Finalizing Pay Structure

EXTERNAL COMPETITIVENESS 1

EXTERNAL COMPETITIVENESS 2

External Competitiveness

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June 6, 2021

External competitiveness: Weighted Means

As far as this Milestone Two is concerned, the weighted means may be calculated since it is the initial step involved when it comes to analyzing the pay data. It is also important for generating the weighted means of every benchmark job. Using the data from Appendix B which contains information regarding results from Salary Survey, the weighted means for every benchmark job might be calculated as follows:

Weighted mean is equal to equal weight to every job incumbent’s mean and by using data from Appendix B, the calculations will be;

Front Desk Receptionist

Company	# Job Incumbents	Average Base Pay
A	1	$27,000
B	2	$25,500
C	1	$29,500
D	2	$31,000
E	2	$26,500
F	1	$26,000

The calculations will entail:

Front Desk Receptionist for A = 1/9 x $ 27,000 = $ 3,000

Front Desk Receptionist for B = 2/9 x $ 25,500 = $5,666.66

Front Desk Receptionist for C = 1/9 x $ 29,500 = $3277.77

Front Desk Receptionist for D = 2/9 x $ 31,000 = $6888.88

Front Desk Receptionist for E = 2/9 x $ 26,500 = $5888.88

Front Desk Receptionist for F = 1/9 x $ 26,000 = $2,888.88

Therefore, the entire Weighted Mean is equal to $ 27,611.07 (Sum of the mean for all the companies).

Administrative Assistant

Company	# Job Incumbents	Average Base Pay
A	4	$37500
B	4	$32,000
C	3	$33,000
D	5	$39,000
E	4	$36,500
F	4	$35,000

The calculations will be as follows and all the amounts are in $

A= 4/24 x 37,500 = 6250

B= 4/24 x 32,000 = 5333.33

C= 3/24 x 33,000 = 4125

D= 5/24 x 39,000 = 8125

E= 4/24 x 36500 = 6083.33

F= 4/24 x 35000 = 5833.33

The weighted mean, i.e., sum of average mean for all the companies is 35,749.99.

Operations analyst

Company	# Job Incumbents	Average Base Pay
A	2	$63500
B	4	$59000
C	3	$61000
D	5	$67000
E	3	$63500
F	3	$65000

The calculations are as follows and all the values are in $

A= 2/20 x 63500 = 6350

B= 4/20 x 59000 = 11800

C= 3/20 x 61000 = 9150

D= 5/20 x 67000 = 16750

E= 3/20 x 63500 = 9525

F= 3/20 x 65000= 9750

Weighted mean is equal to 63325.

Production worker

Company	# Job Incumbents	Average Base Pay
A	9	$27,500
B	12	$25000
C	11	$31000
D	13	$33000
E	8	$29000
F	10	$28500

Calculations will be done as follows and amounts are in $;

A= 9/63 x 27500 = 3928.57

B= 12/63 x 25000= 4761.90

C= 11/63 x 31000= 5412.7

D= 13/63 x 33000= 6809.5

E= 8/63 x 29000= 3682.5

F= 10/63 x 28500= 4523.81

Weighted mean = 29118.98

Benefits manager

Company	# Job Incumbents	Average Base Pay
A	1	$62000
B	2	$57500
C	1	$63000
D	1	$67000
E	2	$62000
F	1	$65000

Calculations in $ are as follows;

A= 1/8 x 62000=7750

B= 2/8 x57500=14375

C= 1/8 x 63000=7875

D= 1/8 x 67000=8375

E= 2/8 x 62000=15500

F= 1/8 x 65000 =8125

Weighted mean = 62,000

Job Evaluations

Job evaluation for Front Desk Receptionist

Compensable Factor	Weight	Degree (1,2,3,4)	Points
Skills (50%)
-Educational level	25%	1	25
Technical skills	25%	1	25
Responsibility (30%)
-Scope of Control	10%	1	10
-Impact of Job	20%	2	40
Effort (20%)
-problem solving	10	1	10
-Task Complexity	10	1	10
	100%		120 points

Job evaluation for administrative assistant

Compensable Factor	Weight	Degree (1,2,3,4)	Points
Skills (40%)
-Educational level	25%	2	50
Technical skills	15%	2	30
Responsibility (40%)
-Scope of Control	20%	2	40
-Impact of Job	20%	2	40
Effort (20%)
-problem solving	10%	2	20
-Task Complexity	10%	2	20
	100%		200 points

Job evaluation for operations analyst

Compensable Factor	Weight	Degree (1,2,3,4)	Points
Skills (60%)
-Educational level	35%	3	105
Technical skills	25%	3	75
Responsibility (20%)
-Scope of Control	10%	2	20
-Impact of Job	20%	2	40
Effort (20%)
-problem solving	10	3	30
-Task Complexity	10	3	30
	100%		300 points

Job evaluation for production worker

Compensable Factor	Weight	Degree (1,2,3,4)	Points
Skills (50%)
-Educational level	25%	3	75
Technical skills	25%	3	75
Responsibility (30%)
-Scope of Control	10%	3	30
-Impact of Job	20%	3	60
Effort (20%)
-problem solving	10	2	20
-Task Complexity	10	3	30
	100%		290 points

Job evaluation for Benefits Manager

Compensable Factor	Weight	Degree (1,2,3,4)	Points
Skills (50%)
-Educational level	25%	4	100
Technical skills	25%	4	100
Responsibility (30%)
-Scope of Control	10%	4	40
-Impact of Job	20%	4	80
Effort (20%)
-problem solving	10	4	40
-Task Complexity	10	4	40
	100%		400 points

External competitiveness: Predicted Market Pay Rate

Out of the regression analysis in the excel document and using the formula y = a + b(x), the predicted market pay rate for every benchmark job might be calculated.

From the Regression analysis in excel, y has been found to be -25324.6 and x has been found to be 465.3211.

Therefore, the predicted market pay rate will be y = a + b (x) whereby x is the job evaluation and the calculations will be as follows;

Front Desk Receptionist = -25324.6 + 465.3211 (120) = 30,513.932

Administrative assistance = -25324.6 + 465.3211 (200) = 67,739.62

Operations analyst = -25324.6 + 465.3211 (300) = 114,271.73

Production worker = -25324.6 + 465.3211 (290) = 109,618.519

Benefits Manager = -25324.6 + 465.3211 (300) = 114,271.73

External competitiveness: Market Pay Line Benefits manager &

Operations analyst

Production worker

Administrative assistant

.

Front Desk Receptionist

$30,000 $60,000 $90,000 $120,000

Hint: Predicted market pay rate

Pay line

External competitiveness: Adjusted Pay Rates

Based on the predicted market pay rate and the pay line also known as the policy line, various adjustments on the pay rates may be made. They may be made so that they can be based on the organization’s strategy of the lead pay level. The adjustment will be as follows;

Job Title	Market Pay ($)	Adjusted Pay Rate
Front Desk Receptionist	30,513.932	31,513.932
Administrative assistant	67,739.62	68,739.62
Production worker	109,618.519	110,618.519
Operations analyst	114,271.73	115,271.73
Benefits manager	114271.73	115,271.73

External competitiveness: Pay Grades

According to Gerhart & Newman, (2020), pay grades may be constructed once the pay rates have been created. They may be constructed for the purposes of creating the pay structure of the concerned organization. The other important information to claim is that the pay grades will match to the amount of money an individual gets paid and they may be classified as A, B or even C. Therefore, the above individuals may be categorized based on the salaries they earned as well as the adjusted pay rates and based on the information that is available for this milestone, the following will be the pay grades for the above workers of the organization.

The adjustment will be as follows;

Job Title	Pay Grade
Front Desk Receptionist	A
Administrative assistant	A
Production worker	B
Operations analyst	C
Benefits manager	C

External competitiveness: Pay Ranges

Based on the pay grade, pay ranges may also be calculated or in other words, the minimum, the average as well as the maximum pays may be designed. They will be important for categorizing the working into different classes of payment and this will allow the organization to determine the appropriate salaries it may determine to pay for the workers. Regarding the available information, the following are the pay ranges for the involved organization.

Pay Grade	Minimum (- 10%)	Average	Maximum (+10%)
A	29,513	48,756.5	68000
B	108,000	109,500	111,000
C	113,000	115,000	117,000

Articulation of response

Any organization that ought to be successful needs to consider various aspects and some of them include the pay structure for such a firm. The reason is that the pay structure of the company is one that needs to be in line with the generation of revenue by the firm so that it may not pay too much money and realize a loss at the end of the day. Such a pay structure has to be designed and various evaluations will also have to be considered and they will be done based on the compensation factors such as skills possessed by an individual including the level of education, ability to solve problem within the organization among other aspects that have been illustrated under the job evaluation section. Therefore, the factors are critical to the success of the organization.

References

Burke, L. (2008). Designing a pay structure. SHRM. https://www.shrm.org/certification/for-organizations/academic-alignment/faculty-resources/Documents/Designing%20a%20Structure-IM9.08.pdf

Gerhart, B., & Newman, J. (2020). Strategic Compensation (13th edition). McGraw-Hill.

Martocchio, J. (2020). Strategic compensation: A human resource management approach (10th ed.).

Milkovich, G., & Newman, J. (2008). Compensation. McGraw-Hill Irwin.

U.S. Department of Labor. (2020). O*NET Online. https;www.onetonline.org/