Chapter 12 – Human Resource Management
12-28
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exercise in problem solving and solution
finding, not criticizing.
o Express confidence in a subordinate’s
ability to improve.
o Provide performance feedback both
formally and informally.
o Praise instances of high performance and
areas of a job in which a worker excels.
o Avoid personal criticisms and treat
subordinates with respect.
o Agree to a timetable for performance
improvements.
VI. PAY AND BENEFITS
• Pay includes employees’ base salaries, pay raises, and
bonuses. It is determined by a number of factors,
including characteristics of the organization and of the
job and levels of performance.
• Employee benefits are based on membership in an
organization. They include sick days, vacation days,
medical, and life insurance.
A. Pay Level
• Pay level is a broad comparative concept that
refers to how an organization’s pay incentives
compare, in general, with those of other
organizations in the same industry employing
similar kinds of workers.
• Managers must decide whether they want to offer
relatively high, average, or low wages. High
wages help ensure that the organization will be
able to recruit, select, and retain high performers,
but high wages also raise costs.
• Low wages give an organization a cost advantage
but may undermine the organization’s ability to
select and recruit high performers and to motivate
current employees to perform at a high level.
• In determining pay levels, managers should take
LO12-5: Explain the issues
managers face in determining levels
of pay and benefits.
TEXT REFERENCE
MANAGEMENT INSIGHT
Treating Employees Well Leads to
Satisfied Customers
In an industry in which annual
turnover rates are relatively high, the
Four Seasons’ voluntary turnover is
around 10%.
iii
Evidently, employees
and customers alike are very satisfied
with the way they are treated at the
Four Seasons. As the Four Seasons’
founder, chairman of the board, and
CEO, Isadore Sharp suggests, “How
you treat your employees is how you
expect them to treat the customer.”
iv
Salaries are relatively high at the Four
Seasons by industry standards (i.e.,
between the 75
th
and 90
th
percentiles);
employees participate in a profit
sharing plan; and the company