HRM3705 LATEST EXAM PACK 2025(Remuneration Management)

HRM3705 LATEST EXAM PACK 2025

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12/11/2009




COMPENSATION MANAGEMENT



CHAPTER 1 (Study unit 1)
THE PAY MODEL


1




Chapter Topics


• Compensation: Definition

• Forms of Pay

• A Pay Model

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12/11/2009




Learning Objectives

After studying Chapter 1, students should be able to:
• Explain how perceptions of compensation differ among society, stockholders,
managers and employees.
• Discuss the difference between cash compensation (direct compensation) and
benefits (indirect compensation) and define each of the direct and indirect forms of
compensation.
• Explain how the employment relationship combines both transactional and relational
returns to form an implicit contract between employers and employees.
• Identify and describe the three main components of a pay model.
• Understand how the pay model integrates objectives, policies, and techniques into a
compensation system.
• Distinguish empirical research from surveys and opinions.



3




Key Questions and Issues

• How differing perspectives affect our views of compensation

• Definition of compensation

– The meaning of compensation most appropriate from an employee's
view: return, reward, or entitlement

• Examining “network of returns” a college offers an instructor

, lOMoARcPSD|31863004




12/11/2009




Contrasting Perspectives of Compensation


Society’s Stockholders’
Views Views




Employees’ Managers’
Views Views

5




Compensation: Definition
• Society
– Pay as a measure of justice
– Benefits as a reflection of justice in society
– Job
Joblosses
losses(or
(orgains)
gains)attributed
attributedtotodifferences
differencesinincompensation
compensation
– Belief that pay increases lead to price increases
• Stockholders