Human Resources Management for Public and Nonprofit Organizations

251

After you have read this chapter, you should be able to:

Understand the importance of compensation to strategic human

resources management

Understand basic theories underlying pay systems

Explain external, internal, and employee equity

Understand the role that labor markets play in determining

compensation

Explain how to determine the relevant labor market for a spe-

cifi c job

Discuss what compensable factors are and how they relate to job

evaluation

T

he design, implementation, and maintenance of compensation
systems are important parts of strategic human resources management
(SHRM). Decisions about salaries, incentives, benefi ts, and quality - of - life
issues are important in attracting, retaining, and motivating employees.
Strategic decisions about pay levels, pay structures, job evaluation, and
incentive pay systems infl uence the ability of an organization to compete in
the marketplace to attract the most qualifi ed and competent applicants and
retain its most talented and productive employees. Compensation is a topic

• • • • • •

CHAPTER NINE

COMPENSATION

Y