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EMBA Strategic Reward Systems

EMBA Strategic Reward Systems

David Allen

on 15 September 2012

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Transcript of EMBA Strategic Reward Systems

EMBA Strategic Reward Systems David G. Allen, Ph.D., SPHR
Distinguished Professor
Department of Management
Fogelman College of Business
University of Memphis
dallen@memphis.edu Reward System Objectives

Attract talent
Retain talent
Manage costs
Legal compliance Key Strategic Issues

Linking rward systems to strategy
Relative importance of internal / external forces
Relative mix of fixed / variable rewards
Relative mix of types of rewards
Pay secrecy
Globalization UM Men's Head Basketball Coach
Josh Pastner: >1M/year

UM Women's Head Basketball Coach
Melissa McFerrin: ~180k/year Rewarding A while hoping for B Vertical and horizontal strategic alignment Development of an ORganizational Pay Structure External Forces

Labor markets
Government Regulation Internal Forces

Business Strategy
HR Strategy
Management Philosophy
Job Types
Productivity Wage and Salary Surveys
Pay Level Policy
Match Job Evaluation
Key Jobs
Pay Grades
Pay Ranges Broadbanding Wage Compression Dulebohn & Werling 2007 HRMR

Compensation through the 1990s

Bureaucratic employment relationships -- JOB
Long term attachment
Firm specific skills and limited mobility
Defined contribution retirement plans
Emphasis on Internal Labor Markets

Compensation 1980 to present

Changing employment relationship
less emphasis on job security
widespread downsizing / restructuring
increasing use of short term employment forms
Shift to idiosyncratic employment relationships -- INDIVIDUAL
Shift to defined contribution benefit plans
Increasing emphasis on External Market Forces Mix of Fixed and Variable Rewards

Base Pay
Merit Pay
Incentive Pay
Profit Sharing
Executive Compensation Level of Analysis Executive Compensation
Ratio of CEO Comp to Average Worker Salary
1980: 42-1
2000: 535-1
2006: 364-1 What goes into executive compensation?
What is the role of stock options?
What do Kaplan, Bogle, Walsh (AMP) think?
What do YOU think? Mix of Types of Rewards

Extrinsic (e.g. bonus)
INtrinsic (e.g. recognition, work environment)

Direct (e.g. pay)
Indirect (e.g. benefits) Key Strategic Benefits Choices

Relative contributions -- who pays?
Health care costs
Defined benefit and defined contribution retirement plans Cafeteria Plans
Full transcript