Compensation_09
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Transcript Compensation_09
Chapter #9
#1 Decide upon how many pay structures
Exempt, Non exempt, by job families, by
geography?
#2 Determine market pay line.
Look #213 Clerks
#3 Define Pay Grades
Will you go
Wider? It will decrease hierarchy
Will you go narrow? It will increase
hierarchy
Look
#215
Establish mid points first
Then maximum then minimum rates
They should overlap so ee can be
promoted without a pay increase
New employees get paid equal to or
more than established employees.
Not a good idea….equity theory
Internal equity
External equity
Green circle rates, lower than minimum
Red circle rates, higher than maximum
Very important!!!!!
Index the relative competiveness of internal
pay rates
Compa – ratios
EE Pay Rate/Pay range midpoint
Compa = 1 means that ee pay =pay range midpoint
Compa = more than 1 means that ee pay is greater than
midpoint
Compa = less than 1 means that ee pay is les than midpoint
Should encourage ees to perform at their
best.
Research does NOT show that merit pay
increases productivity UNLESS it is enough
to be meaningful
Will merit pay evaluations be on
Reoccurring ….Anniversary dates
Nonreocurring…..lump sum
Depends on efficient performance of ee
And ee’s [osition in pay range
Merit pay grid Look #222
Budgets are a percentage of employee’s
◦ Total base pay
5% x $10,000,000
Merits budget will be $500,000
HR has to ask supervisors to indicate distribution
according to performance ratings
Then HR has to calculate the expected number of
ees that fall into each cell./
Design sales depends on
◦ Sales volume?
◦ New Product sales?
◦ Overall sales growth?
Should it be
Salary only?
Salary plus bonus?
Salary plus commission?
Commission plus draw?
Commission only?
Draws Recoverable or Non Recoverable?
Straight
% of sales
Graduated
` Increase sales increased
commission
Multiple tiered
Increase $ only after a certain amount of sales
Depends on TRAINING
Access to Training
Inhouse or outsourced
Certification and Recertifications
SPHR PHR