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Education Resources

Compensation Management – Salary Negotiation

Tuesday, February 24, 2009

Compensation management chapter contain wage and salary aspect. The word salary applies to compensation that is uniform from one period to the next and does not depend upon the number of hours worked.

Compensation Management Objectives:

Wage, Compensation and their administration

Job Satisfaction

Labour and Wage Theories

Classification of Wages

Machinery for fixing wages

Job Evaluation

Objectives of job evaluation and methods of evaluation

Promotions and transfers

Wage and Salary Administration:

The term compensation management is the alternative of wage and salary administration. Wage word is commonly used for those employees whose pay is calculated according to the number of hours worked. The concept of wage came from capitalist before it in the Jamindari system the concept of wage was in the slaves form. Salary applies to compensation that is uniform from one period to the next and does not depend upon the number of hours worked. When we got for job definition we found that job is defined as a collection or aggregation of tasks, duties, and responsibilities that, as a whole, is regarded as the reasonable assignment to an individual employee. Job is known as impersonal however position is known as personal. Job always contains a position which defines some set of works.

Job Satisfaction

Job satisfaction depends on the situations and environment of work atmosphere. According to the MBA Book MB 0027, “Job satisfaction is determined by a set of personal and job factors, personal factors relate to worker’s age, length of service, intelligence, skill, and other personality or temperamental factors.

About the Job Evaluation British Institute of Management has defined “job evaluation as the process of analysis and assessment of jobs to ascertain reliably their relative worth, using the assessment as a basis for a balanced wage structure.”

“Job analysis is the process of getting information about jobs; specifically, what the worker does; how he gets it done; why he does it; skill, education and training required; relationships to other jobs; physical demands and environmental conditions”.

On the job evolution methods we can include some aspects:

Ranking methods

Grade Description Method

Point Method

Factor-Comparison Method

Time-Span Method

Guide-Chart Profile Method

Pigors & Meyers give a unique definition of promotion which is, “the advancement of an employee to a better job – better in terms of greater respect of pay and salary. Better houses of work or better location or better working conditions-also may characterize the better location or better working conditions-also may characterize the better job to which an employee seeks promotions, but if the job does not involve greater skill or responsibilities and higher pay, it should not be considered a promotions.”

On the Subject of Transfer Pigors and Mayers also writes, “the movement of an employee from one job to another on the same occupational level and at about the same level of wages or salary.”

In the end of the chapter we can say that Compensation Management deals not only salary and wages but also job analysis and job satisfaction.

Performance Appraisal : Evolution of Employee Performance

Friday, February 6, 2009

Performance is a type of evolution about employee which tells the organization about the employee skills and their work efficiency. Performance appraisal is evaluating the employee’s work and gives the chance to their career growth and satisfaction.

Performance Appraisal Objectives:

Meaning of performance evaluation and recognition

Various techniques and methods of evaluation

Significance of rewards and incentives

Purpose of promotions

Concept of 360 degree Appraisal

Performance appraisal has been arranged by HRM time to time on the yearly or half yearly basis to review the performance of an employee towards the organization. About the performance appraisal MBA book MB 0027 writes, “Performance evaluation is the personnel activity by means of which the enterprise determines the extent to which the employee is performance the job effectively.”

Techniques of Evaluation

Evaluation techniques depend on a particular organization because every organization has their own evolution techniques.

But normally evaluation methods have been divided into three parts:

Individual evolution methods

Multiple-person evaluation methods

Other methods

In the individual evolution methods there can be some aspects to evaluate which can be:

Graphic rating scale – normally it contain (0-9) scale to rate a person scores.

Forced choice – Forced choice can be by superiors, peers, subordinates, or a combination of these in evaluating employees.

Easy Evolution – In the evolution system some questions has been asked by evaluator strong and weak aspects of the employee’s behaviour.

Management by Objectives – It is known as MBO and in the system the supervisor and employee to be evaluated jointly set objectives in advance for the employee to try to achieve during a specified period.

Critical Incident technique – In this technique, personnel specialists and operating managers prepare lists of statements of very effective and very ineffective behaviour for an employee.

Checklists and weighted checklists – In the process you have to check out some question on the understanding of your answers.

Behaviorally anchored rating scales – It is known as BARS.

In the multiple-person evaluation methods there are also some techniques occurs:

Ranking – in the method the evaluator is asked to rate employees from highest to lowest on same overall criterion.

Paired comparison – this approach makes the ranking method easier and more reliable.

Forced distribution – It is similar to grading on a curve.

In the other methods we can include performance tests, fixed review techniques etc.

Appraisal, Praise or Recognition

About the praise, “Praise seems to have its greatest value when given and received as recognition, and is not perceived by either party as an attempt to control the behaviour of the recipient.”

Recognition satisfies human need for esteem by others and for self-esteem.

About the Rewards and Incentives Burack and Smith says, “An incentive scheme is a plan or programme to motivate individual or group performance. An incentive programme is most frequently built on monetary rewards (incentive Ray or a monetary bonus), but may also include a variety of non-monetary rewards or prizes.”

Incentives and rewards always attract the employee attraction towards the work and give them satisfaction to the organization.


According to the MBA book MB 0027 promotion is, “a term which covers a change and calls for greater responsibilities, and usually involves higher pay and better terms and conditions of service and, therefore, a higher status of rank.”

360 Degree Appraisal

These terms (360-degree, full circle, etc.) mean using the variety of sources that provide the best picture of performance. Therefore, for example, an agency may use supervisor, self and customer input to supplement the rating official’s appraisal in one division’s program. Another division of the same agency with “self-directed teams” may use peer, self and subordinate ratings to obtain the most useful input.

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