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Topic7.1c2 compensation how_to_createa_market-competitive_payplannew


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Topic7.1c2 compensation how_to_createa_market-competitive_payplannew

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Topic7.1c2 compensation how_to_createa_market-competitive_payplannew

  1. 1. HUMAN RESOURCES MANAGEMENT HOW TO CREATE A MARKET- COMPETITIVE PAY PLAN Dyah Pramanik, MM [ ] Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Welcome to
  2. 2. Quantitative Job Evaluation Methods • Factor Comparison Job Evaluation Method Step 1. Obtain job information Step 2. Select key benchmark jobs Step 3. Rank key jobs by factor Step 4. Distribute wage rates by factor Step 5. Rank key jobs according to wages assigned to each factor Step 6. Compare the two sets of rankings to screen out unusable key jobs Step 7. Construct the job-comparison scale Step 8. Use the job-comparison scale
  3. 3. 8–3 1. Mental Requirements Either the possessionof and/or the active application of the following: • (inherent) Mental traits, such as intelligence, memory, reasoning, facility in verbal expression, ability to get along with people, and imagination. • (acquired) General education, such as grammar and arithmetic; or general information as to sports, world events,etc. • (acquired) Specialized knowledge, such as chemistry, engineering, accounting, advertising, etc.
  4. 4. 2. Skill Requirements • (acquired) Facility in muscular coordination, as in operating machines, repetitive movements, careful coordinations, dexterity, assembling, sorting, etc. • (acquired) Specific job knowledge necessary to the muscular coordination only; acquired by performance of the work and not to be confused with general education or specialized knowledge. It is very largely training in the interpretation of sensory impressions. Examples • In operating an adding machine, the knowledge of which key to depress for a subtotal would be skill. • In automobile repair, the ability to determine the significance of a knock in the motor would be skill. • In hand-firing a boiler, the ability to determine from the appearance of the firebed how coal should be shoveled over the surface would be skill.
  5. 5. 3.Physical Requirements • Physical effort, such as sitting, standing, walking, climbing, pulling, lifting, etc.; both the amount exercised and the degree of the continuity should be taken into account. • Physical status, such as age, height, weight, sex, strength, and eyesight.
  6. 6. 4.Responsibilities A. For raw materials, processed materials,tools, equipment, and property. B. For money or negotiable securities. C. For profits or loss, savings or methods’ improvement. D. For public contact. E. For records. F. For supervision. G. Primarily the complexity of supervision given to subordinates; the number of subordinates is a secondary feature. Planning, direction, coordination,instruction,control, and approval characterize this kind of supervision. H. Also, the degree of supervision received. If Jobs A and B gave no supervision to subordinates, but A receivedmuch closer immediate supervision than B, then B would be entitled to a higher rating than A in the supervision factor. To summarize the four degrees of supervision: Highest degree—gives much—gets little High degree—gives much—gets much Low degree—gives none—gets little Lowest degree—gives none—gets much
  7. 7. 5.Working Conditions • Environmental influences such as atmosphere, ventilation, illumination, noise, congestion, fellow workers, etc. • Hazards - from the work or its surroundings • Hours
  8. 8. TABLE 11–A1 Ranking Key Jobs by Factors1 11 is high, 4 is low. Mental Requirements Physical Requirements Skill Requirements Responsibility Working Conditions Welder 1 4 1 1 2 Crane operator 3 1 3 4 4 Punch press operator 2 3 2 2 3 Security guard 4 2 4 3 1
  9. 9. TABLE 11–A1 Ranking Key Jobs by Factors1 11 is high, 4 is low. Mental Requirements Physical Requirements Skill Requirements Responsibility Working Conditions Welder 1 4 1 1 2 Crane operator 3 1 3 4 4 Punch press operator 2 3 2 2 3 Security guard 4 2 4 3 1
  10. 10. TABLE 11–A3 Comparison of Factor and Wage Rankings Mental Requirements Physical Requirements Skill Requirements Responsibility Working Conditions A1 $2 A1 $2 A1 $2 A1 $2 A1 $2 Welder 1 1 4 4 1 1 1 1 2 2 Crane operator 3 3 1 1 3 3 4 4 4 4 Punch press operator 2 2 3 3 2 2 2 2 3 3 Security guard 4 4 2 2 4 4 3 3 1 1 1Amount of each factor based on step 3. 2Ratings based on distribution of wages to each factor from step 5.
  11. 11. TABLE 11–A4 Job (Factor)-Comparison Scale Value Mental Requirements Physical Requirements Skill Requirements Responsibility Working Conditions 0.20 Crane Operator Crane Operator 0.30 Punch Press Operator 0.40 Welder Sec. Guard Sec. Guard Welder 0.60 Sec. Guard 0.80 Punch Press Operator 1.00 (Plater) 1.20 Sec. Guard 1.30 Punch Press Operator 1.40 Crane Operator Sec. Guard (Inspector) (Plater) 1.50 (Inspector) (Inspector) 1.60 Punch Press Operator 1.70 (Plater) 1.80 Crane Operator (Inspector) 2.00 Crane Operator Punch Press Operator Welder 2.20 (Plater) 2.40 (Inspector) (Plater) 3.00 Welder 4.00 Welder
  12. 12. The Point Method of Job Evaluation Step 1. Determine clusters of jobs to be evaluated Step 2. Collect job information Step 3. Select compensable factors Step 4. Define compensable factors Step 5. Define factor degrees Step 6. Determine relative values of factors
  13. 13. FIGURE 11–A2 Example of One Factor (Complexity/Problem Solving) in a Point Factor System Level Point Value Descriptionof Characteristics and Measures 0 0 Seldom confronts problems not covered by job routine or organizational policy; analysis of data is negligible. Benchmark: Telephone operator/ receptionist. 1 40 Follows clearly prescribed standard practice and demonstrates straightforward application of readily understood rules and procedures. Analyzes noncomplicated data by established routine. Benchmark: Statistical clerk, billing clerk. 2 80 Frequently confronts problems not covered by job routine. Independent judgment exercised in making minor decisions where alternatives are limited and standard policies established. Analysis of standardized data for information of or use by others. Benchmark: Social worker, executive secretary. 3 120 Exercises independent judgment in making decisions involving nonroutine problems with general guidance only from higher supervision. Analyzes and evaluates data pertaining to nonroutine problems for solution in conjunction with others. Benchmark: Nurse, accountant, team leader. 4 160 Uses independent judgment in making decisions that are subject to review in the final stages only. Analyzes and solves nonroutine problems involving evaluation of a wide variety of data as a regular part of job duties. Makes decisions involving procedures. Benchmark: Associate director, business manager, park services director. 5 200 Uses independent judgment in making decisions that are not subject to review. Regularly exercises developmental or creative abilities in policy development. Benchmark: Executive director.
  14. 14. TABLE 11–A5 Evaluation Points Assigned to Factors and Degrees First-Degree Points Second-Degree Points Third-Degree Points Fourth-Degree Points Fifth-Degree Points Decision making 41 82 123 164 204 Problem solving 35 70 105 140 174 Knowledge 24 48 72 96 123
  15. 15. Copyright © 2011 Pearson Education,Inc. publishing as Prentice Hall 11–15 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.