2. Presented By:
Group #2 Members:
Syed Awon Hussain Shah 226
Bashir Ahmed 211
Muhammad Mumtaz 215
Muhammad Naeem 216

4. Pay Strategy

Support organization’s business strategy
And
Contribute organizational Effectiveness

5. Changing Environment

 Organizations
 Business
 Individual
 Organization Design
 Pay system

6. Reasons

Pay Practices Hard To Change
Pay system Change is Complex
Organizational Hurdles

7. Disadvantages of
Misaligned Pay Practice

 Value
 High Cost in Compensation
 Inappropriate & Misdirected Behavior

8. Globalization Impact

 Moving Products and services across the national
boundary in seamless way
 Greater Competition
 Quick and Improve Customer Services
Advance IT system, Knowledge and Skills are the way to be
competitive today.

9. Cont’d

 Organizations No Longer Afford Extensive Hierarchies
 Individuals No Longer have Loyalty Contract

10. Need of Key Skills

• Demand more then Supply
• Hot Talent
• Negotiation

11. Diversity

 Employee from different areas
 Individual Differences
 Reward System
 Teams
 Collective Response

12. 
Muhammad Mumtaz 215

13. Pay the person

For individual worth (knowledge, skills and
competencies) rather than for the value of a job they
perform.

14. Cont’d

 Pay system based on job and job evaluation
 Individual had stable duties.
 Add considerable value due to high knowledge and
skills
Very dangerous and misleading to pay them according to
job worth rather then their individual worth.

15. Job and Job evaluation

 Stable duties
 Market value of individual
 High level of knowledge and skills
 Job worth
 High level of performance

16. Payment method

 According to market value
 According to knowledge
 According to skills
 According to competencies
 Considering the internal and external market labor into
account
 More emphasize on external

17. Challenge in paying
individual

 Developing good measure for
 Their skills, knowledge and competencies
 Measure Use by mostly organization,
 Leadership and communication ability
 Technical and business knowledge

18. Future perspective

 Detailed intranet based description
 Knowledge and skills to be effective
 Knowledge and skills profile

19. Important objectives

 Motivate individual to learn the skills and knowledge
 Raise the pay of individual to become more valuable
Clearly key to developing pay system and retain valuable human
capital.

20. 
Bashir Ahmed 211

21. Reward Excellence

Through a pay for performance compensation that
establishes a clear relationship between a significant amount
of pay and attainment of organizational objectives.

22. Cont’d

 Important way to attract and retain top performance.
 potentially powerful motivator.
 Partial substitute for traditional loyalty employment
relationship.

23. Cont’d

Traditional Evidence:
• Pay cannot be a motivator.
• Does not motivate the employees.
New Evidence:
• Does not support this view.
• Significance amount of pay and behavior.

24. Elements of reward

Career Long term
development incentive
Promotion
opportunities
Short term
incentive
Work/life
balance
Flexible
Base salary and
work
benefits
environment

25. Traditional Approach to Pay
for performance

 Pay on the basis of merit.
Disadvantages:
• Failure approach
• Poor Measure
• Small changes in compensation
• No motivational impact
• Failure to retain high performance.

26. Pay for Performance Plan

 Important for organization reward system.
 Satisfy needs.
 Reflect the Strategy, structure and business process.
 Fits the characteristics of organization .

27. Variable Pay Plans

Profit Sharing
Stock ownership
Or
Variable Pay
Stock Option
Plan
Team/Group Incentive

28. Types: PSP

 Cash plan
 Deferred plan
 Combination plan

29. Seniority-Based pay
system

 Primarily Encourage individual to stay with the
organization
 Don’t reward skill development or performance
effectiveness.
 Don’t motivate individual to improve their skills or
perform effectively.
 Fails to develop human capital or organization and
retaining the most valuable employees.

30. 
Muhammad Naeem 216

31. Individualizing the pay
system

To give employees choices in how they are rewarded and
what reward they receive.

32. Cont’d

 One-size-fits-all approach
 Give little choice
 Homogeneous work force
 Does not fit a divorce work force

33. One-size-fits-all
approach

With Diverse Workforce:
• Tremendous risk of giving individual reward.
• Negative consequences.
• Negative for motivation.
• Failing to reward with things that they value highly.

34. Characteristic of individual pay
system

 Attraction
 Retention
 motivation

35. Reward and organizational
culture

 Diverse workforce
 Similarities and differences among employees.
 Homogeneous workforce
 Same type of job
 Same condition

36. Strategic reward

Embrace everything that employees value in the
employment setting.

37. Strategic reward
Framework


38. Alternative

 Considerable amount of choice
 Give option to individuals
Work simply for cash, having extensive benefits, or choose
the type of pay for performance system.

39. Advantages

 Tailoring rewards to employees preferences
 Greater Effectiveness
 Retaining diverse workforce
Negative point
Create too diverse workforce that wants to establish a strong
unified Culture.

40. Cont’d

Organizations are,
• Moving towards a more diverse workforce.
• Becoming more global.
• Flexibility and individualizations.

41. 
Any Question….?

42. 
Thank you