Unit 13
Adapted from Nelson
1.
2.
3.
4.
5.
6.
Identify the key issues in preparing to
implement a compensationsystem.
Develop an implementation plan for a new
compensation system and the steps
involved.
Develop a process for communicating the
compensation system.
Explain how to evaluate the effectiveness of
a compensation system.
Identify circumstances that may necessitate
changes to the compensation system.
Discuss the issues to be considered in
adapting the compensation system
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1.
reparing the Compensation Budget
,anning for Compensation Administration: documenting the
2.
3.
4.
compensation system; administering the comp system, assigning
responsibilities and planning the infrastructure, & communicating comp info
lanning for Information Technology
rganizing for Compensation Administration
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1.
2.
3.
4.
a) Computers
b) Job Documentation and Evaluation
c) Labour Market DataBudget
Analysis
reparing the Compensation
d) Communication
e) Information Collection
f) Pay and Remittance Calculation
g) Record-Keeping Administration
lanning for Compensation
h) Compensation Planning and Research
i) Privacy and Legal Issues
lanning for Information Technology
rganizing for Compensation Administration
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Step 1
stablish the Implementation Task Forces
Step 2
5t the Infrastructure into Place
Step 3
%st the System
Step 4
ïnduct the Training
Step 5
ïmmunicate Information on the System
Step 6
!unch and Adjust the System
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1
2
3
mpact on Compensation Objectives
mpact on Compensation Costs
mpact on Employee Behaviours and
Attitudes
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1
2
3
mpact on Compensation Objectives
initial dip:
a tendency
mpact on Compensation
Costsfor
performance to decline
during the initial stages
of any changeand
mpact on Employee Behaviours
Attitudes
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1
2
mpact on Compensation Objectives
mpact on Compensation Costs
compensation cost ratio:
the ratio of total compensation costs to
total costs Behaviours
or to revenues
mpact on Employee
and
3
Attitudes
average employee earnings:
total compensation divided by the
number of full-time equivalent
employees
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1
2
3
?Membership Behaviour
mpact on Compensation
Objectives
?Task Behaviour
?Citizenship Behaviour
?Job Attitudes
?Compensation
mpact on Compensation
CostsAttitudes
mpact on Employee Behaviours and
Attitudes
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? Why is it useful to conduct surveys of key
employee attitudes before system
implementation?
a. To provide information about the new
system
b. To provide a baseline for future
comparisons
c. To solicit recommendations for change
d. To create perception of employee
involvement
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Legislative and
Tax
Socioeconomic
Changes
External
Circumstances
Labour Market
Competitive
Environment
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Work Force
Managerial
Strategy
Financial
Circumstances
Scope of
Organization
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? For information about the full requirements of the
Personal Information Protection and Electronic
Documents Act and how to comply, go to the
Office of the Privacy Commissioner of Canada at
? https://www.priv.gc.ca/en/
? The Canadian Institute provides a website with
information on practical ways to comply with
privacy legislation at
? https://www.canadianinstitute.com/privacy-datasecurity-compliance-forum/
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1. Why is compensation communication such
an important aspect of an effective
compensation system?
2. What issues should you consider when
deciding whether to outsource
compensation functions?
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? Form small groups.
? Each member of the group should check with
a current or previous employer (or some
other employer if this is not convenient) to
determine whether the organization is
outsourcing some or all of its compensation
administration.
? Is the company happy with the current
system? Why or why not?
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