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Person-based structure: Skill Plans�

Person-based structure

Purpose of the skill-based structure

Support the Strategy & Objectives

Support

workflow

Fair to employees

Motivates behavior towards Organization objectives

Generalist/Multi-skill Pay increases come with certification of new skills, rather than with job assignments.

Specialist

The pay is based on the knowledge of the individual doing the job

Source: Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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“How to”: Skill Analysis

Determining internal skill-based structure

Outcomes of skill-based pay

Source: Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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Person-based structures: Competencies

Are they a skill that can be learned and developed, or are they a trait that includes attitudes and motives?

Core competencies form the foundation for success at any level or job in the organization.

Competency sets translate each core competency into action.

Competency indicators are the observable behaviors that indicate the level of competency within each set. These indicators may be used for staffing and evaluation as well as for pay purposes.

Source: Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

Defining competencies

Purpose of the competency-based structure

Skills

Knowledge

Self-concept

Traits

Motives

Support the Strategy

& Objectives

Support

workflow

Fair

to employees

Motivates

employee behavior

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“How to”: Competency Analysis

Bagian ujung dari gambar 6.6 menunjukkan keputusan dasar dalam menciptakan struktur berbasis kompetensi. dan yang paling penting, adalah untuk mengklarifikasi tujuan dari rencana

Objective

Kompetensi berfungsi sebagai nilai untuk pengembangan pribadi dan mengkomunikasikan arah organisasi. Namun, ketidakjelasan dan subjektivitas menjadikan kompetensi sebagai “fondasi berisiko untuk sistem pembayaran”, atau menjadikan kompetensi sebagai acuan dalam menentukan taraf gaji

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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“How to”: Competency Analysis

What Information to Collect?

Sejumlah skema untuk mengklasifikasikan kompetensi telah diusulkan. Salah satunya menggunakan tiga kelompok sebagai berikut :

Karakteristik pribadi : Memiliki aura “Pramuka” tentang mereka: dapat dipercaya, setia, sopan. Dalam pengaturan bisnis, karakteristik yang relevan (seperti integritas pribadi), kedewasaan penilaian, fleksibilitas, dan rasa hormat terhadap orang lain. Karyawan diharapkan datang dengan karakteristik ini dan kemudian mengembangkan dan menunjukkannya dalam situasi pekerjaan yang semakin kompleks dan ambigu.

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Visioner: Ini adalah kompetensi tingkat tertinggi. Mereka mungkin dinyatakan memiliki perspektif global, mengambil inisiatif dalam menggerakkan organisasi ke arah yang baru, dan mampu mengartikulasikan implikasi bagi organisasi tren di pasar, dalam peristiwa dunia, di komunitas lokal.

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Spesifik organisasi: Di antara dua kelompok di atas terdapat kompetensi yang secara khusus terikat pada organisasi tertentu dan pada fungsi tertentu di mana kompetensi tersebut diterapkan. Mereka umumnya mencakup kepemimpinan, orientasi pelanggan, keahlian fungsional (misalnya, mampu melompati gedung tinggi dan menjelaskan perbedaan antara kompetensi dan faktor kompensasi), dan mengembangkan yang lain—apa pun yang mencerminkan nilai, budaya, dan tujuan strategis perusahaan.

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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PERSON-BASED OR JOB BASED�

Keselarasan internal tercermin dalam struktur

Seperti “evaluasi berbasis pekerjaan”, hasil akhir dari “rencana berbasis orang” adalah struktur kerja internal dalam organisasi. Struktur ini harus mencerminkan kebijakan penyelarasan internal organisasi (longgar versus terkait erat, egaliter versus hierarkis) dan mendukung operasi bisnisnya.

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Selanjutnya, manajer harus memastikan bahwa struktur tetap selaras secara internal dengan menilai kembali pekerjaan/keterampilan/kompetensi bila diperlukan. Kegagalan untuk melakukannya berisiko pada struktur pembayaran yang membuka pintu bagi bias dan perilaku yang berpotensi tidak etis dan salah arah.

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Dalam praktiknya, ketika mengevaluasi pekerjaan nonrutin yang bernilai lebih tinggi, perbedaan antara pendekatan berbasis pekerjaan versus orang menjadi kabur. Fokusnya adalah pada faktor apa (baik pekerjaan dan orang) yang menciptakan nilai bagi organisasi. Orang tersebut mempengaruhi isi pekerjaan dalam pekerjaan manajerial dan profesional. Berbasis keterampilan lebih cocok dengan pekerjaan manufaktur.

INTERNAL ALIGNMENT REFLECTED IN STRUCTURES

(PERSON-BASED OR JOB-BASED)

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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Administering and Evaluating The Plan �

Di hampir semua studi, evaluasi berbasis pekerjaan diperlakukan sebagai perangkat pengukuran; penelitian ini menilai keandalan, validitas, biaya, dan kepatuhannya terhadap hukum dan peraturan. Nilai tambah apa pun oleh evaluasi pekerjaan (misalnya, mengurangi ketidakpuasan gaji, meningkatkan pemahaman karyawan tentang bagaimana gaji mereka ditentukan) sebagian besar telah diabaikan.

RELIABILITY OF JOB EVALUATION TECHNIQUES

Evaluasi yang andal akan menjadi evaluasi di mana evaluator yang berbeda menghasilkan hasil yang sama. Ini penting karena dalam praktiknya, beberapa orang yang berbeda biasanya mengevaluasi pekerjaan. Hasil tidak harus tergantung pada orang yang melakukan evaluasi. Namun demikian, penting untuk diingat bahwa ketika poin evaluasi pekerjaan memang memainkan peran penting dalam penetapan gaji (misalnya, untuk pekerjaan non-benchmark, pekerjaan yang tidak dapat secara langsung dicocokkan dengan pekerjaan survei pembayaran), bahkan keandalan yang tampaknya tinggi antara penilai yang berbeda dapat masih menyisakan ruang untuk gaji yang dihasilkan sangat berbeda. Keandalan dapat ditingkatkan dengan menggunakan evaluator yang akrab dengan pekerjaan dan terlatih dalam proses evaluasi pekerjaan. Beberapa organisasi menggunakan konsensus kelompok untuk meningkatkan keandalan.

ADMINISTERING AND EVALUATING THE PLAN

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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Validity & Acceptability

Validity

Validitas mengacu pada sejauh mana evaluasi menilai apa yang seharusnya—nilai relatif pekerjaan bagi organisasi. Validitas evaluasi pekerjaan telah diukur dengan dua cara :

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(1) tingkat kesepakatan antara peringkat yang dihasilkan dari evaluasi pekerjaan dengan peringkat yang disepakati dari tolok ukur yang digunakan sebagai kriteria, dan (2) dengan “hit rate”— sejauh mana rencana evaluasi pekerjaan cocok (mencapai) struktur gaji yang disepakati untuk pekerjaan patokan. Dalam kedua kasus tersebut, struktur peringkat atau gaji yang telah ditentukan sebelumnya dan disepakati adalah untuk pekerjaan patokan.

INTERNAL ALIGNMENT REFLECTED IN STRUCTURES

(PERSON-BASED OR JOB-BASED)

Acceptability

------------------------------------

Beberapa metode digunakan untuk menilai dan meningkatkan penerimaan karyawan. Yang jelas adalah memasukkan proses banding formal. Karyawan yang percaya bahwa pekerjaan mereka dievaluasi secara tidak benar harus dapat meminta analisis ulang dan/atau evaluasi ulang keterampilan. Sebagian besar perusahaan menanggapi permintaan seperti itu dari manajer, tetapi hanya sedikit yang memperluas prosesnya ke semua karyawan kecuali jika itu adalah bagian dari proses pengaduan yang dinegosiasikan serikat pekerja.

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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Perbedaan terus-menerus dalam pekerjaan yang dipegang oleh pria, wanita, dan orang kulit berwarna, danperbedaan gaji yang menyertainya, telah memusatkan perhatian pada struktur internal sebagai kemungkinan sumber diskriminasi. Banyak dari perhatian ini telah diarahkan pada evaluasi pekerjaansebagai sumber bias potensial terhadap perempuan dan mekanisme untuk mengurangi bias

Sumber bias potensial misal pada gender ini mempengaruhi evaluasi pekerjaan secara tidak langsung, melalui upah saat ini yang dibayarkan untuk pekerjaan. Jika evaluasi pekerjaan didasarkan pada upah yang dibayarkan saat ini dan pekerjaan yang sebagian besar dipegang oleh perempuan dibayar rendah, maka hasilnya hanya mencerminkan bias dalam tingkat upah saat ini. Beberapa rekomendasi berusaha untuk memastikan bahwa rencana evaluasi pekerjaan bebas bias, termasuk yang berikut:

Tentukan faktor dan skala yang dapat dikompensasikan untuk memasukkan konten pekerjaan yang sebagian besar dipegang oleh perempuan. Misalnya, kondisi kerja mungkin termasuk kebisingan dan tekanan mesin kantor dan gerakan berulang yang terkait dengan penggunaan komputer.

Pastikan bahwa bobot faktor tidak secara konsisten bias terhadap pekerjaan yang didominasi oleh perempuan. Apakah faktor-faktor yang biasanya terkait dengan pekerjaan ini selalu diberi bobot yang lebih kecil?

Terapkan rencana dengan cara yang bebas bias. Pastikan deskripsi pekerjaan bebas bias, singkirkan nama incumbent dari proses evaluasi pekerjaan, dan latih beragam evaluator.

INTERNAL ALIGNMENT REFLECTED IN STRUCTURES

(PERSON-BASED OR JOB-BASED)

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

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Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition) Chapter 6. New York: McGraw-Hill Irwin.

THE PERFECT STRUCTURE �

Kenaikan gaji diperoleh melalui promosi ke pekerjaan yang lebih bertanggung jawab di bawah struktur berbasis pekerjaan atau melalui perolehan keterampilan/kompetensi yang lebih bernilai di bawah struktur berbasis orang. Logikanya, karyawan akan fokus pada bagaimana dipromosikan (pengalaman, kinerja) atau pada bagaimana memperoleh keterampilan atau kompetensi yang dibutuhkan (pelatihan, pembelajaran).

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Manajer yang majikannya menggunakan rencana berbasis pekerjaan berfokus pada penempatan orang yang tepat di pekerjaan yang tepat. Peralihan ke rencana berbasis keterampilan/kompetensi membalikkan prosedur ini.

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Kuncinya adalah untuk mengimbangi tingkat yang lebih tinggi dengan produktivitas yang lebih besar. Struktur gaji yang diselaraskan secara internal, apakah terkait secara strategis atau erat, dapat dirancang untuk (1) membantu menentukan pembayaran untuk berbagai macam pekerjaan dalam organisasi, dan (2) memastikan bahwa gaji memengaruhi sikap dan perilaku serta arahan orang-orang. mereka menuju tujuan organisasi.

INTERNAL ALIGNMENT REFLECTED IN STRUCTURES

(PERSON-BASED OR JOB-BASED)

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Kesimpulan

Premis yang mendasari penyelarasan internal adalah bahwa struktur gaji internal perlu diselaraskan dengan strategi dan tujuan bisnis organisasi, desain alur kerja, perhatian terhadap perlakuan adil terhadap karyawan, dan maksud memotivasi karyawan.

Hubungan kerja dalam satu organisasi merupakan bagian penting dari keselarasan internal. Struktur adalah bagian dari jaringan insentif dalam organisasi. Mereka mempengaruhi kepuasan dengan gaji, kesediaan untuk mencari dan menerima promosi ke pekerjaan yang lebih bertanggung jawab, upaya untuk terus belajar dan melakukan pelatihan tambahan, dan kecenderungan untuk tetap bersama majikan. Mereka juga mengurangi timbulnya keluhan terkait gaji.

Teknik untuk membangun struktur yang selaras secara internal mencakup analisis pekerjaan, evaluasi pekerjaan, dan pendekatan berbasis orang untuk rencana berbasis keterampilan/kompetensi. Namun, dalam praktiknya, aspek pekerjaan dan orang digunakan. Meskipun dipandang oleh beberapa orang sebagai beban birokrasi, teknik-teknik ini dapat membantu dalam mencapai tujuan sistem penggajian jika dirancang dan dikelola dengan baik. Tanpa mereka, tujuan pembayaran kita untuk meningkatkan daya saing dan keadilan lebih sulit dicapai. Kita telah membahas teknik yang digunakan untuk membangun keselarasan internal serta pengaruhnya terhadap tujuan kompensasi.

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Defining Person-Focused Pay�

Skills

Knowledge

Person-focused pay plans, generally reward employees for acquiring job related competencies, knowledge, or skills rather than for demonstrating successful job performance

Two basic types of person-focused pay:

Pay for knowledge: reward workers for successfully learning specific curricula
Skills based pay: increase the workers’ pay as they master new skills

Person-focused pay plans to reward employees for acquiring new skills (horizontal & vertical skills), or a greater depth of knowledge or skills.

Horizontal skills: skills at the same level of responsibility

Vertical skills: skills that are considered supervisory

Usage of Person-Focused Pay Programs�

More than half of the companies known to be using this kind of pay system employ between 150 and 2,000 employees

One study found that a skill- based pay plan in a manufacturing setting increased plant productivity by 58 %

These programs are most commonly found in continuous process settings (e.g., manufacturing companies that use assembly lines where one employee’s job depends on the work of at least one other employee).

Person-focused pay programs work well at manufacturing companies that organize work flow around high-performance work teams in which employees are expected to learn both functional and managerial tasks

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Varieties of Person-Focused Pay Programs

Reason to Adopt Person-Focused Pay Programs�

Technological Innovation

technology leads to the automation of more tasks, employers combine jobs and confer broader responsibilities on workers

Increase Global Competition

to sustain competitive advantage, companies must provide their employees with leading- edge skills and encourage employees to apply their skills proficiently

Job Point Accrual Model

encourages employees to develop skills and learn to perform jobs from different job families.

Job-point accrual methods create organizational flexibility and promote company goals by assigning a relatively greater number of points to skills that address key company concerns (e.g., customer relations). The more points employees accrue, the higher their core compensation level will be

Cross-Departmental Model

promote staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departments.

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Varieties of Person-Focused Pay Programs

Stair Step Model

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Varieties of Person-Focused Pay Programs

The Skill Blocks Model

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Contrasting Person-Focused Pay With Job-Based Pay�

Job-Based Pay

compensates employees for jobs they currently perform
reward employees for the work they have done as specified in their job descriptions or periodic goals
apply to an organization-wide context because employees earn base pay rates for the jobs they perform.

Person-Focused Pay

compensates employees for developing the flexibility and skills to perform a number of jobs effectively
reward employees on their potential to make positive contributions to the workplace based on their successful acquisition of work related skills or knowledge.
apply in more limited contexts because not all jobs can be assessed based on skill or knowledge

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Advantages & Disadvantages �Person-Focused Pay Programs

can provide with both job enrichment and job security
Job enrichment refers to a job design approach that creates more intrinsically motivating and interesting work environments
Companies can enrich jobs by combining narrowly designed tasks so an employee is responsible for producing an entire product or service

Advantages to Employee

Advantages to Employers

can influence both the quantity and the quality of an employee’s work
can usually rely on leaner staffing because multi skilled employees are better able to cover for unexpected absenteeism, family or medical leave, and training sessions that take individual employees away from their work
provide companies with greater flexibility in meeting staffing demands at any particular time.

employers feel that the main drawback of person-focused pay systems is that hourly labor costs, training costs, and overhead costs can all increase
may not mesh well with existing incentive pay systems.
The program depend, in large part, on well-designed training programs.
companies struggle with determining the monetary value of skill and knowledge sets.

Disadvantages

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Summary

Person-focused pay, penghargaan kepada karyawan terkait kompetensi, pengetahuan, atau keterampilan untuk peningkatan kinerja pekerjaan (pay for knowledge & skills based pay)

Person-focused pay terbukti meningkatkan produktivitas di manufacturing hingga 58%

Alasan untuk mengadopsi program person-focused pay ini karena ilmu pengetahuan dan teknologi terus berkembang, pekerjaan terotomatisasi, sehingga perusahaan mendorong pegawainya untuk terus meningkatkan skill & knowledge-nya guna mempertahankan keunggulan kompetitif perusahaan.

Ada 4 (empat) variasi program Person-focused pay, yaitu Model Job Point Accrual, Model Cross Deparmental, Model Stair Step, dan Model Skill Blocks

Perbandingan Person-focused pay dan Job-Based Pay:
Person-focused pay sebagai reward pengembangan skills dan knowledge, sementara Job-based pay diberikan atas pekerjaan yang mereka lakukan
Person-focused pay berlaku dalam konteks yang lebih terbatas karena tidak semua pekerjaan dapat dinilai berdasarkan keterampilan atau pengetahuan, sedangkan Job-based pay lebih luas karena karyawan mendapatkan tingkat gaji pokok untuk pekerjaan yang mereka lakukan.

Keuntungan Person-Focused Pay: job enrichment & job security, pegawai multi skill

Kekurangan Person-Focused Pay: biaya overhead meningkat

Source: Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition) Chapter 5. New Jersey: Pearson

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Fong, E. A. (2010). CEO pay fairness as a predictor of stakeholder management. Journal of Business Research, 63(4), 404-410.

Journal by Eric A Fong, 2010�

Introduction

CEO Salaries unfair relative to average worker pay with disparities ratio 120:1 (Fong 2010; Crystal, 1991), in 2001 disparities ratio 400:1 (Fong, 2010; Gerhart and Rynes, 2003).

Firm, through CEO’s decision, has duty to satisfy the stake holder through stakeholder management (SM)

In Fact,

fair, or unfair, CEO pay may influence the CEO's decisions towards their subordinates' wages; when CEOs are under- or overpaid, employees are also under- or overpaid (Fong ,2010; Wade et al., 2006)

CEO Pay Fairness as a Predictor of Stakeholder Management

Theory

Fairness to CEO

CEO’s Decision

Stakeholder Management Community Relations, Employee Relations, Diversity Issues, Environmental Impact, And Customer Relations.

Firm benefits through relationships with SM, which are strongly influenced by CEO’s Decision.

Fairness using equity and social comparison theory

Stakeholder Management

(Jones & Wick, 1999)

Firm Benefit

(Freeman, 1984)

(Jones & Wick, 1999)

(Colquitt et al., 2001)

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Hypothesis

Model

Measurement

Hypothesis 1. There will be a relationship between CEO pay fairness and future SM such that future SM will decrease when CEOs are underpaid and increase when CEOs are overpaid.

Fairness plays a primary role in individual perceptions and actions, which may impact reactions to SM (Aguilera et al., 2007)
CEOs' decision-making is driven by their fair, or unfair, pay rather than their absolute level of pay (Wade et al, 2006; Watson et al., 1996)
CEO's pay fairness also may affect their resource allocation decisions towards stakeholders in the form of SM (Wade et al, 2006; Watson et al., 1996)

Hypothesis 2. The relationship between CEO pay fairness and future SM will be stronger as insider ratio increases

CEOs with greater control relative to the board of directors (situations where the board has more inside directors) receive higher pay than predicted by traditional economic theories
With more outside directors, boards control the resources used for SM, which means CEOs should have less influence over SM (Coffey and Wang, 1998; Johnson and Greening, 1999)

Future SM

Stakeholder Management measured by S&P Rating from KLD database

CEO Pay Fairness measured by RESIDUAL from CEO pay equation

Log(CEO Total Pay)= β1 ⁎Experience + β2 ⁎ CEO age +β3 ⁎ CEO tenure + β4 ⁎ Inside CEO + β5 ⁎ Firm Size + β6 ⁎ Firm Performance (ROA) + β7 ⁎ Outsider Ratio + β8 ⁎ Duality + β9 ⁎ Manager-controlled + β10 ⁎ Owner-managed

Board of Director

CEO pay fairness

Fong, E. A. (2010). CEO pay fairness as a predictor of stakeholder management. Journal of Business Research, 63(4), 404-410.

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Results

Conclusion

H1 (accepted) CEO pay fairness is related to SM (p<.05). The positive relationship is consistent with Hypothesis 1, when CEOs are underpaid, future SM decreases and when CEOs are overpaid, future SM increases

H2 (accepted) Relationship between CEO pay fairness and SM is stronger when there are more insiders on the board (pb.05).

Sumber: Fong, 2010

Consistent with stakeholder theory, future SM may be determined by fairness (when a CEO is overpaid, SM increases, when a CEO is underpaid, SM decreases)
Consistent with Wade et al. (2006) CEOs may use their control over firm resources to enrich their subordinates and thus create a fairer compensation structure relative to the CEO's over- or underpayment, this study shows that CEOs may influence SM in ways that reflect the CEO's own over- or underpayment.
As the insider ratio of the board of directors increases, the relationship between CEO pay fairness and future SM is stronger.
The nature of the market leads to continuing increases in CEO pay (Bebchuk and Fried, 2004), so that firms should minimize pay deviations from the CEO labor market rate or risk CEO motivational and retention problems.

Relation this article with person focused pay:

Use market basis for skill valuation
Work flexibility
CEO are likely to use social comparisons to form judgments of fairness relating to their pay (Ezzamel and Watson, 1998).
In the article CEO pay measured by person basis, such as CEO’s age, experience and tenure.

Fong, E. A. (2010). CEO pay fairness as a predictor of stakeholder management. Journal of Business Research, 63(4), 404-410.

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Mahajan, A. (2012). An experiential approach to developing a pay structure: Insights from teaching compensation management. The International Journal of Management Education, 10(1), 2-11.

Journal by Ashish Mahajan, 2012�

Introduction

This paper highlights the importance of using an experiential approach to teaching compensation management. Using this approach, a multi-phase exercise was designed to help students in understanding the process of developing a job-based pay structure (Mahajan, 2012).

An experiential approach is especially useful for teaching compensation management as it helps students in understanding complex topics without losing student interest (Madsen & Turnbull, 2006)

Objectives

To describe a multi-phase exercise designed to help students in understanding the process of developing a pay structure
To empirically assess whether student learning increased as a result of participating in this exercise.

An experiential approach to developing a pay structure: Insights from teaching compensation management

Theory

Although new concepts such as skill and competency-based pay have changed the nature of compensation, a job still holds its place as an important element in compensation management (Kilgour, 2008)

WorldatWork organization indicate more prevalence of job-based pay structures than skill or competency-based pay structures (WorldatWork, 2003, 2009).

Job based pay

Internally Consistent

Job Evaluation

Method for doing job evaluation

Ranking
Classification
Factor comparison
Point method

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Overview of the Exercise

First Phase : Developing job descriptions

Second Phase: Doing job evaluation

Third Phase: Analyzing compensation survey data

Final Phase: Integrating internal consistency and external competitiveness

Job Analysis

Job Description

Job Specification

The first phase began by dividing the students into groups of three to four students per group and asking them to discuss the advantages and disadvantages of various methods of doing job analysis\

Then each group was given one of the six job summaries and was asked to write a job description

First, teacher discussed with the students the concept of job evaluation and different methods of doing job evaluation
Each group was given the six job descriptions that were developed in the first phase
Half of the groups were asked to use the paired-comparison ranking method to evaluate the jobs and the other half used the point method to evaluate the jobs

Formulating an internally consistent and externally competitive job-based pay structure

Using the results from the analyses of compensation from phase 3, ask the students to develop pay grade, calculate pay range, and range overlap

Explained the process of doing a compensation survey, organizations can use this information to decide their pay policy
Use the job evaluation scores from the second phase and compare them with the external market\
One dataset containing hypothetical compensation data of five companies was prepared. These companies were from one industry and formed the relevant market for the remaining one company.
Analyze compensation data and use it to determine an organization’s pay policy

Mahajan, A. (2012). An experiential approach to developing a pay structure: Insights from teaching compensation management. The International Journal of Management Education, 10(1), 2-11.

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Results

Conclusion

The students learned to summarize the information collected through job analysis and extract meaningful information in order to develop job descriptions. This is an important skill not only from a compensation standpoint but also from a general management perspective

The students particularly enjoyed this part of the exercise and were eager to make presentations and discuss their output.

All the phases facilitate building of analytical skills. The students analyzed compensation data and made some sense out of it.

Reinforce the concept of bounded rationality as students have to use limited information to make decisions within a given time frame.

Overall, this exercise increased students’ understanding of developing a job-based pay structure

From the article, we know that all the phases helped us integrated pay structure in the bigger picture.
The student also have the opportunity to solve real world problem, practical application of concept learned in the class.

Although new concepts such as skill and competency-based pay have changed the nature of compensation, a job still holds its place as an important element in compensation management (Kilgour, 2008)
Both Job and Person based pay using external comparison with market based analysis.
Job based pay, applicable for non managerial worker that has rigid job.
Combination of job and person based pay, applicable for managerial worker that has flexible and dynamic job.

Mahajan, A. (2012). An experiential approach to developing a pay structure: Insights from teaching compensation management. The International Journal of Management Education, 10(1), 2-11.

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Thanks!

Any questions ?

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Daftar Pustaka

Fong, E. A. (2010). CEO pay fairness as a predictor of stakeholder management. Journal of Business Research, 63(4), 404-410.

Mahajan, A. (2012). An experiential approach to developing a pay structure: Insights from teaching compensation management. The International Journal of Management Education, 10(1), 2-11.

Martocchio, Joseph J. (2017). Strategic Compensation: A Human Resource Management Approach (9th edition). New Jersey: Pearson

Milkovich, G., Newman, J., Gerhart, B. (2017). Compensation (12th. edition). New York: McGraw-Hill Irwin.