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Compensation
A Balanced Approach

First Edition
Other Titles in:
Human Resource Management
January 2025 | 424 pages | SAGE Publications, Inc
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Compensation: A Balanced Approach covers compensation systems and practices through theory and application. Each chapter looks at compensation from both the employer and employee perspective, giving students a more holistic understanding of the role total rewards play in an organization. Authors Beverly J. DeMarr, Vicki Fairbanks Taylor, and Claudia J. Ferrante help students develop the ability to think critically and ethically about compensation decisions and their effects on both employers and employees.
 
Preface
 
Acknowledgements
 
About the Authors
 
1. Total Compensation
Nature Of The Employment Relationship

 
Perspectives On The Importance Of Compensation

 
From Total Compensation To Total Rewards

 
Worldatwork Total Rewards Model

 
The Unintended Consequences Of Pay

 
Ongoing Challenges: Pay Equity

 
Overview Of The Book

 
Summary

 
Key Terms

 
Discussion Questions

 
 
2. Laws Affecting Compensation
Fair Labor Standards Act

 
Prevailing Wage Laws

 
Anti-Discrimination Laws

 
Legal Compliance

 
Summary

 
Key Terms

 
Discussion Questions

 
 
3. Compensation Strategy and Objectives
Shifting Focus From Shareholders To Stakeholders

 
Types And Levels Of Strategies

 
Using Compensation Strategically

 
Compensation Objectives

 
Influences On Compensation Strategy

 
The Impact Of Compensation Strategy On Behavior

 
Matching Compensation Strategy To The Organization’s Business Strategy

 
Compensation As A Competitive Advantage

 
Summary

 
Key Terms

 
Discussion Questions

 
 
4. Bases of Pay, Variations, and Differentials
Pay Structures: Defining The Value Of Jobs

 
Human Capital Theory: Determining The Value Of Employees

 
Job-Based Pay

 
Person-Based Pay

 
Variations On Job- And Person-Based Pay

 
Compensating Differentials

 
Efficiency Wage Theory

 
Sorting And Motivational Effects Of Differentials And Bases Of Pay

 
Reservation Wage

 
Summary

 
Key Terms

 
Discussion Questions

 
 
5. Establishing an Internally Equitable Compensation System
Internal Equity

 
Job Analysis

 
Competency Modeling: An Alternative to Traditional Job Analysis

 
Job Evaluation: Determining The Relative Value Of Jobs Within An Organization

 
Alternatives To Job Evaluation

 
The Role Of Ai In Creating An Internally Equitable Compensation System

 
Market Pricing

 
Summary

 
Key Terms

 
Discussion Questions

 
 
6. External Equity And Designing A Market-Competitive Pay Structure
Creating A Market-Competitive Pay Structure

 
Analyzing External And Internal Factors Influencing A Market-Competitive Pay Structure

 
Determining The Competitive Pay Policy

 
Collecting Market Data

 
Integrating The Internal Job Structure With The External Market Data

 
Establishing Pay Grades And Pay Ranges

 
Multiple Salary Structures

 
Market-Based Pay Structure: An Alternative To A Market-Competitive Pay Structure

 
Summary

 
Key Terms

 
Discussion Questions

 
 
7. Rewarding Individual Performance
Motivating Employees Through Incentives

 
Measuring Performance

 
Performance Appraisal Methods

 
Merit Pay

 
Bonuses

 
Commission

 
Piecework

 
Standard Hour Plans

 
Summary

 
Key Terms

 
Discussion Questions

 
 
8. Rewarding Group Performance
Types Of Groups

 
Measuring Group Performance

 
Challenges In Rewarding Group Performance

 
Types Of Rewards

 
Gainsharing Plans

 
Profit Sharing

 
Incentive Stock Options

 
Employee Stock Ownership Plans

 
Nonfinancial Group Incentives

 
Summary

 
Key Terms

 
Discussion Questions

 
 
9. Legally Required Benefits
Legally Required Employee Benefits

 
Social Security

 
Unemployment Compensation

 
Workers’ Compensation

 
Family And Medical Leave Act (FMLA)

 
Uniformed Services Employment And Reemployment Rights Act (USERRA)

 
Patient Protection And Affordable Care Act (ACA)

 
Additional Legal Requirements

 
Summary

 
Key Terms

 
Discussion Questions

 
 
10. Voluntary Benefits
Legal Requirements

 
Employer-Sponsored Retirement Plans

 
Health Insurance Alternatives

 
Paid Time Off

 
Other Miscellaneous Benefits

 
The Importance Of A Needs Assessment

 
Flexible Benefits/Cafeteria Plans

 
Managing The System

 
Summary

 
Key Terms

 
Discussion Questions

 
 
11. Compensation of Special Groups
Sales

 
Supervisors

 
Contingent Workers

 
Directors

 
Executives

 
Unionized Workers

 
Two-Tier Pay Plans

 
Part-Time

 
Summary

 
Key Terms

 
Discussion Questions

 
 
12. International Compensation
Data Sources

 
National Differences And Requirements

 
Categories Of International Workers

 
Expatriate Pay And Benefits

 
Cost Containment

 
Repatriation

 
International Assignments: Pros And Cons

 
Summary

 
Key Terms

 
Discussion Questions

 
 
13. Compensation System Administration
Managing Compensation Communication

 
Pay Transparency

 
Addressing Employee Fairness Concerns

 
Managing Compensation Costs

 
Evaluating Effectiveness: Audits, Metrics, And Employee Feedback

 
From Metrics to Analytics

 
Managing Change

 
Summary

 
Key Terms

 
Discussion Questions

 
 
14. Compensation in Context: Putting It All Together
Putting The Pieces Together

 
Careers In Compensation

 
The Future Of Compensation

 
Work-Life Balance

 
Making It Personal

 
Summary

 
Key Terms

 
Discussion Questions

 
 
Appendix: Responsible Furniture Industries, Inc. (RFI)

The textbook offers a comprehensive view on Compensation systems that is unparalleled in the current market. Human motivation, the Pay Model process, and policy structures are interwoven into the complex fabric of Compensation in an expert fashion. Plus, a comprehensive case study offers students a concrete example of how these concepts contribute to this nuanced function in Human Resources Management.

Dr. Edward De La Torre, Ed.D
California State University, Fullerton

This textbook offers a practical review of compensation and its components. Not only does it touch on the employer but also provides information for the employee. The exercises and case studies assist in facilitation of the course and compensation concepts.

Shari Benson MA, SPHR, SHRM-SCP
University of LaVerne

Sample Materials & Chapters

Chapter 1 & 2

Beverly J. DeMarr

Beverly J. DeMarr is a Professor of Management at Ferris State University where she regularly teaches classes in Compensation, Human Resources, and Negotiations. She received her Ph.D. in Organizational Behavior/Human Resource Management and Master of Labor and Industrial Relations from Michigan State University, MBA from Grand Valley State University, and BSBA from Aquinas College. Her publications include Negotiation and Dispute Resolution 2e (DeMarr & de Janasz, 2019) and Human Resource Management 5e, (Gowan, DeMarr, & David, 2023), as well as articles in Personnel Psychology, Journal of Business Ethics, Human Relations, Public... More About Author

Vicki Taylor

Vicki Fairbanks Taylor is an Associate Professor of Management at Shippensburg University of Pennsylvania, where she regularly teaches classes in Human Resources, Leadership, and Compensation. She earned her Ph.D. in Human Resource Management from Temple University, a Master's in Labor and Industrial Relations from St. Francis University, and a BSBA from Shippensburg University. Dr. Taylor published Experiential Exercises in the Classroom (Foster, Taylor, & Walker, 2021) in addition to numerous teaching-related articles and exercises. In 2021, she received the Best Pedagogical Contribution Award for an article published in Management... More About Author

Claudia J. Ferrante

Claudia J. Ferrante is a Professor of Management at the United States Air Force Academy where she regularly teaches classes in Organizational Behavior, Human Resource Management, and Management Consulting. She earned her B.S. in Biology from Bucknell University, MBA and Master of Health Administration from the University of Pittsburgh, and Master of Public Policy and Management and Ph.D. in Organizational Behavior from Carnegie Mellon University. Her publications include book chapters in The Economics of Aquatic Sports and Educating for Values-Driven Leadership Across the Curriculum, as well as numerous articles in journals such as Human... More About Author

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ISBN: 9781071948590
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