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    Dessler hrm16 PPT 11 1

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    Dessler hrm16 PPT 11 1

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    Wong Yong Sheng Wong
    442 views28 pages
    HRM

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    Dessler_hrm16_PPT_11_1

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    HRM

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    442 views28 pages

    Dessler hrm16 PPT 11 1

    Uploaded by

    Wong Yong Sheng Wong
    HRM

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 28

    Human Resource Management

    Sixteenth Edition, Global Edition

    Chapter 11

    Establishing Strategic Pay


    Plans

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objectives (1 of 2)
    11.1 List the basic factors determining pay rates.
    11.2 Define and give an example of how to conduct a job
    evaluation.
    11.3 Explain in detail how to establish a market-competitive
    pay plan.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objectives (2 of 2)
    11.4 Explain how to price managerial and professional jobs.
    11.5 Explain the difference between competency-based and
    traditional pay plans.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objective 11.1: List the Basic
    Factors Determining Pay Rates

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Basic Factors in Determining Pay Rates
    • Employee Compensation
    – Direct financial payments
    ▪ wages, salaries, incentives, commissions, and
    bonuses
    – Indirect financial payments
    ▪ employer-paid insurance and vacations

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Aligning Total Rewards with Strategy
    • Aligned Reward Strategy – is creating a compensation
    package that produces the employee behaviors the firm
    needs to achieve its competitive strategy.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Equity and Its Impact on Pay Rates
    • Equity Theory of Motivation
    – once a person perceives an inequity a tension or drive
    will develop that motivates him or her to reduce the
    tension and perceived inequity
    – Types of equity
    ▪ External
    ▪ Internal
    ▪ Individual
    ▪ Procedural

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Pay Polices
    • The employer’s compensation strategy will manifest itself
    in pay policies.
    – Geography
    ▪ How to account for geographic differences in cost
    of living

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objective 11.2: Define and
    Give an Example of How to Conduct a
    Job Evaluation

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Job Evaluation Methods
    • Job Evaluation
    – Relative work
    – Results in a salary structure/hierarchy
    • Market-Based Approach
    – conducting formal or informal salary surveys to
    determine what others in the relevant labor markets
    are paying for particular jobs
    • Market-competitive pay plan
    – Internal and external equity

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Compensable Factors
    • Compensable Factors
    – A fundamental, compensable element of a job, such
    as skill, effort, responsibility, and working conditions
    – Establish how jobs compare one to another

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Job Evaluation Methods: Ranking (1 of 2)
    1. Obtain job information
    2. Select and group jobs
    3. Select compensable factors
    4. Rank jobs
    5. Combine ratings
    6. Compare current pay with what others are paying based
    on salary surveys
    7. Assign a new pay scale

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Job Evaluation Methods: Ranking (2 of 2)
    Table 11-2 Job Ranking at Jackson Hospital

    Ranking Order Our Current Annual What Others Pay: Our Final
    Pay Scale Salary Survey Pay Assigned Pay
    1. Office manager $43,000 $45,000 $44,000
    2. Chief nurse 42,500 43,000 ​42,750
    3. Bookkeeper 34,000 36,000 35,000
    4. Nurse 32,500 33,000 32,750
    5. Cook 31,000 32,000 31,500
    6. Nurse’s aide 28,500 30,500 29,500
    7. Orderly 25,500 27,000 27,000

    Note: After ranking, it becomes possible to slot additional jobs (based on overall job
    difficulty, for instance) between those already ranked and to assign each an appropriate
    wage rate.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Job Evaluation Methods: Job
    Classification
    Figure 11-4 Example of a Grade Definition

    Grade Nature of Assignment Level of Responsibility


    GS-7 Performs specialized duties in a Work is assigned in terms of objectives,
    defined functional or program priorities, and deadlines; the employee
    area involving a wide variety of works independently in resolving most
    problems or situations; conflicts; completed work is evaluated
    develops information, identifies for conformance to policy; guidelines,
    interrelationships, and takes such as regulations, precedent cases,
    actions consistent with and policy statements require
    objectives of the function or considerable interpretation and
    program served. adaptation.

    Source: From “Grade Level Guide for Clerical and Assistance Work” from U.S. Office of
    Personnel Management, June 1989.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Job Evaluation Methods: The Point
    Method & Computerized Job Evaluations
    • The point method
    • A job evaluation method in which a number of
    compensable factors are identified and then the degree
    to which each of these factors is present on the job is
    determined
    • Computerized job evaluations

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objective 11.3: Explain in Detail
    How to Establish a Market-Competitive
    Pay Plan

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    How to Create a Market-Competitive
    Pay Plan (1 of 4)
    1. Choose Benchmark Jobs
    2. Select Compensable Factors
    3. Assign Weights to Compensable Factors
    4. Convert Percentages to Points for Each Factor

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    How to Create a Market-Competitive
    Pay Plan (2 of 4)
    5. Define Each Factor’s Degrees
    6. Determine For Each Factor Its Factor Degrees’ Points
    7. Review Job Descriptions and Job Specifications
    8. Evaluate the Jobs

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    How to Create a Market-Competitive
    Pay Plan (3 of 4)
    9. Draw the Current (Internal) Wage Curve
    10.Conduct a Market Analysis: Salary Survey
    11.Draw the Market (External) Wage Curve
    12.Compare and Adjust Current and Market Rates for Jobs

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    How to Create a Market-Competitive
    Pay Plan (4 of 4)
    13.Develop Pay Grades
    14.Establish Rate Ranges
    15.Address Remaining Job
    16.Correct Out-of-Line Rates

    – Underpaid / Red circle

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objective 11.4: Explain How to
    Price Managerial and Professional Jobs

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Pricing Managerial and Professional
    Jobs
    • What Determines Executive Pay
    • Compensating Executives
    – Base Pay
    – Short-term Incentives
    – Long-term incentives
    – Executive Benefits and Perks

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Learning Objective 11.5: Explain the
    Difference Between Competency-Based
    and Traditional Pay Plans

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Contemporary Topics in Compensation
    • Competency-based pay
    • Broadbanding
    • Comparable worth
    • Board oversight of executive pay
    • Total rewards

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Competency-Based Pay
    • Competencies are demonstrable personal characteristics
    such as knowledge, skills, and personal behaviors.
    • Competency-based pay means the company pays for the
    employee’s range, depth, and types of skills and
    knowledge, rather than for the job title he or she holds.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Broadbanding
    Figure 11-11 Broadbanded
    Structure and How It Relates to
    Traditional Pay Grades and Ranges

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Comparable Worth
    • Comparable worth refers to the requirement to pay men
    and women equal wages for jobs that are dissimilar but of
    comparable value to the employer.

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved


    Chapter 11 Review

    What you should now know….

    Copyright © 2020 Pearson Education Ltd. All Rights Reserved

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