Compensation Decision Making

The ultimate goal of the text is to make compensation decision makers out of its readers. No book can provide all the answers nor can it provide a fail-safe formula. What is can provide are the knowledge and techniques that lead to answers. All compensation decisions are made under a set of decision-making constraints. This book analyzes those constraints. A thorough understanding of them will assist the reader, since a careful consideration and weighing of all the constraints should result in more rational and workable compensation decisions.... The decisions have an impact upon the company achieving high productivity or slowly slipping into oblivion. To aid in preparing for compensation decisions, these pages were written to provide readers with the skills to make wise decisions in a complex, ever-changing, and competitive environment. -Pref.

This text equips students with a solid understanding of the theories, concepts, and principles behind compensation decision making. The new edition includes updated information about the detailed procedures used in implementation of compensation practices.

This paper examines the relationship between shared capitalist modes of pay and shared modes of decision-making via employee involvement and related committees and between them and measures of productivity and worker well-being in two data sets: the employee based Worker Participation and Representation Survey and the California Establishment Survey. It finds in both data sets that the forms of shared compensation are complementary in the sense that they are more likely to be found together than if firms chose them separately; that shared compensation systems are positively associated with shared decision-making; and that combining shared compensation systems and employee involvement has greater impacts on outcomes than each system by itself.

Within the broader study of decision-making, the Carnegie perspective occupies a unique place. Initially developed by pioneering scholars such as Herbert Simon and James March, it views organizational decisions as resulting from the combined influences of a.) psychological processes of attention allocation, interpretation of experience, and motivated search, and b.) features of the organizational context that direct attention, influence preferences, contend with ambiguity, contain conflict, and divide labor. Despite its unique strengths and a considerable body of work (see below some foundational references), research that adopts the Carnegie perspective is still relatively unknown outside the field of organization studies. As James March noted, Carnegie has been primarily an importer of ideas, rather than an exporter. The goal of this research topic is to facilitate dialogue and integration between this well-established Carnegie perspective and other lines of inquiry into the study of decision making and problem solving. We are interested in bringing to the fore what is distinctive in the accumulated body of evidence produced by the Carnegie perspective and highlighting similarities, differences, and potential points of connection with other research done on similar topics. To achieve this goal, we hope that the front end of each submission will cover the following four components:

Employing a pragmatic approach to compensation system design, this innovative casebook walks students step-by-step through the decision-making process, equipping them with the skills and knowledge necessary to make effective decisions in a service or manufacturing setting. The text's completely integrated JOBEVAL sortware package enables students to see the results of their decisions, modify decisions, and print professional graphs and reports.