Professional Documents
Culture Documents
FIGURE 11–3
Independent Contractor
Corporate Policies, Competitive Strategy,
and Compensation
• Aligned Reward Strategy
The employer’s basic task:
To create a bundle of rewards—a total reward package—that
specifically elicits the employee behaviors that the firm needs
to support and achieve its competitive strategy.
The HR or compensation manager along with top management
creates pay policies that are consistent with the firm’s strategic aims.
This is a summary chart of the key grade level criteria for the GS-7 level of
clerical and assistance work. Do not use this chart alone for classification
purposes; additional grade level criteria are in the Web-based chart.
Job Evaluation Methods: Point Method
• A quantitative technique that involves:
Identifying the degree to which each compensable factor is present
in the job.
Awarding points for each degree of each factor.
Calculating a total point value for the job by adding up the
corresponding points for each factor.
FIGURE 11–6
Wage Structure
TABLE 11–4 Federal Government Pay Schedule: Grades GS-8, GS-9, GS-
10, GS-11 for Dallas-Fort Worth, Texas
EFFECTIVE JANUARY 2007
G
S-
8 41,246 42,621 43,997 45,372 46,747 48,122 49,498 50,873 52,248 53,623
G
S-
9 45,556 47,074 48,593 50,111 51,630 53,148 54,666 56,185 57,703 59,221
G
S-
10 50,169 51,841 53,513 55,185 56,857 58,529 60,201 61,873 63,545 65,218
G
S-
11 55,119 56,957 58,794 60,632 62,469 64,307 66,145 67,982 69,820 71,657
FIGURE 11–7
Compensation
Administration
Checklist
FIGURE 11–8
Broadbanded Structure and How It Relates to Traditional Pay Grades and
Ranges
Other Compensation Trends (cont’d)
• Comparable Worth
Refers to the requirement to pay men and women equal wages for
dissimilar jobs that are of comparable (rather than strictly equal)
value to the employer.
Seeks to address the issue that women have jobs that are dissimilar
to those of men and those jobs are often consistently valued less than
men’s jobs.
The Pay Gap
• Factors Lowering the Earnings of Women:
Women’s starting salaries are traditionally lower.
Salary increases for women in professional jobs do not reflect their
above-average performance.
In white-collar jobs, men change jobs more frequently, enabling
them to be promoted to higher-level jobs over women with more
seniority.
In blue-collar jobs, women tend to be placed in departments with
lower-paying jobs.
Board Oversight of Executive Pay
• Factors Influencing Executive Compensation
FASB requirements for expensing of stock options at fair market
value.
Increased SEC reporting requirements for compensation-related
information.
Increased executive liability for accuracy in corporate financial
reporting under the Sarbanes Oxley Act.
Shareholder activism protesting excessive executive compensation
due to lack of independence by executive board compensation
committees.
1
1 is high, 4 is low.
TABLE 11–A2 Ranking Key Jobs by Wage Rates1
Requirements
Hourly Working
Wage Mental Physical Skill Responsibility Conditions
Welder $9.80 4.00(1) 0.40(4) 3.00(1) 2.00(1) 0.40(2)
Crane operator $5.60 1.40(3) 2.00(1) 1.80(3) 0.20(4) 0.20(4)
Punch press
operator $6.00 1.60(2) 1.30(3) 2.00(2) 0.80(2) 0.30(3)
Security guard $4.00 1.20(4) 1.40(2) 0.40(4) 0.40(3) 0.60(1)
1
1 is high, 4 is low.
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
1
Amount of each factor based on step 3.
2
Ratings based on distribution of wages to each factor from step 5.
TABLE 11–A4 Job (Factor) Comparison Scale
Mental Requirements Physical Requirements Skill Requirements Responsibility Working Conditions
0.20 Crane Operator Crane Operator
0.50
0.70
0.90
1.00 (Plater)
1.10
1.20 Sec. Guard
1.70 (Plater)
1.90
2.20 (Plater)
2.60
2.80
3.00 Welder
3.20
3.40
3.60
3.80
4.00 Welder
Decision
making 41 82 123 164 204
Problem
solving 35 70 105 140 174
Knowledge 24 48 72 96 123