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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.

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