Building Market Competitive Compensation System – Integrating Internal Job Structure with External Market Pay Rates: Compensation Surveys, Choosing Compensation Survey Conducted by Third Parties
This SHRM article —is primarily for the benefit of HR professionals who are not compensation specialists—discusses all the steps involved in developing and implementing a market-based pay structure. It refers to but does not include a detailed discussion of job evaluation or of other internally focused methods of setting base pay.
This SHRM article —is primarily for the benefit of HR professionals who are not compensation specialists—discusses all the steps involved in developing and implementing a market-based pay structure. It refers to but does not include a detailed discussion of job evaluation or of other internally focused methods of setting base pay.
PowerPoint presentation on Variable Pay Viren Patwa
Hello friends my self viren an i gonna share u PowerPoint presentation on Variable Pay with important details highlighted
If u like my presentation pls like an share have a good thank you
establishing strategic pay plans
equity and its impact on pay rates
job evaluation methods
how to create a market-competitive pay plan
pricing managerial and professional jobs
contemporary topics in compensation
9 Salary Surveys A Snapshot Market data obtained from salary surv.docxsleeperharwell
9 Salary Surveys: A Snapshot Market data obtained from salary surveys create the foundation for a viable compensation strategy. When combined with economic statistics and business strategy, they create the infrastructure of an organization’s salary practices. Just as DNA provides information used to construct, identify, and operate the human body, market data obtained from salary surveys are used to construct and operate organizations’ pay programs. Market data evolve from salary surveys that are compiled and analyzed periodically to determine how well the company pays relative to the market. How the company statistically analyzes, charts, and uses the data is a function of its corporate compensation strategy. Then, pay is delivered to employees through base salary and bonus/commission programs and maintained using salary administration guidelines and other pay delivery systems. Critical to this effort is effective communication of all components of pay to earn the most satisfaction from employees, and, ultimately, high productivity and success for the company. THE BIG PICTURE Where do salary surveys fit in? Why do we use them? An organization has many resources to achieve its goals. Even though these resources include land, material, capital, and people, it is only people who make decisions about and do things with the land, material, capital, and the people. An organization’s goals are accomplished only through people. Hence, the major challenge of any organization is to attract, retain, motivate, and align the types and numbers of people it needs to achieve its goals. This is accomplished through a value exchange—a situation in which the company and the employee give value to the other in exchange for value received to achieve their respective self-interests. This notion can be summarized by the phrase, “Value given for value received.” Figure 9.1 shows some of the items involved in the exchange. FIGURE 9.1 Value exchange pie charts. Many items given by the employee to the employer are not quantitatively measurable, but they are present and are very important to the company. The items from the employer to the employee may differ from one employee to the next with regard to what is of value. Indeed, even the relative size of the pieces differs among employees and individuals during a lifetime. For example, a relatively new employee may value growth opportunities more than an employee near retirement. Likewise, an individual might feel pay is very important today but tomorrow, when a new baby joins the family, benefits become more important. This shows that pay is just one component of the exchange. When an employer decides how much to pay an employee, several factors usually are considered: Business strategy. Internal value of job/skill. Market pay. Individual factors. Experience. Education. Performance. Contribution. Skills. Balance with benefits, stock, work environment, etc. What the company can afford. Compensation philosophy. Desired m.
PowerPoint presentation on Variable Pay Viren Patwa
Hello friends my self viren an i gonna share u PowerPoint presentation on Variable Pay with important details highlighted
If u like my presentation pls like an share have a good thank you
establishing strategic pay plans
equity and its impact on pay rates
job evaluation methods
how to create a market-competitive pay plan
pricing managerial and professional jobs
contemporary topics in compensation
9 Salary Surveys A Snapshot Market data obtained from salary surv.docxsleeperharwell
9 Salary Surveys: A Snapshot Market data obtained from salary surveys create the foundation for a viable compensation strategy. When combined with economic statistics and business strategy, they create the infrastructure of an organization’s salary practices. Just as DNA provides information used to construct, identify, and operate the human body, market data obtained from salary surveys are used to construct and operate organizations’ pay programs. Market data evolve from salary surveys that are compiled and analyzed periodically to determine how well the company pays relative to the market. How the company statistically analyzes, charts, and uses the data is a function of its corporate compensation strategy. Then, pay is delivered to employees through base salary and bonus/commission programs and maintained using salary administration guidelines and other pay delivery systems. Critical to this effort is effective communication of all components of pay to earn the most satisfaction from employees, and, ultimately, high productivity and success for the company. THE BIG PICTURE Where do salary surveys fit in? Why do we use them? An organization has many resources to achieve its goals. Even though these resources include land, material, capital, and people, it is only people who make decisions about and do things with the land, material, capital, and the people. An organization’s goals are accomplished only through people. Hence, the major challenge of any organization is to attract, retain, motivate, and align the types and numbers of people it needs to achieve its goals. This is accomplished through a value exchange—a situation in which the company and the employee give value to the other in exchange for value received to achieve their respective self-interests. This notion can be summarized by the phrase, “Value given for value received.” Figure 9.1 shows some of the items involved in the exchange. FIGURE 9.1 Value exchange pie charts. Many items given by the employee to the employer are not quantitatively measurable, but they are present and are very important to the company. The items from the employer to the employee may differ from one employee to the next with regard to what is of value. Indeed, even the relative size of the pieces differs among employees and individuals during a lifetime. For example, a relatively new employee may value growth opportunities more than an employee near retirement. Likewise, an individual might feel pay is very important today but tomorrow, when a new baby joins the family, benefits become more important. This shows that pay is just one component of the exchange. When an employer decides how much to pay an employee, several factors usually are considered: Business strategy. Internal value of job/skill. Market pay. Individual factors. Experience. Education. Performance. Contribution. Skills. Balance with benefits, stock, work environment, etc. What the company can afford. Compensation philosophy. Desired m.
Instructions Answer discussion questions number one and two. Resp.docxcarliotwaycave
Instructions: Answer discussion questions number one and two. Respond to two classmates’ answer for each question.
Question one:
Discuss the basic building blocks of developing a market competitive pay system, including the relationship between internal and external equity. Respond to at least two of your fellow students’ postings.
Respond to classmate 1:
Greetings to all,
Discuss the basic building blocks of developing a market competitive pay system, including the relationship between internal and external equity.
The basic building blocks of developing a market competitive pay system have four steps conducting strategic analyses, assessment of competitors pay practices with compensation surveys, integrating the internal job structure with external market pay rates and determining compensation policies.
· Conducting strategic analyses internal factors are fictional capabilities and financial condition and external market factors industry profile, competitor’s information and long-term growth prospect.
· Assessment of competitors’ pay practices with compensation surveys gathering data from the competitor’s wages, salaries and benefits to establish objectives for the pay system. This system will guide you on how the market is being run that you don’t under or over pay for any positons. All data collected will be used and enables compensation professional to obtain a realistic review of the competitor’s compensation practices. Thus, the objective for developing the pay system should also keep in line with the company’s goals and objectives.
· Integrate internal job structures wit external market pay rates this step will balance out any pay policies that will fit between managing cost and being able to attract and retain good employees.
· Compensation policies, the final step have 3 pay level market lead, market lag and market match:
· Market lead is where the company will compensate their employee higher than the market
· Market lag the company will compensate less than the market
· Market match the company will compensate equal as the market.
Human Resources department along with managers will gather date to create a market completive pay system. Based on what happened internally with compensation and benefits can be a huge effect externally. HR will have to current with the market to attract the right people for the job and be able to retrain them also.
Martocchio, J. J. (2011). Strategic Compensation: A Human Resource Approach 99th Ed.) Hoboken, NJ: Pearson Education, Inc. ISBN 978-0-13-432154-0. Retrieved from Ashford Edu. https://content.ashford.edu/books/Martocchio.7916.16.1/sections/ch07lev1sec1?search=building%20blocks%20#w76559
Respond to classmate 2:
According to Martocchio (2017), “Market-competitive pay systems represent companies’ compensation policies that fit the imperatives of competitive advantage… Compensation professionals build market-competitive compensation systems based on the results of compensation surveys” (cha ...
certified compensation and benefits manager sample-materialVskills
The sample course material covers the following topics as under.
Introduction
Objectives of compensation management
Principles of compensation formulation
Types of wages and wage policies
Procedure and practices for wage determination
Compensation decisions
Compensation benchmarking
Compensation trends and practices in India
Get the complete material. Check more details on the below link.
http://www.vskills.in/certification/Human-Resources/Certified-Compensation-and-Benefits-Manager
As a company, knowing how to structure your salaries can feel like a challenge. You want to offer competitive pay, but also need to work within your budget. Many companies use salary surveys as a way to discover what compensation their competitors are offering.
System of Compensating (Time Wage Plan, Piece Wage Plan, Balanced Wage Plan, Skill Based Pay, Competency Based Pay, Broad-banding, Variable Pay, Merits of Time Wage, Demerits of Time Wage,Time Wage Plan Environment, Merits of Piece Wage, Demerits of Piece Wage, Piece Wage Plan Environment, Merits of Balanced Wage, Factors Affecting Wages)
New Trends in Compensation Management (Group Mediclaim/Insurance Scheme, Personal Accident Insurance Scheme, Company Leased Accommodation,
Recreation/ATM facilities, Corporate Credit Card,
Club memberships, Cellular Phone/Laptop,
Personal Health Care, Loans, Educational Benefits, Regular Get together and other cultural programs, Wedding Day/Birthday Gift, Employee Referral Scheme, Maternity Leave, Paternity Leave, Work-life Balance, Pay Transparency, Broad banding,Variable Pay (Incentive Pay),
Flexible Benefits
Concept of Reward and Total Reward System, Five Elements of Total Rewards (Compensation, Benefits, Work-Life, Performance & Recognition, Developmental & Career Opportunities)
Concept of Compensation, Exploring & Defining Compensation Context (Strategic Compensation, Total Compensation, Extrinsic Compensation, Intrinsic Compensation, Components of Compensation, Factors Influencing Compensation, Wage and Salary, Incentives, Fringe Benefits, Perquisites, Govt. Regulations for Compensation in India, Minimum Wage, Fair Wage, Living Wage, Calculation of Minimum Wages)
Compensation Dimensions (Payment for Work and Performance, Payment for Non-working Days, Loss of Job Income Continuation Benefit, Disability Income Continuation Benefit, Deferred Income, Spouse/Family Income Continuation Benefit, Health, Accident and Liability Protection, Income Equivalent Payments)
Knowledge management assessmenton People, Processes, Products and Organisatio...
Building market competitive compensation system
1. Building Market Competitive Compensation System
By Dr. G C Mohanta, BE, MSc (Engg.), MBA, PhD (Mgt.), Professor, Al-Qurmoshi
Institute of Business Management, Hyderabad, India
Compensation Surveys
In compensation surveys salary and market data are collected. These may include average
salaries, inflation indicators, cost of living indicators, salary budget averages. Companies
may purchase results of surveys conducted by survey vendors or may conduct their own
salary surveys. When purchasing the results of compensation surveys conducted by other
vendors, it should be noted that surveys have been conducted within a specific industry or
across industries as well as within one geographical region or across different geographical
regions. One should know which industry or geographic location - the salary results pertain to
before comparing the results to one’s company.
It is extremely useful to refer compensation surveys when determining salaries. The surveys
lend tremendous credibility and fairness to the process of determining compensation. The
surveys should be current. Reference should be made to them to find the salaries for the job
roles that are the closest match to the roles one is deciding the compensation for. The closer
one can match the role to the type of services, locale and job title of the role one is deciding
compensation for, the more useful the survey is likely to be.
Compensation surveys are carried out:
- To gather and summarize information to monitor movement and developments in the labour
'market'.
– To provide a means for comparison of salaries at the institution.
Types of data gathered in a salary survey include:
- Base salaries
- Salary Ranges
- Starting Salary
- Incentives/Bonuses
- Allowances and Benefits
- Working Hours
- Working Conditions
Choosing Compensation Survey Conducted by Third Parties
The results of compensation surveys conducted by third parties (e.g., associations,
consultants, survey vendors) can be relatively inexpensive compared to the cost of
developing the same results. Surveys conducted by associations and vendors are often have a
large number of participants which results in a more accurate analysis. Before purchasing
survey results, one should make sure the results contain:
(i) Appropriate Job Titles
- Industry-specific occupational titles,
- Little overlap in job titles,
- Use of titles that don't differentiate/specify the duties performed
(ii) Summary
2. (iii) Methodology: Is there a minimum number of responses needed before reporting
results? Data should not be reported for too few incumbents. Need to report
median salary as well as averages. The mean is the average of all numbers divided
by the number of responses. The 'mean' can be affected by extreme values. The
median is the mid-point with half of the responses are above that number and half
fall below. Please note that in salary data, the median tends to be lower than the
mean due to the fact that there is no upper limit to the rates that can be paid for a
job. However, the lower limit is zero. Therefore, the distribution of salaries tends
to be skewed with a few salaries at the extreme high end of the range. Fact: In
salary data, the median will almost always be lower than the mean. Explanation.
(iv) Tabulation of results by Job Title, public/private, industry, geographic region
(v) Breakdowns by size/location/industry
(vi) Data from comparable institutions (size/location/industry)
One should use survey results that will match jobs at one’s organization within the same
industry and/or geographic location.
Integrating Internal Job Structure with External Market Pay Rates
The job evaluation establishes the relative worth of all the jobs in an organization or group
from which a hierarchy of jobs is produced.
The pay structure (salary structure) that follows - sets out the pay grades (or levels) and the
pay ranges, along with the criteria for salary movement within the pay structure. There are
two basic approaches to constructing a pay structure. In the first, every job that has a different
total of job evaluation points will be treated separately and will, in effect, become a particular
pay grade. The other approach is to group jobs that have similar value in the organization
(certain range of point values) into pay grades.
Many employers use market surveys to validate their own job evaluation results. For
example, job evaluation may place purchasing assistant jobs at the same level in the job
structure as some secretarial jobs. But if the market shows vastly different pay rates for the
two types of work, most employers will recheck their evaluation process to see whether the
jobs have been properly evaluated. Some may even establish a separate structure for different
types of work (finance, engineering, law).
For an organization to be able to recruit and retain employees who have the skills required
and who perform well, compensation levels need to be competitive with those in the broader
marketplace. An effective pay structure will reflect the values of the organization as
expressed in the job hierarchy and the market rates of comparable jobs. It is important that
companies set pay rates by using market pay rates as reference points, as paying well below
or well above the typical market rates can create competitive disadvantage for companies.