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The World of Pay and Compensation

The World of Pay and Compensation. Seventy percent (70%) of all jobs in the USA are in the service sector. Service-sector jobs tend to be labor intense. Service-sector companies typically spend 40 to 80 cents of each revenue dollar on employee compensation.

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The World of Pay and Compensation

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  1. The World of Pay and Compensation • Seventy percent (70%) of all jobs in the USA are in the service sector. • Service-sector jobs tend to be labor intense. • Service-sector companies typically spend 40 to 80 cents of each revenue dollar on employee compensation. • Wage competition in service-sector companies tends to be more intense.

  2. The Compensation Program • Base Wages and Salaries After-tax amount on the paycheck • Wage and Salary Add-ons Premiums an Differentials • Incentive Payments Payment for specified outputs • Benefits and Services Retirement, Savings, Medical, (39% of payroll)

  3. Kinds and Levels of Required Skills Kind of Business Union and Nonunion Status Capital Vs. Labor Intense Industries Size of Business Philosophy of Management Total Compensation Package Geographic Location Reasons for the Differences in Pay and Compensation for Different Employees Factors That Determine Rates of Pay

  4. Eating and Drinking Places Apparel and Accessory Stores General Merchandise Stores Apparel and Other Textile Products Food Stores Leather and Leather Products Misc. Retail Establishments Amusement and Recreation Building Materials and Garden Textile Mill Products $5.65 7.54 7.60 7.77 8.25 8.26 8.52 9.02 9.26 9.49 Average Hourly Earnings November 1995Specified Production Workers Lowest Paid

  5. PIPELINE except NATURAL GAS PETROLEUM and COAL PRODUCTS TOBACCO PRODUCTS COAL MINING ELECTRIC, GAS, and SANITARY SERVICES METAL MINING TRANSPORTATION EQUIPMENT LEGAL SERVICES COMMUNICATIONS CHEMICAL and ALLIED PRODUCTS $20.26 19.68 18.49 18.43 18.04 16.94 16.65 16.37 15.90 15.85 Average Hourly Earnings November 1995Specified Production Workers Highest Paid

  6. Five Highest 1) Michigan $ 16.40 2) Ohio 14.53 3) Delaware 14.08 4) Indiana 13.90 5) Connecticut 13.82 Five Lowest 50) S.Dakota $ 9.51 49) Mississippi 9.90 48) S.Carolina 10.21 47) Arkansas 10.23 46) N.Carolina 10.67 Hourly Rates (1994) for Production Workers

  7. Supply and Demand of Labor Profitability of the Firm Employment Stability Gender Difference Employee Tenure and Performance Other Factors That Determine Rates Of Pay Reasons For The Differences In Pay And Compensation For Different Employees

  8. A World in Transition • More Intense Global Competition • Slower Growth • More Rapid Change • Reordering of Traditional Businesses • Organizational Restructuring • Deregulation, Takeovers, and Mergers • Wage Depression and Revenue Escalation

  9. Global Variations In Compensation Practices • Direct Compensation • Tax System • Social Security • Benefit Entitlements • Regulatory Environment • Employment Law

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