University of Illinois at Urbana-Champaign School of Labor and Employment Relations Spring 2015

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1 University of Illinois at Urbana-Champaign School of Labor and Employment Relations Spring 2015 Course: Instructor: Schedule: Office Hours: Office / Phone / LER 561, Compensation Systems Joe Martocchio, Professor Wednesday, 8 10:50 AM, Wagner Educational Ctr. (Rm. 35), LER Tuesday, 3 5 p.m. 125 LER Building / / Course Description This course conveys applied knowledge about compensation systems for aspiring HR professionals. We examine the context of compensation practice, the criteria used to compensate employees, compensation system design issues, employee benefits, and contemporary challenges that compensation professionals will face well into the 21st Century. You will learn core compensation systems concepts and tools through lectures, assigned text readings, student class presentations, tests of knowledge, and through participation in a semester-long team project. Required Text Martocchio, J. J. (2015). Strategic Compensation: A Human Resource Management Approach (8 th edition) and MyManagementLab. Upper Saddle River, NJ: Prentice Hall. Note: MyManagementLab contains the following case, which we will use throughout the semester, and PowerPoint slides for the textbook to facilitate preparation for the tests. Barcelona, D. J., & Martocchio, J. J. Building Strategic Compensation Systems: An Experiential Case. Upper Saddle River, NJ: Prentice Hall. ALL OF THIS MATERIAL IS INCLUDED AS A BUNDLE UNDER THE FOLLOWING ISBN:

2 Student Evaluation and Grading Scale First team written report (based on Strategic Analysis in casebook): Second team written report (based on Section 1 of casebook): Third team written report (based on Section 2 of casebook) Paired oral presentation of a compensation issue: Individual test of compensation knowledge 1: Individual test of compensation knowledge 2: Individual class participation: 18% of course grade 18% of course grade 18% of course grade 11% of course grade 15% of course grade 15% of course grade 5% of course grade Calculation of Course Grades Grade Points A % A 94 97% A % B % B 83 86% B % C % C 73 76% C % D % D 63 66% D % F 0 59% 2

3 Compensation Team Project: Building Strategic Compensation Systems This experiential project is designed to provide you an opportunity to integrate and apply knowledge that you will learn in this course. Teams of 5 class members will be established to complete this project that consists of three separate reports. Each team will submit one report for each part of the project. The three reports and due dates are listed below: Written Report 1: Written Report 2: Written Report 3: Strategic Analysis (February 18, by , 11:59 P.M. Central Time) Internal Consistency (March 18, by , 11:59 P.M. Central Time) Market Competitiveness (April 29, by , 11:59 P.M. Central Time)) Each team will serve as compensation experts who have been hired by the firm to develop an integrated compensation plan. An instructor s grade will be assigned to each report for each team. All team members will receive the same grade based on the instructor s evaluation. Each part of the case builds uniquely on your answers to prior parts of the case. As you work on the cases, I will provide you additional with data based on your answers in the prior part. Each report should be written as recommendations to top management. One approach to developing the report is to identify and discuss decisions that must be made to meet the objectives. Each decision should be supported with rationale that is logical and based on the content presented within your texts. Identify plausible alternatives to your decisions, and discuss possible problems that may be encountered. Each written report should be summarized in a oneto three-page executive summary at the front. This executive summary should contain the major objectives of the report and the corresponding major findings. I will provide 20 to 30 minutes during most class sessions for teams to meet. Class Participation Think about an LER course as a professional conference on human resources and industrial relations, much like conferences offered by professional groups such as Society for Human Resource Management and the WorldatWork. Joining in on sessions will provide you exposure to an expert in the field and to the insights of your student colleagues. Also, participation in class activities promotes professional networking. Career success depends, in part, on your development of networks. Networking begins with colleagues in the classroom. You will receive full credit for attending 12 or more (of the total 15) full class sessions, which includes the final exam date. You will 75 percent credit if you attend 12 class sessions, and zero credit if you attend 11 or fewer class sessions. This bonus plan works under a no-fault philosophy. That is, the reason for non attendance is irrelevant. However, consideration will be given for mitigating circumstances based on a written request to Assistant Dean of Student Affairs Becky Barker. 3

4 Tests of Compensation Knowledge 1 and 2 There will be two tests given during the semester. The first test will be given on March 4 and the other will be given on May 6. Both tests will be closed book. The tests will be based on the Strategic Compensation textbook, and will contain short-answer questions. The second test will be non cumulative. Individual Presentation of a Compensation Issue Students will make one 15-minute presentation on a compensation issue of your choice in combination of two or three students (I will base the group size on the total number of students enrolled in the course). Base your presentation on 2 or 3 articles from an HR practitioner publication (e.g., WorkSpan, published by WorldatWork and HRMagazine, published by the Society for Human Resource Management), business periodicals (e.g., BusinessWeek), or major newspapers (e.g., New York Times, The Wall Street Journal). Assume the role of an HR professional who is briefing his/her HR colleagues on a timely compensation topic. Please use 3 to 5 PowerPoint slides for the presentation. The presentation should not exceed 15 minutes. Following the presentation, please lead a class discussion. To lead a discussion, write two questions about the topic in the articles you presented. Class discussion should last about 10 minutes. I will make random assignments of pairs and presentation dates (the first set of presentations will take place on February 4). You will receive the assignments by on January 22 (one day after the first class). Academic Integrity The University is responsible for maintaining academic integrity to ensure the quality of scholarship. It is your responsibility as a student to refrain from academic dishonesty, including plagiarism, i.e., representing the words or ideas of another as your own. Read the UIUC Student Code: Part 4. Academic Integrity (1-401 to 1-406). 4

5 Compensation Systems: Setting the Stage Course Outline and Schedule January 21 Course Introduction and Overview Strategic Compensation Issues and Goals of the Compensation Department Strategic Compensation: Chapter 1 January 28 and Feb. 4 Building Internally Consistent Compensation Systems Strategic Compensation: Chapter 6 February 11 Guest Speakers Designing Compensation Systems: Internal Consistency February 18 Contextual Influences on Compensation Practice (WRITTEN REPORT 1 IS DUE) Strategic Compensation: Chapter 2 Bases for Pay February 25 Traditional Bases for Pay: Seniority and Merit; Incentive Pay Incentive Pay; Pay-for-Knowledge and Skill-Based Pay Strategic Compensation: Chapters 3, 4, and 5 Test 1 March 4 Test of Compensation Knowledge 1 (based on Chapters 1 through 6) Designing Compensation Systems: Market Competitiveness March 11 and 18 Building Market-Competitive Compensation Systems Strategic Compensation: Chapter 7 (WRITTEN REPORT 2 IS DUE ON MARCH 18.) 5

6 March 25 No Class University Spring Break Employee Benefits April 1 Employee Benefits Strategic Compensation: Chapters 9, 10, and 11 Designing Compensation Systems: Recognizing Employee Contributions as well as Contemporary Challenges April 8 Executive Compensation Strategic Compensation: Chapter 12 April 15 and 22 Building Pay Structures that Recognize Employee Contributions Strategic Compensation: Chapter 8 April 29 Contingent Workers and the Flexible Workforce and Expatriate Compensation Strategic Compensation: Chapters 13 and 14 (WRITTEN REPORT 3 IS DUE.) May 6 Test of Compensation Knowledge 2 (Chapters 7 through 9 and Chapters 11, 12, and 14) 6

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