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Designing Compensation Plans

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Designing Compensation Plans Gundars Kaupins, Ph.D., SPHR Boise State University Outline Equities End Results Preliminaries Details Equity Theory My Outcomes = Mark ... – PowerPoint PPT presentation

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Title: Designing Compensation Plans


1
Designing Compensation Plans
  • Gundars Kaupins, Ph.D., SPHR
  • Boise State University

2
Outline
  • Equities
  • End Results
  • Preliminaries
  • Details

3
Equity Theory
  • My Outcomes Marks Outcomes
  • My Inputs Marks Inputs
  • 90,000 lt 100,000
  • 10 papers 1 paper

4
Equities (Competing Values)
  • External
  • Internal
  • Employee
  • Strategic

5
End Results
  • Market Based Pay
  • Competency Based Pay
  • Skill Based Pay
  • Mixed Methods
  • Salary Structures

6
Market-Based Pay Example
Administrative Assistant Entry Level High 10
Company A 11.50 14.00
Company B 12.00 15.00
Company C 12.50 17.00
7
Competency Based Pay Example for Impact and
Influence
  • 0Lets things happen
  • 1Appeals to reason does not adapt to audience
  • 2Tries different tactics when attempting to
    persuade
  • 3Tailors presentations to appeal to the audience
  • 4Uses experts to develop a planned network of
    relationships with all business-related parties

8
Skill-Based Pay Example For Factory Worker
  • Core--9.00 for completion of core Quality
    course, shop floor control
  • Core ElectivesPanel fabrication 1.00, pad
    welding .50, flame spraying 2.00 degreasing
    .10 end casting 1.50
  • Optional ElectivesCareer development 1.00,
    geometric tolerance .40

9
Mixed Method Example
0-1 Yrs 2-5 Yrs 6-10 Yrs 11 Yrs
BA 1.0 1.4 1.7 2.0
BA 15 1.2 1.5 1.9 2.2
BA 30 1.4 1.7 2.0 2.4
MA 1.7 1.9 2.4 2.7
MA 30 2.0 2.4 2.7 2.9
Ph.D. 2.5 3.0 3.4 3.7
10
Pay Structure Example
  • Pay (External Equity)
  • Points (Internal Equity)
  • Pay or Policy Line (Strategic Equity)
  • Pay Grades (Employee Equity)

11
Preliminaries
  • Job AnalysisObservation, diary, videotape,
    portfolio, questionnaire
  • Job DescriptionIdentification, responsibilities,
    essential and nonessential job functions (tasks),
    job specifications

12
Job Analysis Questions
  • Identification Job title, supervisor title,
    department, exempt/nonexempt, pay range, grade
    level
  • Responsibility
  • Essential Job Functions
  • Nonessential Job Functions
  • Job Specifications Education, Experience,
    Working Conditions, Knowledge, Skills, Abilities

13
September 30, 2011 Nonexempt Grade 5 (Pay Range
12-16/hr.) Job Title Maintenance Group
Leader Reports To Facilities
Manager Responsibilities Coordinates and
schedules activities of workers engaged in
facilities repair and maintenance. Orders
department supplies.
14
  • Essential Job Functions
  • Coordinates and schedules activities of workers
    engaged in the repair and maintenance of machines
    and utility systems and new construction
    activities such as carpentry, plumbing, and
    electrical activities.
  • Monitors and orders all repair and maintenance
    materials.
  • Monitors the facilities to ensure that machines
    and utility systems are operated in compliance
    with federal, state, and local laws.
  • 4. Repairs equipment.

15
  • Other Job Functions
  • Coordinates contract labor with in-house labor
    repair and maintenance activities.
  • Suggests changes to utility systems to assist the
    layout of new work areas.
  • Contracts minor repair work.
  • 4. Performs special projects as assigned.

16
Job Specifications Education High school
graduate or equivalent with vocational courses in
heating, ventilation, and air conditioning
(HVAC), electrical installation and maintenance,
and facilities systems. Experience Must have a
minimum of three years experience as a
maintenance worker or equivalent work
experience. Working Conditions May have to
occasionally work outdoors to maintain HVAC
systems. Knowledge Must know how to read and
interpret HVAC instruction manuals. Skills
Must use listening and reading skills to
understand maintenance issues. Must use
technical skills to fix equipment and
facilities. Abilities Must be able to lift at
least fifty pounds of equipment as needed.
17
Employee Signature _________________ Date
___________ Supervisor Signature
_________________ Date ___________ Human
Resources Signature ___________ Date
___________
18
Details
  • External EquityPay Surveys
  • Internal EquityJob Evaluation
  • Strategic EquityGoals (e.g., lag)
  • Employee EquityMerit, Seniority, Incentives

19
External EquityPay Surveys
  • FederalNational Compensation Survey
  • StateIdaho Department of Labor Employment and
    Wage Survey
  • PrivateSalary.com

20
Internal EquityJob Evaluation
Nonquantified Quantified
Job To Job Ranking Factor Comparison
Job To Predetermined Standard Job Classification Point
21
Ranking I
  • Legal Secretary--Perform secretarial duties
    utilizing legal terminology, procedures, and
    documents. Prepare legal papers and
    correspondence, such as summonses, complaints,
    motions, and subpoenas.

22
Ranking II
  • Paralegal--Assist lawyers by researching legal
    precedent, investigating facts, or preparing
    legal documents. Conduct research to support a
    legal proceeding, to formulate a defense, or to
    initiate legal action.

23
Ranking III
  • Lawyer--Represent clients in criminal and civil
    litigation and other legal proceedings, draw up
    legal documents, and manage or advise clients on
    legal transactions.

24
Job Classification
  • Grade 18th Grade Education, No experience, easy
    working conditions
  • Grade 2HS Education, one year experience,
    moderate working conditions
  • Grade 3College Education, two years experience,
    harsh working conditions

25
Factor Comparison
Education Required People Contact Working Conditions
0
4 Plumber Recruiter
6 Recruiter Plumber Architect
8 Recruiter
12 Architect Plumber
25 Architect
26
Point System Compensable Factors
  • Education
  • Experience
  • Working Conditions
  • Monotony
  • People Contact
  • Know-How
  • Responsibility

27
Education Factor
  • 10 8th Grade
  • 20 High School Graduate
  • 50 Associates Degree
  • 70 Bachelors Degree
  • 100 Masters Degree
  • 150 Ph.D.

28
Experience Factor
  • 10 0-1 years
  • 30 2-3 years
  • 50 4-5 years
  • 80 6 years

29
Working Conditions
  • 5 Easy
  • 10 Moderate
  • 30 Harsh

30
Hay System
  • Know-How
  • Problem-Solving
  • Accountability

31
Strategic Equity
  • Lead
  • Lag
  • Lead-Lag
  • Lag-Lead

32
Employee EquityDesign of Pay Grades
  • Broadbanding
  • Two-tier Systems
  • Expanding

33
Employee Equity--Plans
  • Taylor Plans
  • Standard Hour Plans
  • Commissions
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