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Part 4: Compensating Human Resources

Chapter 11: Variable Pay and Executive Compensation

Prepared by Linda Eligh, University of Western Ontario

Copyright © 2008 by Nelson, a division of Thomson Canada Limited.

11–1

Learning Objectives
After you have read this chapter, you should be able to:
1. 2. 3. 4. 5. 6. Define variable pay and identify three elements of successful pay-for-performance plans. Discuss three types of individual incentives. Explain three ways that sales employees are typically compensated. Identify key concerns that must be addressed when designing group/team variable pay plans. Discuss why profit sharing and employee stock ownership are common organizational incentive plans. Identify the components of executive compensation and discuss criticisms of executive compensation levels.

Copyright © 2008 by Nelson, a division of Thomson Canada Limited.

11–2

Variable Pay: Incentives for Performance
• Variable Pay
 Compensation linked to individual, group/team, and/or organizational performance.

• Basic assumptions:
 Some jobs contribute more to organizational success than others.  Some people perform better and are more productive than others.  Employees who perform better should receive more compensation.  Some of employees’ total compensation should be tied directly to performance.
Copyright © 2008 by Nelson, a division of Thomson Canada Limited. 11–3

Developing Successful Pay-for-Performance Plans
• Reasons for Adopting Pay or Incentive Plans:
 Link more directly strategic business goals and employee performance.  Enhance organizational results and reward employees financially for their contributions.
 Reward employees to recognize different levels of employee performance.  Achieve HR objectives, such as increasing retention, reducing turnover, recognizing training, or rewarding safety and attendance.

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...‫ﺠﺎﻤﻌﺔ ﺍﻟﺩﻭل ﺍﻟﻌﺭﺒﻴﺔ‬ ‫ﺍﻟﻤﻨﻅﻤﺔ ﺍﻟﻌﺭﺒﻴﺔ ﻟﻠﺘﺭﺒﻴﺔ ﻭﺍﻟﺜﻘﺎﻓﺔ ﻭﺍﻟﻌﻠﻭﻡ‬ ‫ﻤﻌﻬﺩ ﺍﻟﺒﺤﻭﺙ ﻭﺍﻟﺩﺭﺍﺴﺎﺕ ﺍﻟﻌﺭﺒﻴﺔ‬ ‫ﻗﺴﻡ ﺍﻟﺩﺭﺍﺴﺎﺕ ﺍﻹﻋﻼﻤﻴﺔ‬ ‫دور ﺸﺒﻜﺎﺕ ﺍﻟﺘﻭﺍﺼل ﺍﻻﺠﺘﻤﺎﻋﻲ ﻓﻲ ﺘﻨﻤﻴﺔ ﻤﺸﺎﺭﻜﺔ ﺍﻟﺸﺒﺎﺏ‬ ‫ﺍﻟﻔﻠﺴﻁﻴﻨﻲ ﻓﻲ ﺍﻟﻘﻀﺎﻴﺎ ﺍﻟﻤﺠﺘﻤﻌﻴﺔ‬ ‫دراﺳﺔ ﻤﻘﺩﻤﺔ ﻟﻨﻴل ﺩﺭﺠﺔ ﺍﻟﻤﺎﺠــﺴﺘﻴﺭ ﻤﻥ ﻗﺴﻡ ﺍﻟﺒﺤﻭﺙ ﻭﺍﻟﺩﺭﺍﺴــﺎﺕ ﺍﻹﻋﻼﻤﻴﺔ‬ ‫إﻋﺪاد ﺍﻟﻁﺎﻟﺏ‬ ‫أﺣﻤــﺪ ﯾــﻮﻧﺲ ﻣــﺤﻤﺪ ﺣـــﻤﻮدة‬ ‫إﺷﺮاف ﺍﻷﺴﺘﺎﺫ ﺍﻟﺩﻜﺘﻭﺭ‬ ‫ﺣﺴـــﻦ ﻋﻤــﺎﺩ ﻤــﻜــﺎﻭﻱ‬ ‫ﻋﻤﻴﺩ ﻜــﻠـﻴﺔ ﺍﻹﻋـﻼﻡ ﺒﺠﺎﻤﻌﺔ ﺍﻟﻘـﺎﻫــﺭﺓ‬ ‫اﻟﻘـﺎھﺮة‬ ‫ﺩﻴﺴﻤﺒﺭ ٣١٠٢‬ ‫ﻴﻢ‬‫ﻠ‬‫ﻠْﻢٍ ﻋ‬‫ﻱ ﻋ‬‫َ َﻮْ َ ﻛُﻞﱢ ﺫ‬ ‫وﻓ ق‬  {}‫ﺳﻮرة‬ ‫ﺍﻹﻫﺪﺍﺀ . .‬ ‫ﺇﻟﻴﻜ‪‬ـ ﻳﺎ ﻣﻨﺒﻊ ﺍﻷﻣﻞ ﺍﻟﺼﺎﰲ ﺍﳊﻨﻮﻥ ... ﻭﺍﻷﻣﻞ ﺍﳌﺸﺮﻕ ﺍﻟﺬﻱ ﻻ ﻳﻐﻴﺐ ﺿﻮﺀﻩ ﻛﺎﻟﺸﻤﺲ ﻭﺍﻟﻘﻤﺮ.‬ ‫ﺇﻟﻴﻜـِـ ﺃﻫﺪﻱ ﻋﺒﺎﺭﺍﰐ... ﻭﺭﺳﺎﻟﱵ ... ﻭﺃﺯﻛﻰ ﲢﻴﺎﰐ... ﻭﺍﻟﺪﰐ ﺍﻟﻌﺰﻳﺰﺓ .‬ ‫ﺇﻟﻴﻜﹶـ ﻳﺎ ﻣﻦ ﻏﻤﺮﺗﲏ ﺑﻌﻄﻔﻚ ﻭﺣﻨﺎﻧﻚ ﻭﺯﺭﻋﺖ ﺑﻨﻔﺴﻲ ﺣﺐ ﺍﳋﲑ.‬ ‫ﺇﻟﻴﻜﹶــ ﺃﻫﺪﻱ ﺣﱯ ﻭ ﻗﻠﻤﻲ.. ﻭﺭﺳﺎﻟﱵ.. ﻭﺟﻬﺪﻱ ﻭﻋﻤﺮﻱ ... ﻭﺍﻟﺪﻱ ﺍﻟﻌﺰﻳﺰ.‬ ‫ﺇﱃ ﺯﻭﺟﱵ ﺷـﲑﺍﺯ ،،، ﻭﻣﻬﺠﺘــﺎ ﻗﻠـﱯ‬ ‫" ﺭﳝــﺎﺱ ﻭ ﻣــــﺎﺭﻳـــﺎ " .‬ ‫ﺇﱃ ... ﺷـﻤﻮﻉﹴ ﺃﺿـــﺎﺀﺕ ﻟــﻲ ﺩﺭﰊ ، ﺇﺧـــﻮﺍﱐ ﻭﺃﺧـــﻮﺍﰐ.‬ ‫ﺇﱃ ... ﻛﺎﻓﺔ ﺯﻣﻼﺀ ﺍﻟﺪﺭﺍﺳﺔ ﰲ ﳎﺎﻝ ﺍﻹﻋﻼﻡ ﻭﻣﻦ ﺳﺒﻘﺘﻨﺎ ﺇﱃ ﺭﲪﺘﻪ ﺗﻌﺎﱃ‬ ‫ﺇﱃ ﻭﻃﲏ ﻓﻠﺴﻄﲔ ...... ﺃﺭﺿﺎ ﻭﺷﻌﺒﺎﹰ‬ ‫ﺃﻫﺪﻱ ﳍﻢ ﲨﻴﻌﺎً ﻫﺬﺍ ﺍﳉﻬﺪ ﺍﳌﺘﻮﺍﺿﻊ‬ ‫ﺷﻜﺮ ﻭﺗﻘﺪﻳﺮ‬ ‫}ﺭ ﹺ ﺃَﻭ ﹺﻋ ‪‬ﻲ ًﻥ ﺃﺸﹾ ﹸ ‪ ‬ﻌ‪ ‬ﺘﹶ ‪ ‬ﺍﻟ ‪‬ﻲ ﺃﻨـ ‪‬ﻤ‪‬ﺕ ‪‬ﻠﻲ ‪ ‬ﻠﻰ ﻭﺍﻟ ‪‬ﻱ ﻭﺃﻥ‪ ‬ﺃﻋﻤل ﺼـﺎﻟﺤ ﹰ ﺘﺭﻀـﺎﻩ‬ ‫ﺎ‬ ‫ﺩ‬ ‫ﻌ ﻋ ﻭﻋ‬ ‫ﻜﺭ ﻨ ﻤ ﻙ ﺘ‬ ‫ﺏ ﺯ ﻨ ﺃ‬ ‫ﻭﺃْﺩﺨﻠﹾﻨﻲ ﹺﺭﺤﻤ‪   ‬ﻲ ‪‬ﺒﺎﺩ ‪ ‬ﺍﻟـ ‪‬ﺎِﺤﻴﻥ {‬ ‫ﺒ ﺘﻙ ﻓ ﻋ ﻙ ﺼ ﻟ‬ ‫ﺍﻟﻨﻤل ﺃﻴﺔ ٩١ .‬ ‫ﺍﻟﺤﻤﺩ ﷲ ﺍﻟﻜﺭﻴﻡ ﺍﻟﻤﻨﺎﻥ ﺍﻟﺭﺤﻴﻡ ﺍﻟﺭﺤﻤﻥ ﺍﻟﺫﻱ ﺨﻠﻕ ﺍﻹﻨﺴﺎﻥ ﻭﻋﻠﻤﻪ ﺍﻟﺒﻴﺎﻥ ﻭﺍﻨﻁﻕ ﻟﺴﺎﻨﻪ ﺒﺂﻱ ﺍﻟﺫﻜﺭ‬ ‫ﻭﺍﻟﻘﺭﺁﻥ ، ﻭﺍﺼﻠﻲ ﻭﺍﺴﻠﻡ ﻋﻠﻲ ﻤﺒﻌﻭﺙ...

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