Chapter 19 of Human Resource Management in a Business Context (2nd Edition 2004) by Alan Price - published by Thomson Learning

Contents

Objectives
The purpose of this chapter is to:
- Investigate the relationship between the human resource function and payroll administration
- Outline the rationale behind different compensation packages
- Evaluate the link between pay and performance
Pay and compensation

HR and payroll administration

Technology and the pay unit

Pay evaluation

Market-driven criteria

Motivation and performance

Pay and performance

Flavour of the (last) month?

Criticisms of PRP

Summary
Pay is a key element in the management of people. The importance of pay begins with pay administration that deals accurately and swiftly with payroll-related matters. Much of the information used by pay administrators is shared with the human resource function. Pay evaluation systems also impinge on human resource territory. Free market organizations are particularly concerned with performance-related pay as a motivating factor but this trend appears to be ideological rather than rational since practical PRP schemes that deliver the results intended are extremely difficult to construct. Current evidence shows that performance pay is likely to demotivate more people than it motivates.
Further reading
Ian Kessler's article on 'Reward system choices', in J. Storey (ed.) Human Resource Management: A Critical Text, 2nd edition (published by Thomson Learning, 2001) provides an in-depth theoretical analysis of recent research and practice. The Compensation Handbook edited by Lance A. Berger and Dorothy R. Berger (published by McGraw-Hill, 1999) is a compendium of articles on compensation strategy and design. Compensation by George T. Milkovich, Jerry M. Newman, and Carolyn Milkovich, 7th edition (published by McGraw-Hill, 2001) includes exercises and in-depth discussion. Work and Pay in Japan by Robert A. Hart and Seiichi Kawasaki (published by Cambridge University Press, 1999) provides detailed information on an atypical reward system.
Review questions

Problem for discussion and analysis
> Chapter 18 > Chapter 20

Human Resource Management
in a Business Context
2nd Edition 2004

by Alan Price
Published by
Thomson Learning
ISBN 186152966X

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