions)? Note that if you elect
to subscribe to the Wall Street Journal, you are provided free access to the Wall Street Journal
Interactive Edition as well.
The casebook will provide you with hands-on experience making decisions about paying people.
The projects will expose you to a rich variety of problems and challenges that confront managers.
Your overall assignment is to design a pay system for FastCat, a fictitious business-to-business
software company founded in the 1980s as an outgrowth of work done at a farm implement sales
company. In designing FastCat's system, you will learn how to apply basic compensation
techniques. Managers must align their compensation decisions with the organization's business
strategy, values, and unique circumstances.
Each student will be assigned to a "project team" which will be responsible for preparing the
project reports. The project reports are due at the beginning of the period; late reports and other
assignments will be penalized by 50 percent (and any late assignments must be submitted no later
than one week following the original due date). Any in-class assignment missed due to absence
must be submitted within one week.
COURSE REQUIREMENTS, METHODS OF EVALUATION, AND RESPONSIBILITIES
In addition to the required reading assignments and project reports, there will be three exams.
Grading will be determined on the basis of the following weights:
Exams
Project reports
Briefings and
class participation
45% (3 @ 15% each)
45%
10%
Regular attendance is recommended, as the class meetings and required readings are intended to
be complements, not substitutes. The required reading is the foundation for the course; the class
meetings will build on that foundation. On the exams, students will be responsible for both material
covered by the readings and material discussed in class. Students are expected to keep up with
the required reading, as assigned, and to come to class prepared for discussion. Students are
reminded that under the credit hour system a three credit class requires on average six hours of
outside preparation per week.
Students often observe that they would like their classes to “better relate to the real world.” For
students to apply what they have learned in the classroom to actual work environments students
have responsibility for active, rather than passive, involvement in the learning process. The
instructor’s role in active or experiential learning is to serve as a facilitator of student-directed
learning, rather than being the provider of teacher-directed instruction. Some have called this a
shift from “teaching by talking” toward “learning by doing.” The responsibility for learning is borne
by the learner, while the teacher makes resources available and helps the learning process. The
instructor’s primary objective with respect to this course is that students will acquire knowledge,
skills, and abilities that will make them more competitive in the job market and more effective
members of the organizations they join upon graduation.
Further details of these requirements and grading procedures will be discussed in class as is
necessary.
Students are encouraged to stop in during office hours to talk about any problems or suggestions
you may have concerning the course, about careers, or just about management or things in
general. If the scheduled office hours are inconvenient feel free to make an appointment. To
underscore the value of office hours each student will be expected to meet briefly with Dr. Partridge
early in the semester. To facilitate electronic communication, students are requested to schedule
this initial appointment via e-mail. Please be reminded that USI provides free e-mail for students
through MyUSI. The University routinely uses this USI e-mail account for both formal and
informal communications with students. Students are expected to check their USI e-mail
account regularly for University correspondence. If you prefer to use an e-mail account other
than the one provided you by USI, you should forward your USI e-mail to the account you use
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most often.
WHAT (SOME) STUDENTS LIKED LEAST…
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“FastCat!!!”
o Yes, FastCat is a lot of work. Yes, you will likely be unsure as to what you’re doing at
points (anytime you do something for the first time, uncertainty is to be expected).
But, simply put, it’s not what you know (or in our more cynical moments what’s been
learned and forgotten) but what you can do. Projects such as FastCat develop your
ability to put concepts into practice, which is what matters in organizations.
“Difficult to meet with other group members because of our schedules”
o Given that many USI students work full-time, the logistical hurdles to arranging
meeting times outside of class may be considerable; be reminded that electronic
communication such as e-mail and/or Blackboard group discussion boards can be a
viable alternative to physically assembling a group in one place at one time. Use the
class time provided to organize the project, and focus on project management (who’s
going to do what by when).
“Being called on in class and put on the spot”
o Exams aren’t optional, projects aren’t optional, why should participation be voluntary?
Student Rights and Responsibilities: Academic Misconduct
Truth and honesty are necessary to a university community. Each student is expected to do his or
her academic work without recourse to unauthorized means of any kind. Both students and
faculty are expected to report violations to academic honesty. USI policies and regulations
governing the conduct of students and the procedures for handling violations of these policies and
regulations are found in the USI Bulletin and on the Dean of Students' website
(http://www.usi.edu/stl/index.htm).
Students are reminded of the School of Business expectations regarding the avoidance of
plagiarism. Plagiarism includes:
(1) failing to cite quotations and borrowed ideas,
(2) failing to enclose borrowed language in quotation marks, and
(3) failing to put summaries and paraphrases in your own words.
(Source: Diana Hacker, A Pocket Style Manual 2e (Boston: Bedford/St. Martin’s, 1997), p. 92.)
Students are specifically reminded that electronically copying text from a source document such as
a web page and pasting that into one’s own document, without putting the borrowed language in
quotation marks, is plagiarism, even if the source of that language is included in a reference list or
an in-text citation.
AMERICANS WITH DISABILITITES ACT COMPLIANCE
If you have a disability, you are encouraged to register for disability support services in the
Counseling Center. If you require an accommodation, please advise the instructor by the end of
the first week of class. You may be required to provide written documentation to support these
accommodations. The instructor will work with you to provide reasonable accommodations to
ensure that you have a fair opportunity to perform and participate in class.
THE INSTRUCTOR
DANE M. PARTRIDGE -- Associate Professor of Management; B.A., Michigan State University; M.S.,
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Cornell University; Ph.D., Cornell University. Dr. Partridge's primary teaching and research interests
involve human resource management and labor relations. His research has been published in the
Journal of Collective Negotiations in the Public Sector, the Employee Responsibilities and Rights
Journal, and the Journal of Labor Research, and the Denver University Law Review. Current
research areas include the effect of pay structures on worker attitudes and gender differences in
perceptions of sexual harassment. Dr. Partridge has presented management development programs
on topics including employee involvement in quality improvement and managing workforce diversity.
Dr. Partridge has also taught at Virginia Tech, Radford University, and Roanoke College, and has
received several awards for teaching excellence.
COURSE OUTLINE, TENTATIVE SCHEDULE, AND READING ASSIGNMENTS
Note: only those supplemental readings marked with a “*” are assigned to all; others will be divided
for presentation by individual students. Those readings marked with a “@” will be divided for
presentation by a pair of students. Presentations of supplemental readings are expected to be a
brief summary of the several key points in the article and the implications for managers; these
presentations will be expected to make use of a visual aid such as a PowerPoint-generated
overhead transparency. The briefings are intended to reinforce students’ analytical and
communication skills: every USI business graduate should be able to read a Wall Street Journal,
Harvard Business Review, or other practitioner publication article, identify the key points (the
implications for managers), and communicate those points effectively to their colleagues.
Consistent with the active learning approach, if you’re not sure what the point of a briefing is (the
“so what”), ask! All supplemental readings are intended to reinforce, elaborate upon, or provide
additional examples of material contained in the text and lecture.
1. INTRODUCTION (1/12, 1/19a)
a. Introduction to Compensation
b. A Strategic Perspective
 “Growing Pains,” Harvard Business Review, July-August 1996. (*)
 Jeffrey Pfeffer, “Six dangerous myths about pay,” Harvard Business Review,
May-June 1998. (*)
 Edward E. Lawler III, “Pay Strategy: New Thinking for the New Millennium,”
Compensation and Benefits Review, January-February 2000. (*)
 “Cultivating a Culture,” Washington Post, April 21, 2002.
 Parbudyal Singh, “Strategic Reward Systems at Southwest Airlines,”
Compensation and Benefits Review, March-April 2002. (@)
2. LEGAL ENVIRONMENT (1/19b, 1/26a)
 Fay Hansen, “The Importance of Compliance,” Compensation and Benefits
Review, May-June 2000. (@)
 “No Way to Treat a Lady?” Business Week, March 3, 2003.

Compensation Strategy and Objectives Project due 1/26
Paul Platten and Carl R. Weinberg, “Shattering the Myths About dot.com
Employee Pay,” Compensation and Benefits Review, January-February
2000.
William J. Liccione. “Implications of Changes in Technology Companies for
Incentive Compensation,” Compensation and Benefits Review, JanuaryFebruary 2001.
3. THEORETICAL FRAMEWORK (1/26b, 2/2a)
a. Economic Constraints
b. Worker Behaviors
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4. INTERNAL EQUITY (2/2b, 2/9)
a. Job Analysis
 “Blank Check: AES Corp’s radical plan: Some managers are paid whatever
they think they’re worth,” Wall Street Journal, April 9, 1998.
b. Job Evaluation
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EXAM I (2/16a)
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Phase I Internal Alignment Project due 2/23
5. PAY STRUCTURE DECISIONS
a. Job Pricing (2/16b, 2/23)
 “Salaries in site,” HRMagazine, May 2001.
b. Pay Structure Design (3/2)
 Peter Cappelli, “A Market-Driven Approach to Retaining Talent,” Harvard
Business Review, January-February 2000. (*)
 “The Broad View: A new approach to pay scales gives employers greater
flexibility,” Wall Street Journal, April 10, 1997.
 Lin Grensing-Pophal, “Communication Pays Off,” HRMagazine, May 2003.
(*)

Phase II External Competitiveness Project due 3/23
6. PAY FOR PERFORMANCE
a. Performance Assessment (3/16)
 Bob Nelson, “Are Performance Appraisals Obsolete?” Compensation and
Benefits Review, May-June 2000.
 Steve Bates, “Forced Ranking,” HRMagazine, June 2003. (*)
b. Individual and Group Incentives (3/23)
 J. Stephen Heinen and Edward S. Bancroft, “Performance Ownership: A
Roadmap to a Compelling Employment Brand,” Compensation and Benefits
Review, January-February 2000. (@)
 Regina Shanney-Saborsky, “ESOPs and the Employee Ownership Culture:
Balancing Compensation and Equity,” Compensation and Benefits Review,
January-February 2000. (@)
 Mark A. Stiffler, “Eliminating the Hidden Costs Buried in Your Incentive
Compensation Plan,” Compensation and Benefits Review, January-February
2000. (*)
 Charlotte Garvey, “Goalsharing Scores,” HRMagazine, April 2000.
 Claire Ginther, “Incentive Programs That Really Work,” HRMagazine, August
2000.
 “The Amazing Stock Option Sleight of Hand,” Fortune, June 25, 2001. (*)
 Michael C. Jensen, “Corporate Budgeting is Broken – Let’s Fix It,” Harvard
Business Review, November 2001. (@)
 “Betting It All on Company Stock Is Risky Business,” Los Angeles Times,
November 30, 2001.
 “Battered, Bruising Stock Options Seen in Harsh Light of New Day,” Boston
Globe, December 2, 2001.
 Marc Knez and Duncan Simester, “Making Across-the-Board Incentives
Work,” Harvard Business Review, February 2002.
 “Options Frenzy: What Went Wrong?” Wall Street Journal, December 17,
2002.
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Steve Bates, “Top Pay for Best Performance,” HRMagazine, January 2003.
(@)
“The Best-Laid Incentive Plans,” Harvard Business Review, January 2003.
(*)
John Kiska, “Customer Satisfaction Pays Off,” HRMagazine, February 2004.
(@)
EXAM II (3/30a)
7. EMPLOYEE BENEFITS (3/30b, 4/6, 4/13)
 Roger Battistella and David Burchfield, “Employment-based health insurance: The
inevitable transition from defined benefit to defined contribution,” Compensation &
Benefits Management, Winter 1999. (*)
 Paul E. Sullivan, Jr., “Defined contribution health plans: Future or fad?
Compensation & Benefits Management, Winter 2001.
 “Employers Win Big With a Pension Shift; Employees Often Lose,” Wall Street
Journal, December 4, 1998.
 “Many Mobile Workers Fail to Reap Promise of New-Style Pensions,” Wall Street
Journal, December 16, 1999.
 “Many Workers Are Missing Out on 401(k) Plans,” Wall Street Journal, December
16, 1999.
 “Health Insurance Is Called Inadequate In Many Cases for Low-Income Workers,”
Wall Street Journal, December 30, 1999.
 Michael E. Lichman and Herbert B. Smith, “Cash Balance Plans,” Compensation
and Benefits Review, March-April 2000.
 William Atkinson, “Is Workers’ Comp Changing?” HRMagazine, July 2000.
 Andrea C. Poe, “The Baby Blues,” HRMagazine, July 2000.
 Robert F. Clark, “Guest Column [Retirement Benefits Innovation],” Compensation &
Benefits Management, Autumn 2000. (*)
 “The New Health-Cost Crisis,” Harvard Business Review, November 2001.
 “Mounting Health Costs Have Companies Rethinking Insurance Options,” Atlanta
Journal and Constitution, December 7, 2001.

Phase III Performance & Execution Project due 4/20
8. COMPLETING THE COMPENSATION PACKAGE
a. Labor Markets and Labor Unions (4/20a)
b. Compensation Control and Administration (4/20b)
c. Special Compensation Situations (4/27)
 Alfred Rappaport, “New thinking on how to link executive pay with
performance,” Harvard Business Review, March/April 1999. (*)
 “More Directors Are Raking In Six-Figure Pay,” Wall Street Journal, October
29, 1999.
 Timothy W. Weiler and Christopher Tuffli, “Getting Beyond Pay in Managing
“The Deal” With Your Sales Force,” Compensation and Benefits Review,
January-February 2000. (@)
 Bill Weeks, “Setting Sales Force Compensation in the Internet Age,”
Compensation and Benefits Review, March-April 2000. (@)
 S. Scott Sands, “Ineffective Quotas: The Hidden Threat to Sales
Compensation Plans,” Compensation and Benefits Review, March-April
2000. (@)
 Howard Risher, “Dow Chemical’s Salary Program: A Model for the Future?”
Compensation and Benefits Review, May-June 2000. (*)
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Edward E. Lawler III, “Pay Can Be a Change Agent,” Compensation &
Benefits Management, Summer 2000.
“Commentary: The Artificial Sweetener in CEO Pay,” Business Week, March
26, 2001.
“When Salaries Aren’t Secret,” Harvard Business Review, May 2001. (*)
Charlotte Garvey, “Steer teams with the right pay,” HRMagazine, May 2002.
(*)
Charles Elson, “What’s Wrong with Executive Compensation?” Harvard
Business Review, January 2003. (@)
“More Work, More Pay,” Wall Street Journal, February 24, 2003.
“Cross Selling or Cross Purposes?” Harvard Business Review, July/August
2004. (*)
FINAL EXAM: Wednesday, May 4, 600-800p
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