pay for 3ps-overall concept
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7/31/2019 Pay for 3Ps-Overall Concept
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Pays for 3Ps
Overall Concept
7/31/2019 Pay for 3Ps-Overall Concept
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Pay for 3Ps – Overall Concept
Session Objectives:
To be able to describe why and how the pay for 3Psconcept is applied.
To be able to list the advantages of the concept.
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Integrated Human Resource
Management
PositionClarification
Objective Setting
Compensation
Person Development
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Pay for Position
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To recognize the fulfillment of a position’s permanentobjectives based on Position Evaluation
A reference salary within the grading structure of thecompany
Pay for Position
os t on-re ate ene ts c ear y n e to gra es
Related to the cost of the organization chart
What pay policy is compared with the market
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Pay for Position
Reference Salary10 grades – 10 salaries
$
Define the most economical salary scale yet still stay competitiveEstablish the least possible salary increase in the salary scale
Grade
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Pay for Position
First refers to the Position Evaluation, by showing thecompany grade
Shows the Monthly Base Salary corresponding to thisgrade, and the fixed bonus to which the employee isentitled (or the number of months over which the
emp oyees s pa year y. Shows the value of any non-cash item provided to the
employee as a position – based benefit or perquisite.
Finally shows the total Pay for Position paid to the
employee (cash or non cash amount).
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Pay for Person
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Pay for Person
To recognize the specific personal aspects
Competencies differential between Person and Position
Market Pressure
Seniority
Specific technical or licensing requirements
place Distance between home and working place
Employee Status (Expatriate, international assignee
Family Status Working conditions (hardship)
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Pay for Person
Competencies Ratio: the person’s competency level compared with his /her position,conducted through Competencies Profiling
Market Pressure Ratio: Market pressure weighting on some particular competencies
or qualifications, conducted through compensation and benefits surveys, and used todetermine a possible market premium.
Seniority: The employee’s seniority through number of years in the position
to operate in his her position, and used to determine a possible position allowance.
Work site: Evaluation of the discomfort brought by the obligation to work far from themain office and or far from home, and or far from the shore and used to determinepossible position evaluation.
QOL Index: Evaluation of the quality of living differential between the home city andthe host city
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Pay for Person: Market Differential
ReferenceSalary
5% of population$
Establish a market differential rate for each individual
concernedApply only the salary scale increase and change (up ordown) the market differential based on changes in marketconditions
Grade
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Pay for Performance
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Pay for Performance
•To recognize the contribution to the organizationresults
•Based on Performance Evaluation
•Short or long term incentives
•Non cash rewards
•Related to business results
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Types of Performance Pay
Bonus
Individual – group – company
Incentives
Executive incentives
–
Rank and file incentives
Productivity –based pay target – based pay
Sales force incentives
Financial schemes
Share ownership – phantom tock – assets
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Pay for Performance
Final results of Performance Appraisal
Show all the types of incentives to which the employee isentitled, including targeted payments and actualpayments.
ow t e va ue o any non-cas tem prov e to t eemployee as a performance reward.
Finally show the total pay for Performance paid to the
employees (cash and non cash amount).
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Pay for Performance
Short and long term incentive scheme should be clearly
defined.
How it is funded, who is eligible, its terms and conditions,
ow t s ca cu ate an str ute , t e target payments,the periodicity of payments and its review procedures.
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Pay for 3P – Cash
VariableBonus
Long-term incentive
The Position The Person The Performance
Reference salary
ThroughPosition Evaluation
ThroughPerson Evaluation
Market Premium
Allowances
ThroughPerformance Evaluation
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Pay for 3P – Non-Cash
Non Cash Reward
The Position The Person The Performance
Position Based Benefits
ThroughPosition Evaluation
ThroughPerson Evaluation
Specific Benefits
Perquisites
ThroughPerformance Evaluation
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3-Ps & Compensation Policy
Pay according to:
•Corporate values and corporate philosophy
•Position based on position evaluation•Person based on person evaluation•
•Capacity to pay, to increase the personnel costs•Market levels to attract and retain•National employment conditions
•And ensure clear, continuous communication & fullunderstanding
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3-Ps Management
Model What When How How much
PositionOrganizationEvaluation
OrganizationCircle
Pay for Position a referencesalaryAnnual increase across the
boardNo salary range
EvaluationCommittee
Person PersonFrom 10 to360 Degree
Potential for promotion to a
va ua on Evaluationthrough privatequestionnaire
Monitor market value of theperson
PerformanceBusinessEvaluation
BusinessCycle
AnnualPlanningWorkshop
Annualperformancereviewworkshop
Pay for Performancea variable bonusIndividual / group / corporateresult and contributionNo merit increaseNo promotion basedon performance
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A Strategy to Manage 3-Ps
PositionOrganization
Analysis
Mapping of
Responsibilities
GradingStructure
Com etenc
PositionClarification
PositionEvaluation
Person
HRM Model
Individual ToolsOrganization ToolsStrategic Tools
Person
Performance
3-Ps Reward
Future
OrganizationAnalysis
CorporateObjectives
Analysis
Capacityto Pay Analysis
Profiling
Mapping ofObjectives
Mapping
of Results
Development
ObjectiveSetting
Performance
Review
Compensation
TotalRemuneration
Policy
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Q&A?