INFORMATION Designing, implementing, and managing effective and appropriate pay structure architecture allows an organization to attract and retain key talent and control costs regardless of business strategy. How does one know which structure is right for the organization? The answer to this question is not an easy one but can be answered with a series of questions: What is the mission of the organization? What does the organization expect to accomplish through the pay structure? What are the compensable factors associated with the work being done? What are the internal equity factors? What is the competitive environment (that is what is the competition doing and paying)? What is the organizations size? What is its structure? How many different jobs (classifications)? What is the nature of the work done? Is a union involved? (I can hear you already: So many questions to answer and so little time to answer them.) But you can see these and many more questions needs to be answered before you can get to work on a structure. Once one has determined the purpose and the characteristics of the organization, one can begin to craft the structure. There are four basic designs for salary structures: traditional, market-based, broadbands, and step structures with entry points, mid-points, and maximum rates of pay. The most common approach in initially designing a structure is to group similar jobs into pay grades (page 279-281 see 284-285 of the text). This often results in pay ranges or pay bands (more organizations are clustering pay grades into wide bands commonly called Broadbanding see 284-285 of the text). Remember, a salary range structure is a group of jobs and salary ranges in an organization. The salary range is the span between the maximum and minimum for a job or job group. There are dozens of models in the text and in other sources. The important issue is that, in my view, should not be an inflexible tool used to limit managerial decision making or creativity. One should consider in advance how the salary structure design will impact the organization through its flexibility, philosophy, control, and ability to adapt to business needs as they emerge. A well-designed salary structure also creates flexibility for managers. The salary structure allows managers to reward performance, skill development, and critical skills without employees leaving the pay range for their position or the need to promote them just for moneys sake. A poorly designed structure limits managers ability to make decisions, limits promotions from within, creates dissatisfaction among high performing employees, and, as a results, increases turnover and ultimately increases labor costs. Its important to note here that nearly 55% of organizations use multiple pay structures as a part of a purposed design to meet organizational objectives. This phenomenon is often due the employment size of the organization and the length of the scalar chain. It can also be the result of a geographically diverse organization, one with many divisions, or one with a union or even several unions. What is clear in our study of pay structures and system architecture is that the designers cannot operate without concern for the entire organization, its place in the market, and its response to the flow of business strategy. Typically, the narrower the systems view of the employees ability to move through the system and the greater the limit of managerial discretion, the greater the potential of employee dissatisfaction and job turnover. On the other hand, the more flexible a pay system is in meeting the discretionary actions of managers in meeting employee expectations, the less capable the system is in containing labor costs. Pay system architects then must be able to strike a balance for the organizations they serve so as to meet the business goals while appropriately integrating the organizations philosophy. No easy job it is. As you think about the paper due this week (Foundations of a Compensation Strategy), consider the micro elements in developing an entire pay strategy. Think of the connections address in the question itself and how you would use those relationships to craft a strategy. Use sources available to you on your job and in the text. Remember that you do not have to create an entire system or strategy; only one job or classification and the elements and relationships. Week 3 Deliverables: Week Three Learning Outcomes This week students will: Analyze the pros and cons of a chosen job evaluation method Assess critical pay survey problems Evaluate the interrelationship of performance factors and compensation Overview Week Three Quiz Day 6 Objective Assessment 6 Foundations of a Compensation Strategy Day 7 Written Assignment 10 Distinguished Provides an expertly crafted examination of the interrelationship between the three components. Exhibits a complete understanding of the purpose of each component and how it affects the others. Proficient Provides an examination of the interrelationship between the three components. Exhibits a sufficient understanding of the purpose of each component and how it affects the others. Basic Provides an examination of the interrelationship between the three components. Exhibits a rudimentary understanding of the purpose of each component and how it affects the others. Below Expectations Attempts to provide an examination of the interrelationship between the three components, but exhibits a very limited understanding of the purpose of each component and how it affects the others. Non-Performance The paper is either nonexistent or fails to discuss the interrelationship between the three components. Distinguished Provides an expertly crafted and completely accurate explanation of how all three components would be used to determine the compensation for an employee. Proficient Provides a sufficiently crafted and accurate explanation of how all three components would be used to determine the compensation for an employee. May be missing minor details or contain minor inaccuracies. Basic Provides an explanation of how all three components would be used to determine the compensation for an employee. Explanation may contain some inaccuracies or be missing major details. Below Expectations Attempts to provide an explanation of how all three components would be used to determine compensation for an employee; however, explanation may contain major inaccuracies or may be lacking in details. Non-Performance The paper is either nonexistent or fails to explain how all three components would be used to determine the compensation for an employee. Distinguished Provides a fully completed salary evaluation. Evaluation shows a complete understanding of the three components. Proficient Provides a mostly completed salary evaluation. Evaluation shows a sufficient understanding of the three components. Basic Provides a partially completed salary evaluation. Evaluation shows a rudimentary understanding of the three components. Below Expectations Provides an underdeveloped salary evaluation. Evaluation shows a lack of understanding of the three components. Non-Performance The paper is either nonexistent or fails to provide a salary evaluation. Distinguished Creates new knowledge derived from a novel or unique idea, question, format, or product. Proficient Constructs an original idea, question, format, or product. Basic Attempts to construct an original or unique idea, question, format, or product. Below Expectations Student reinvents available ideas. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. Distinguished Clearly and comprehensively explains in detail the issue to be considered, delivering all relevant information necessary for full understanding. Proficient Clearly explains in detail the issue to be considered, delivering enough relevant information for an adequate understanding. Basic Briefly recognizes the issue to be considered, delivering minimal information for a basic understanding. Below Expectations Briefly recognizes the issue to be considered, but may not deliver additional information necessary for a basic understanding. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. Distinguished Displays meticulous comprehension and organization of syntax and mechanics, such as spelling and grammar. Written work contains no errors, and is very easy to understand. Proficient Displays comprehension and organization of syntax and mechanics, such as spelling and grammar. Written work contains only a few minor errors, and is mostly easy to understand. Basic Displays basic comprehension of syntax and mechanics, such as spelling and grammar. Written work contains a few errors, which may slightly distract the reader. Below Expectations Fails to display basic comprehension of syntax or mechanics, such as spelling and grammar. Written work contains major errors, which distract the reader. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. Distinguished Accurately uses APA formatting consistently throughout the paper, title page, and reference page. Proficient Exhibits APA formatting throughout the paper. However, layout contains a few minor errors. Basic Exhibits basic knowledge of APA formatting throughout the paper. However, layout does not meet all APA requirements. Below Expectations Fails to exhibit basic knowledge of APA formatting. There are frequent errors, making the layout difficult to distinguish as APA. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. Distinguished The paper meets the specific page requirement stipulated in the assignment description. Proficient The paper closely meets the page requirement stipulated in the assignment description. Basic The paper meets over half of the page requirement stipulated in the assignment description. Below Expectations A fraction of the page requirement is completed. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. Distinguished Uses more than the required number of scholarly sources, providing compelling evidence to support ideas. All sources on the reference page are used and cited correctly within the body of the assignment. Proficient Uses required number of scholarly sources to support ideas. All sources on the reference page are used and cited correctly within the body of the assignment. Basic Uses less than the required number of sources to support ideas. Some sources may not be scholarly. Most sources on the reference page are used within the body of the assignment. Citations may not be formatted correctly. Below Expectations Uses inadequate number of sources that provide little or no support for ideas. Sources used may not be scholarly. Most sources on the reference page are not used within the body of the assignment. Citations are not formatted correctly. Non-Performance The assignment is either nonexistent or lacks the components described in the instructions. This provides the reader with some context, or the points that you are making by including this quote. This part provides the reader with who this quote is coming from as well as his relationship or authority on the topic. Context Whose words these are and why he is an authority on this topic. Quoted material along with citation. This part provides the reader with who this quote is coming from as well as his relationship or authority on the topic. Purchase the answer to view it
