Dessler 11

Human Resource
Management
1
ELEVENTH EDITION
GARY DESSLER
Part 4 | Compensation
Chapter
11
2008 Prentice Hall, Inc.

All rights reserved.
Establishing Strategic Pay Plans

PowerPoint Presentation by Charlie Cook
The University of West Alabama
After studying this chapter, you should be able to:

1. List the basic factors in determining pay rates.
2. Explain in detail how to establish pay rates.
3. Explain how to price managerial and professional jobs.
4. Discuss competency-based pay and other current
trends in compensation.
2008 Prentice Hall, Inc. All
112
Basic Factors in Determining

Pay Rates
Employee
Compensation
Direct Financial
Payments
Indirect Financial
Payments
113
Legal Considerations in Compensation

Davis-Bacon Act (1931)
Equal Pay Act (1963)
Walsh-Healey Public
Contract Act (1936)
Employee Retirement
Income Security Act (ERISA)
Title VII of the 1964

Civil Rights Act
Employee
Compensation
Age Discrimination in
Employment Act
Fair Labor Standards Act

(1938)
Americans with
Disabilities Act
The Family and Medical

Leave Act
The Social Security Act of

1935 (as amended)
Workers Compensation
114
Equity and Its Impact on Pay Rates
Forms of Equity
External
Equity
Internal
Equity
Individual
Equity
Procedural
Equity
115
Addressing Equity Issues

Salary Surveys
Job Analysis and

Job Evaluation
Methods to
Address Equity
Issues
Performance Appraisal
and Incentive Pay
Communications, Grievance
Mechanisms, and Employees
Participation
116
The Salary Survey
Step 1. The Wage Survey:

Uses for Salary Surveys
To price
benchmark
jobs
To marketprice wages
for jobs
To make
decisions
about benefits
117
Sources for Salary Surveys
Sources of Wage and

Salary Information
Employer SelfConducted
Surveys
Consulting
Firms
Professional
Associations
Government
Agencies
The
Internet
118
Establishing Pay Rates (contd)

Skills
Step 2. Job Evaluation:

Identifying
Compensable Factors
Effort
Responsibility
Working Conditions
119

Methods for
Evaluating Jobs
Ranking
Job
Classification
Point
Method
Factor
Comparison
1110
Point Method
Step 3. Group
Similar Jobs
into Pay Grades
Ranking Method
Classification Methods
1111
Pricing Managerial and Professional Jobs

Compensating Executives
and Managers
Base
Pay
Short-term
Incentives
Long-Term
Incentives
Executive
Benefits and
Perks
1112
Competency-Based Pay (contd)

Why Use CompetencyBased Pay?
Support HighPerformance
Work Systems
Support
Strategic Aims
Support
Performance
Management
1113
Other Compensation Trends

Broadbanding
Consolidating salary grades and ranges into just a
few wide levels or bands, each of which contains a

relatively wide range of jobs and salary levels.
Pro and Cons
More flexibility in assigning workers to different job grades.
Provides support for flatter hierarchies and teams.
Promotes skills learning and mobility.
Lack of permanence in job responsibilities can be unsettling

to new employees.
1114
KEY TERMS
employee compensation
direct financial payments
indirect financial payments
Davis-Bacon Act (1931)
Walsh-Healey Public Contract Act
(1936)
Title VII of the 1964 Civil Rights Act
Fair Labor Standards Act (1938)
Equal Pay Act (1963)
Employee Retirement Income
Security Act (ERISA)
salary compression
salary survey
benchmark job
job evaluation
compensable factor
ranking method
job classification (or grading) method
classes
grades
grade definition
point method
factor comparison method
pay grade
wage curve
pay ranges
competency-based pay
competencies
broadbanding
comparable worth
1115
Human Resource
Management
ELEVENTH EDITION
GARY DESSLER
Part 4 | Compensation
Appendix for
Chapter 11
Quantitative Job Evaluation Methods
2008 Prentice Hall, Inc.

All rights reserved.
PowerPoint Presentation by Charlie Cook

The University of West Alabama
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 factors
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
1117

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Human Resource

2008 Prentice Hall, Inc.

Establishing Strategic Pay Plans

After studying this chapter, you should be able to:

2008 Prentice Hall, Inc. All

Basic Factors in Determining

2008 Prentice Hall, Inc. All

Legal Considerations in Compensation

Equal Pay Act (1963)

Title VII of the 1964

Fair Labor Standards Act

The Family and Medical

The Social Security Act of

2008 Prentice Hall, Inc. All

Equity and Its Impact on Pay Rates

2008 Prentice Hall, Inc. All

Addressing Equity Issues

Job Analysis and

2008 Prentice Hall, Inc. All

The Salary Survey

Step 1. The Wage Survey:

2008 Prentice Hall, Inc. All

Sources for Salary Surveys

Sources of Wage and

2008 Prentice Hall, Inc. All

Establishing Pay Rates (contd)

Step 2. Job Evaluation:

2008 Prentice Hall, Inc. All

Establishing Pay Rates (contd)

2008 Prentice Hall, Inc. All

Establishing Pay Rates (contd)

2008 Prentice Hall, Inc. All

Pricing Managerial and Professional Jobs

2008 Prentice Hall, Inc. All

Competency-Based Pay (contd)

2008 Prentice Hall, Inc. All

Other Compensation Trends

few wide levels or bands, each of which contains a

More flexibility in assigning workers to different job grades.

Provides support for flatter hierarchies and teams.

Promotes skills learning and mobility.

Lack of permanence in job responsibilities can be unsettling

2008 Prentice Hall, Inc. All

2008 Prentice Hall, Inc. All

Quantitative Job Evaluation Methods

2008 Prentice Hall, Inc.

PowerPoint Presentation by Charlie Cook

Quantitative Job Evaluation Methods

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