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Lecture 8

MHR 749 Lecture 8: MHR WEEK EIGHT

by OneClass367386 , Fall 2017
5 Pages
85 Views

Department
Human Resources
Course Code
MHR 749
Professor
Margaret Yap
Lecture
8

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WEEK EIGHT CHAPTERS 8?
Specify Competitive Pay Policy
Options:
o Lead the market with respect to pay
o Match average pay of competitors
o Lag behind average market pay rates
Surveys provide the data for translating policy into pay levels, pay mix, and structures
Compensation Survey
A compensation survey is the systematic process of collecting and making judgments
about the compensation paid by other employers
Can be done in-house or by consultants
The Purpose of a Survey
Adjust pay levelhow much to pay?
o Based on overall movement of pay rates caused by competition in the market
Adjust pay mixwhat forms?
o Base, bonus, stock, benefits
Adjust pay structure?
o Validate job evaluation results; establish internal structures
Study special situations
o Specific pay-related problems
Estimate competitors’ labor costs
o “Competitive intelligence”
Select Relevant Market Competitors
Relevant labor market includes employers who compete:
o For same occupations or skills
o For employees in same geographic area
o With same products and services
Fuzzy markets
o Organizations with unique jobs and structures find it hard to get comparable
market data
o Place more emphasis on external market data
o Valve
Design the Survey
Who should be involved?
How many employers?
Which jobs to include?
What information to collect?
Interpret Survey Results
Statistical analysis
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o Frequency distribution
Unusual shapes may reflect:
Problems with job matches
Widely dispersed pay rates
Employers with widely divergent pay policies
o Central tendency
o Variation
Job Matching
The degree of match between the organization’s jobs and survey jobs must be carefully
assessed on job content rather than on the basis of job title only
Interpret Survey Results and Construct a Market Line
Verify data for accuracy and match
o Accuracy of match
Benchmark conversion/survey leveling
o Anomalies
Does any one company dominate?
Do all employers show similar patterns?
Outliers?
Combine Job Evaluation & Market Survey Data
two pieces of data on each benchmark:
o Survey data dollars
o Our own data - job evaluation points
scatterplots are useful to see what the data look like
Construct a Market Pay Line
Update the survey data
o Aging or trending refers to the process of updating pay data to forecast the
competitive rates for the future when pay decisions will be implemented
Pay rates are constantly changing
Survey data represents pay at the date it was collected
Adjust survey data to represent pay at the current or future date when pay decisions will
be implemented
Pay Structure
Two components:
o Pay policy line: represents an adjustment to the market pay line to reflect the
organization’s external competitive position in the market
o Pay ranges: upper and lower limits on pay
Constructing Ranges:
1. Develop Grades
a pay grade is a horizontal grouping of different jobs that are considered substantially
equal for pay purposes
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find more resources at oneclass.com

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Description
WEEK EIGHT CHAPTERS 8? Specify Competitive Pay Policy Options: o Lead the market with respect to pay o Match average pay of competitors o Lag behind average market pay rates Surveys provide the data for translating policy into pay levels, pay mix, and structures Compensation Survey A compensation survey is the systematic process of collecting and making judgments about the compensation paid by other employers Can be done in-house or by consultants The Purpose of a Survey Adjust pay levelhow much to pay? o Based on overall movement of pay rates caused by competition in the market Adjust pay mixwhat forms? o Base, bonus, stock, benefits Adjust pay structure? o Validate job evaluation results; establish internal structures Study special situations o Specific pay-related problems Estimate competitors labor costs o Competitive intelligence Select Relevant Market Competitors Relevant labor market includes employers who compete: o For same occupations or skills o For employees in same geographic area o With same products and services Fuzzy markets o Organizations with unique jobs and structures find it hard to get comparable market data o Place more emphasis on external market data o Valve Design the Survey Who should be involved? How many employers? Which jobs to include? What information to collect? Interpret Survey Results Statistical analysiso Frequency distribution Unusual shapes may reflect: Problems with job matches Widely dispersed pay rates Employers with widely divergent pay policies o Central tendency o Variation Job Matching The degree of match between the organizations jobs and survey jobs must be carefully assessed on job content rather than on the basis of job title only Interpret Survey Results and Construct a Market Line Verify data for accuracy and match o Accuracy of match Benchmark conversion/survey leveling o Anomalies Does any one company dominate? Do all employers show similar patterns? Outliers? Combine Job Evaluation & Market Survey Data two pieces of data on each benchmark: o Survey data dollars
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