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MANA 5322-

Compensation and Reward Systems

Instructor: Jeanne Michalski, Ph. D.

Phone: 817-272-3864
Office: COBA 606

Tuesday 5:00 – 5:30

Thursday 4:30 – 5:30 and by appointment
Location: Tuesday 7:00 - 9:50

COBA 243

This is an advanced course in human resource management that covers the major policies, techniques and procedures associated with the compensation and benefits functions. This will include issues related to wage levels and external equity, job evaluation and internal equity, and individual pay equity. An overview of benefits in the organization will consider issues such as benefit costs, health care, retirement programs, savings programs, and paid time off.
In addition to learning the theory and topics of compensation and benefit practices through readings and classroom lecture, this course will require you to participate and model some of the situations.

At the completion of the course the student will be able to

  • Explain the purpose of job analysis and job evaluation to establish a pay structure within an organization

  • Design a market pricing strategy.

  • Create a pay matrix based on performance and position into salary range.

  • Cost out a merit budget

  • Assess effectiveness of sales incentive plan

  • Discuss the difference between defined benefit plans and defined contribution plans and the relative merits of each type of plan.

  • Describe issues in benefits planning and design.


G. T. Milkovich & J.M. Newman. Compensation (9th edition) McGraw-Hill 2008

Readings: Why Incentive Plans Cannot Work, Kohn A., 1993, Harvard Business Review.
Case Studies:
BIOMED CO., LTD.: Designing a new Sales Compensation Plan

The Pension Plan of Bethlehem Steel, 2001

(Each of the groups will also be assigned one of the following cases)
Performance Pay at Safelite Auto Glass (A & B)

Visionary Design Systems

Mobil USM&R (A): Linking the Balanced Scorecard

Compensation at Level 3 Communications

Perelson Weiner LLP
The case studies and readings can be purchased at the educational rate from Harvard Business School Publishing. Contact information: course name is 5322 Compensation and Reward Systems. The web is:
A grade of A (90%), B (80%), C (70%), D (60%), or F (<60%) will be earned based on:

Midterm 100

Final Exam 100

Homework 100

Class Assignments/Participation 100

Group Paper/Presentation 100

Individual Communication Plan 100



All written assignments must be typed with 12-point font, on 8.5 x 11 inch paper with 1-inch margins. Returned paperwork, unclaimed by a student, will be discarded after 4 weeks. Written assignments are due at the beginning of class. Late assignments and handwritten assignments will not be accepted.

Class participation is essential in order to gain maximum benefit from the course. Participation is evaluated on preparation for class and the quality of contributions made to discussions and exercises in the classroom. Students are expected to maintain a classroom environment that is conducive to learning and free from cellular phones, beepers, newspapers, or any other form of distracting behavior. Laptop computers are permitted for note-taking only. There will be a number of classroom assignments that will count towards your grade. These assignments may not be completed after class.
Exams will take place during normal class times. Bring #2 pencils and an answer sheet form number 4521 to class for the exams. In addition you may bring blank paper in case you need additional pages for essay responses.
Tests will consist of multiple choice, true/false, and short answer and essay questions about the material covered in the course including all assigned readings, cases, and in class exercises.
Make-up Exam Policy: YOU must make prior arrangements with me to arrange for any make-up test. Any make up arrangement will be made on a case-by-case basis.

You will be reviewing a case with a compensation issue that needs to be addressed. You will need to identify existing compensation, the issues that need to be addressed, key components and any unusual features. You will need to be able to demonstrate an understanding of the case and make recommendations for the future. You will need to identify appropriate internal and external factors influencing the organization’s strategic decisions and effectively describe their impact. More information will be provided during class.
Each student will need to prepare an individual communication plan for the sales incentive recommendations that their group proposed for the BIOMED case. The communication plan should be designed to communicate to the employees any changes in compensation. You should lay out the whole strategy as well as at least two samples of the actual documents you think should be used to communicate the changes.

If you are a student who requires accommodations in compliance with the Americans With Disabilities Act (ADA), please consult with me at the beginning of the semester. As a faculty member, I am required by law to provide “reasonable accommodation” to students with disabilities, so as not to discriminate on the basis of that disability. Your responsibility is to inform me of the disability at the beginning of the semester and provide me with documentation authorizing the specific accommodation. Student services at UTA include the Office for Students with Disabilities (located in the lower level of the University Center or 272-3364) which is responsible for verifying and implementing accommodations to ensure equal opportunity in all programs and activities.
The University supports a variety of student success programs to help you connect with the University and achieve academic success. They include learning assistance, developmental education, advising and mentoring, admission and transition, and federally funded programs. Students requiring assistance academically, personally, or socially should contact the Office of Student Success Programs at 817-272-6107 for more information and appropriate referrals.
Academic dishonesty is a completely unacceptable mode of conduct and will not be tolerated in any form at The University of Texas at Arlington. All persons involved in academic dishonesty will be disciplined in accordance with University regulations and procedures. Discipline may include suspension or expulsion from the University.
“Academic dishonesty includes, but is not limited to, cheating, plagiarism, collusion, the submission for credit of any work or materials that are attributable in whole or in part to another person, taking an examination for another person, any act designed to give unfair advantage to a student or the attempt to commit such acts.” (Regents’ Rules and Regulations, Part One, Chapter VI, Section 3, Subsection 3.2., Subdivision 3.22).
If anyone is tempted to call in a bomb threat, be aware that UTA will attempt to trace the phone call and prosecute all responsible parties. Every effort will be made to avoid cancellation of presentations/tests caused by bomb threats. Unannounced alternate sites will be available for these classes. Your instructor will make you aware of alternate class sites in the event that your classroom is not available.

This document is not meant to be inclusive and cannot cover everything that may or may not happen in class. It is not a contract, but merely a guide and may be changed by the instructor anytime during the semester.

COURSE ASSIGNMENTS – tentative schedule

Additional assignments may be added

August 31 Introduction

Class expectations

Identification of groups

September 7 The Pay Model

Strategic Perspectives

Discussion of Strategy and Total Rewards

Assignment: Strategy recommendations

Read: Chapters 1 & 2
September 14 Defining Internal Alignment

Read: Chapter 3
September 21 Job Analysis

Evaluating Work: Job Evaluation

Read: Chapters 4 & 5

Assignment: Complete job evaluation of Accounting positions

Due: Job description
September 28 Person-based Structures

Read: Chapter 6

Assignment: competencies

October 5 Competitiveness

Designing Pay levels, mix and pay structure

Read: Chapters 7 & 8

Due: Pay information

Assignment: Complete job match

Assignment: Design Pay structure based on market data

October 12 MID-TERM EXAM

October 19 Pay and Performance

Read Chapter 9

October 26 Pay-for-Performance Plans

Performance Appraisals

Read: Chapters 10 & 11

Due: Recommended pay matrix

November 2 Compensation Legislation

Compensation in Special Groups (Executives, Sales)

Compensation Communication

Read: Chapters 14 & 17

Read: Biomed Co. Designing a New Sales Compensation Plan

November 9 Benefits Determination Process

Benefits Options

Read: Chapters 12 & 13

November 16 Benefits continued

Read: Bethlehem Steel Pension Plan

Due: Communication Plans

November 23 NO CLASS

November 30 Group Presentations (All Presentations due)

Read: Chapter 18

December 7 Group Presentations (All Group Papers due)

Review for exam
December 14 FINAL EXAM

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