Compensation Management Variable Pay Plans By Jasmin Tuapin

Compensation Management: Variable Pay Plans By Jasmin Tuapin

Learning Objectives By the end of the class, the students will be able to: 1. Discuss how compensation motivates performance. 2. Differentiate the types of variable pay plans. 3. Identify the advantages and disadvantages of each variable pay plan. 4. Design a pay structure that would help meet the organizational goals. 5. Evaluate whether a pay plan is appropriate for the company in a certain industry.

Pay Structure • Pay structure is a method of administering pay. It helps answer the question why people are compensated differently. • The salary rate may be fixed, variable, or fixed plus variable

Variable Pay Plans Variable pay plans are used to motivate the desired behaviors in an organization

Group Activity: Jigsaw

Evaluation

Question 1 Differentiate profit-sharing and piece-rate pay.

Question 2 Give one good behavior that profit-sharing can encourage.

Question 3 Which of the variable pay plans is more applicable to an educational institution? Justify your answer.

Question 4 Which of the variable pay plans is not applicable to an educational institution? Justify your answer.

Question 5 If you want to encourage the faculty to publish more research journals, which variable pay plan, do you think, would motivate them to do so? Explain your answer.

Maraming Salamat. Thank you.