Pay level refers to the average pay for a job including base salary, bonuses, benefits, and other compensation. It is determined by internal factors like job worth and external factors like market wages. Strategic compensation aims to motivate employees through intrinsic and extrinsic rewards to achieve business goals. Compensation elements like merit pay, job families, job structure, and pay-for-performance plans are used to determine appropriate pay levels. The pay mix is the combination of different pay types that make up total compensation. Organization culture encompasses underlying values and beliefs that guide workplace behaviors.

1. COMPENSATION & BENEFITS
Hemankashi Bharmani
HR Specialization

2. PAY LEVEL
Pay set relative to employees working
on similar jobs in other organization.
- McGraw Hill
Pay Level refers to the average of the
array of rates paid by an employer.
∑ Base + Bonuses + Benefits +
Options
∑ Employees
- Academic definition

3. Pay Level refers to the range of
salary paid to employees working on
similar job.
- Hemanshi M. Bharmani
INTERNAL EXTERNAL
FACTORS FACTORS
• Compensation • Conditions of the
Strategy of labor market
organization PAY • Area wage rates
• Worth of job LEVELS • Cost of living
• Employee’s • Collective
relative worth bargaining
• Employer's • Legal
ability to pay requirements

4. STRATEGIC
COMPENSATION
Strategic compensation represents both intrinsic and
extrinsic rewards employees receive for performing
their job.
- Intrinsic Compensation reflects employees
psychological mind-sets that results from performing
their job.
- Extrinsic Compensations includes both monetary and
non monetary rewards.
- Joseph J. Martocchio
It defines the intentions of the organization on
reward policies, processes and practices required
to ensure that it has the skilled, competent and
well-motivated workforce it needs to achieve its
business goals.
- Hemanshi M. Bharmani

5. Strategic Compensation -
Example
IBM –
In 1990’s IBM CEO, believed that
employees have become too
complacent.
He instituted four new incentives and
other pay policies to focus his employees
more on the competition.
- Pay to market
- Fewer, “broadband” jobs
- Let managers manage
- Incentivize employees

6. MERIT PAY
Merit Pay or Merit Raise is any salary
increase awarded to an employee based
on his or her individual performance.
- Gary Desseler
Merit Pay is defined as basing an
employee’s salary on his or her
performance, over a predetermined
period, and according to an agreed upon
criteria.
-Hemanshi M.
Bharmani

7. JOB FAMILIES
Job Family is defined as two or more class
series within an organization that have
related or common work content.
- Example: Administration, Occupation
(secretarial, clerical).
- Richard Henderson
A job family is defined as a series of
progressively higher, related jobs
distinguished by levels of
knowledge, skills, and abilities
(competencies) and other factors, and
providing promotional opportunities over time.
- Hemanshi M. Bharmani

8. Why Job Families are made?
It is designed to take advantage of successful human resources strategies suc
- General Job Description
- Broad salary structure
- Competency/skill based salary management
- Comprehensive position management

9. JOB STRUCTURE
Job Structure is comprised of jobs that
are slotted into Job Families and Job
Sub Families based on the nature of
the job.
- Job Family is a group of jobs in which the work
performed is of a similar nature.
- Job Sub Family is a group of jobs in which the
work performed is of a similar nature and within a
similar function.
- Boston University

10. The Commonwealth's job organization structure
consists of seven Occupational Families. The
Occupational Families are divided into Career
Groups. Career Groups are comprised of Roles.
An Occupational Family is a broad grouping of jobs
that share similar vocational characteristics.
A Career Group is a sub-group of an Occupational
Family.
A Role describes a broad group of occupationally
related positions that represent different levels of
work or career progression.
Occupational Career Roles
Families Group
- Hemanshi M. Bharmani

11. COMPENSABLE
FACTORS
A compensable factor is any job
element that is considered essential to
properly evaluating the amount of pay
that should be rendered as part of
employment.
-
http://www.wisegeek.com
Common job characteristics that an
organization is willing to pay for, such
as skill, effort, responsibility, and
working conditions.
- Hemanshi M.

12. PAY-FOR-PEFORMANCE
PLAN
pay that varies with some measure of
individual or organizational performance
also called variable pay plans these plans
have a positive impact on performance if
they are designed well.
Short term
Pay-for-Performance
Plan
Lump-
Individua Individual
Merit Sum
l Spot Incentive
Pay Bonuse
Awards s
s
- McGraw Hill

13. Any plan that ties pay to productivity
or profitability is know as pay for
performance plan.
- Hemanshi M.
Bharmani

14. PAY MIX
Pay Mix are the various types of
payments, or pay forms, that make up
total compensation.
-Milkovich & Newman
The combination of various types of
rewards - such as base pay,
performance incentives, stock options,
and benefits - that an individual receives.
Different types of jobs have a different
pay mix; and the pay mix varies from
company to company.
- Hemanshi M.
Bharmani

15. ORGANIZATION
CULTURE
“A pattern of shared basic assumptions that
a group has learned as it solved its
problems of external adaptation and
internal integration, that has worked well
enough to be considered valid and
therefore, to be taught to new members as
the correct way to perceive, think, and feel
in relation to those problems.”
- Schein’s
Organization Culture refers to the underlying
values and beliefs that guide workplace
behaviors.

16. Bibliography
 http://highered.mcgraw-
hill.com/sites/0073381462/student_view0/glossary.
html
 Gary Dessler / Biju Varkkey
 Strategic Compensation - Joseph J. Martocchio
 Compensation Management in a knowledge
based world - Richard Henderson
 Compensation Management – Mousumi S.
Bhattacharya
 Organization Culture - Edgar Schein