1
The World of Pay and The World of Pay and CompensationCompensation
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 The Compensation ProgramProgram
Base Wages and SalariesAfter-tax amount on the paycheck
Wage and Salary Add-onsPremiums an Differentials
Incentive PaymentsPayment for specified outputs
Benefits and ServicesRetirement, Savings, Medical, (39% of payroll)
3
Reasons for the Differences in Pay and Compensation for Different
Employees
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
Factors That Determine Rates of Pay
4
Average Hourly Earnings Average Hourly Earnings November 1995November 1995
Specified Production WorkersSpecified Production Workers
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
Lowest Paid
Average Hourly Earnings Average Hourly Earnings November 1995November 1995
Specified Production WorkersSpecified Production Workers
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
Highest Paid
6
Hourly Rates (1994) for Hourly Rates (1994) for Production WorkersProduction Workers
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
7
Reasons For The Differences In Pay And Compensation For Different
Employees
Supply and Demand of Labor
Profitability of the Firm
Employment Stability
Gender Difference
Employee Tenure and Performance
Other Factors That Determine Rates Of Pay
8
A World in TransitionA 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
Top Related