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BUS 681

Question 1 – 250 words

Building Blocks

Discuss the basic building blocks of developing a market competitive pay system, including the relationship between internal and external equity. 

Question 2 – 250 words

Job Analysis

Provide a brief overview of the job evaluation process, including the importance of compensable factors.  Detail the compensable factors of a position you are familiar with and their impact on that position’s salary, and you may want to reference the job analysis and job description process, which form the foundation of job evaluation. Identify at least four pitfalls that exist for organizations that do not follow this process.  Respond to at least two of your fellow students’ postings

PAPER

Market Competitiveness

Compose a three-to-five page paper (not including the title and reference pages). Your paper should be written in a scholarly third-person tone; it should be in APA format. Your essay should address the following:

a. Evaluate the concept of market competitiveness in relation to an organization’s pay system, particularly when it is unable to offer its employees market competitive salaries due to a lack of financial resources. 

b. Propose at least three alternative approaches for organizations which have limited financial resources. 

c. Identify at least three specific steps that could be taken to minimize the impact implementing these alternative approaches could have on the firm’s success. Justify why these steps would be the most appropriate in this situation.

In addition to the text, cite at least two scholarly references to support your discussion.

Required Resources

Text

Read the following chapters in your text,  Strategic compensation :

· Chapter 6: Building Internally Consistent Compensation Systems

· Chapter 7: Building Market-Competitive Compensations Systems

· Chapter 8: Building Pay Structures That Recognize Employee Contributions

 

Recommended Resources

Article

Earle, J. (2010). The emerging role of Clawback policies for managing risk in compensation programs. Benefits Law Journal, 23(1), 72-79. Retrieved from the Proquest database.

Websites

You will find a list of websites that you may find useful under the Course Materials section.

LECTURE

 this course will discuss the components of developing a market competitive pay system as well as the job evaluation process. To develop a competitive plan, HR managers need to use a variety of practices that will make up the plan to be competitive but also adhere to the organizations overall goals and plans. Market-competitive pay systems play a significant role in attracting and retaining the most qualified employees for the organization (Martocchio, 2017).

HR professional should offer a competitive salary to attract and retain talented employees without damaging the organization’s bottom line (Bisk, 2018). To determine a competitive pay system for employees, organizations need to review internal job descriptions and salaries and then utilize the compensation benchmarking process to understand what competitors are paying for a similar position in the industry. For an organization to develop an appropriate and competitive compensation package there are a few steps the organization can take. For example, the organization should know the market in which is participates in to determine if the organization pay is on par with its competitors. There needs to be an assessment of competitor’s compensation and pay policies. This can be accomplished via salary surveys which collect day about salaries, and benefits, among various employers for specific jobs (HRcouncil.ca, nd). Salary surveys are conducted with “numerous employers to determine pay levels for specific job categories and are generally conducted either by region, sector or job classification for the purposes of comparability.” (HRcouncil.ca, n.d.). Salary surveys can provide benchmarking information for comparing salaries and benefits.  Organizations also need to complete an internal analysis which can include a SWOT analysis of its compensation practices. The survey results can also be used in completing the SWOT analysis. A SWOT analysis analyses the organizations strengths, weaknesses, opportunities and threats. In completing this analysis, the organization will be able to identify all factors either favorable or unfavorable, necessary to obtain the desired outcome.

Organizations can be competitive by offering other means of compensation other than a salary. For example, more and more organizations are providing employee stock ownership plans, deferred compensation, flexible work schedules or remote working options and contributions to retirement plans. Insurance plans such as health, dental, life and disability are also other “perks” that organizations are providing to be competitive with a compensation and benefits package.

Job evaluation is the “systematic process for assessing the relative worth of jobs within an organization.” (HRcouncil.ca, 2018). An analysis of each position’s responsibilities, knowledge, and skill requirements is used to measure the value of the job to the employer. This evaluation process allows the organization to determine the appropriate pay rate. As an organization creates new job or a reclassification of a job, a job evaluation should be completed so the organization knows it is hiring based on its needs. The job evaluation often determines which jobs should receive higher compensation as compared to other jobs within the organization. A job analysis is the “systematic study of a job to determine which activities and responsibilities it includes, its relative importance to other jobs, the personal qualifications necessary for performance of the job and the conditions under which the work is performed.” (SHRM, 2017). It allows HR to understand what tasks are important and sets the expectation for other HR activities such as recruitment and selection, relative training programs and performance appraisals. The job analysis is used to create a job description which is also considered by the organization when determining the appropriate compensation package.

Overall, there are many factors and analysis an organization needs to review and complete when determining the appropriate compensation package. Internal and external factors need to be considered for the package to be competitive. Competitive compensation package will allow organizations to attract and maintain the best qualified employees.

Please review the  Total Rewards (Links to an external site.)  video which will provide an overview of total reward compensation plans.

References

Bisk. (2017). Developing a competitive pay practice in your organization (Links to an external site.) . Retrieved from https://www.villanovau.com/resources/hr/developing-competitive-pay-practices/#.W9Zar7hRfIU

Gregg Learning. (2016).  Total rewards (Links to an external site.)  [Video file]. Retrieved from https://www.youtube.com/watch?v=LPdEW21QfDY

Hrcouncil.ca. (n.d). Compensation & benefits (Links to an external site.). Retrieved from http://hrcouncil.ca/hr-toolkit/compensation-salary.cfm

Martocchio, J. (2017). Strategic compensation: A human resource management approach (9th ed.). New York, New York: Pearson.

Society for Human Resource Management. (2018). Performing a job analysis (Links to an external site.) . Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/performingjobanalysis.aspx