Establishing strategic pay plan

Developing Pay Ranges Pay ranges often appear as vertical boxes within each grade, showing minimum, maximum, and midpoint pay rates for that grade. It involves identifying 1 several compensable factors, each having several degrees, as well as 2 the degree to which each of these factors is present in the job.

Comparable worth refers to the requirement to pay men and women equal pay for jobs that are of comparable rather than strictly equal value to the employee. Once the commitee uses job evaluation to determine the relative worth of each job, it can turn to the task of assigning pay rates to each job; it would usually first want to group jobs into pay grades to streamline the process.

Broadbanding Broadbanding means collapsing salary grades into just a few wide levels or bands, each of which contains a relatively wide range of jobs and pay levels. Pay Policies The better is to have a policy of once-a-year raises following a standard 1-week appraisal period, preferably about 4 weeks before you produce the budget for next year.

If you are like most owners of small businesses, you must constantly strive to find the best ways to maximize your profits. The team can then use wage curves to price each grade and then fine-tune pay rates. The most popular procedure is to choose compensable factors and then develop class or grade descriptions for each class or grade in terms of the amount or level of the compensable factor Establishing strategic pay plan in those jobs.

Determine Costs Your actual compensation costs Establishing strategic pay plan much more than just an hourly rate or monthly salary. Developing a Workable Pay Plan Developing a pay plan is as important in a small firm as a large one. Many managers know to include these expenses. With ranking, for instance, you conduct a job analysis, group jobs by department, and have raters rank jobs.

Basic Strategic Pay Policies

With manay stockholders concerned with executive remuneration, board oversight of executive pay has become an important issue, and boards of directors need to make sure they use qualified advisers and exercise diligence and independence in formulating executive pay plants.

There is more emphasis on board oversight and regulation of executive pay. There is also more emphasis on paying managers and professionals based on results—based on their performance or on what they can do—rahter than on the basis of static job demands like working conditions.

The main Establishing strategic pay plan for doing so is to encourage employees to develop the competencies they need to move seamlessly from job to job.

Board Oversight of Executive Pay There are various reasons why boards are clamping down on executive pay. Compensable factors refer to compensable elements of a job such as skills and efforts. Why Use Competency-Based Pay?

Elements of Executive Pay Salary is traditionally the cornerstone of executive compensation. Group Similar Jobs into Pay Grades A pay grade is comprised of jobs of approximately equal difficulty or importance as established by job evaluation.

Pricing managerial and professional jobs involves some special issues. Wage Surveys Four sources can be especially useful. Overtime, bonuses and commissions must be included, as well as what your portion of payroll taxes will cost.

At General Mills, for instance, certain plant personnel are paid based on the skill levels they attain. If you need employees who are proficient in the latest technological advances, you might include bonuses for earning additional certifications.

There is less emphasis on narrowly defined pay ranges and jobs, and more on broader jobs and pay ranges. Here is how to price jobs with a wage curve. What is Competency-Based Pay? Specific categories of employees are exempt from the act or certain provisions of the act, particularly its overtime provisions.

Matching your compensation model to your business goals can help you decide which payroll plan will be most beneficial in achieving your long-term goals. The process of establishing pay rates while ensuring external, internal, and procedural equity consists of five steps: Review your plan to make sure that the strategy you plan does not violate any laws.

Computerized Job Evaluations have two main componets: Braodbanding encourages employees to move freely from job to job and facilitates implementing team-based high-performance management systems.

Internet and Web sites, classified newspaper ads, Local Job Service offices, and local employment agencies. If you commit to a policy, such as vacation pay or performance incentives, you must abide by the policy.

For example, you might offer merit increases to reward quality employees for their past performance. The main reason is that traditional pay plans may actually backfire if a high-performance work system is your goal. Legal considerations include, most importantly, the Fair Labor Standards Act, which governs matters such as minimum wages and overtime pay.

A training system that lets employees acquire the skills. Research You want your compensation plan to be at least equal to that offered by similar companies who might be interested in recruiting the same employees.

Compensation includes basic wages, plus items such as bonuses and incentives, overtime pay for nonexempt workers, paid time off, insurance, stock options, expense accounts and company cars.

Managerial jobs tend to stress harder-to-quantify factors like judgment and problem solving more than do production and clerical jobs.In establishing strategic pay plans, managers first need to understand some basic factors in determining pay rates. Employee compensation includes both direct financial payments and indirect financial statements.

The factors determining the design of any pay plan include legal, union, company strategy/policy, and equity. Establishing a strategic pay plan might help you to accomplish your goals. Research You want your compensation plan to be at least equal to that offered by similar companies who might be interested in recruiting the same employees. - Free download as PDF File .pdf), Text File .txt) or view presentation slides online. implementing a strategic pay plan4/4(5). In light of this, the Strategic Plan Update planning process was initiated for the purpose of re-examining the issues and priorities established in Strategic Plan and developing an action plan for the next five to seven years.

Paper details Develop a response for the question 1 & 2. Then read the case and develop a responses for the 3 questions. Each question(s) should have words response. 1. What do you think are the key components within a performance management plan?

Which component is the most challenging to implement? Why? 2. Today.

Chapter-11 Establishing Strategic Pay Plans

In this plan we are to include the following: 1) a description of the organization’s history, products, and their major competitors, 2) explain the current situation of the organization in the market, 3) conduct a SWOT analysis to determine what areas offer opportunities for change, 4) select three areas from the SWOT analysis and explain why the areas chosen are essential to the strategic plan, and 5) explain .

Establishing strategic pay plan
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