Week 2 Discussion
Review the following lectures:
Compensation Systems
Pay Structures
Discussion Questions:
Before beginning work on this discussion forum, please review the link “Doing Discussion Questions Right” and any specific instructions for this topic.
By the due date assigned, begin commenting on at least two of your classmates’ responses. You can ask technical questions or respond generally to the overall experience. Be objective, clear, and concise. Always use constructive language, even in criticism, to work toward the goal of positive progress. Submit your responses in the Discussion Area.
Introduction:
There are three discussion questions listed below. You may choose any one of the questions. By the due date assigned, respond to one of the discussion questions and submit your response to the Discussion Area below using the lessons and vocabulary found in the reading. Support your answers with examples and research and cite your sources using the APA format.
Tasks:
Choose one of the following discussion questions:
A new employee has just been hired by your department. Provide a definition of the person-focused pay plan and design a performance plan for the employee using the person-focused concept.
Provide a definition of a market-based evaluation. Describe how it is used in the organization.
Explain how the HR professional can benefit from using the Occupational Information Network (O*NET).
To support your work, use your course and textbook readings and also use the South University Online Library. As in all assignments, cite your sources in your work and provide references for the citations in APA format.
Your initial posting should be addressed at 500–1000 words as noted in the attached PDF.
Compensation Human Resources
Compensation Systems
What constitutes an internally consistent compensation system? The �rst thought that may come to
your mind is fairness. Of course, this is a critical component of the compensation plan; however,
fairness is the outcome to be achieved. Before dashing to the outcome, it is important to put the
building blocks in place to support the foundation. There are several factors to consider. To begin the
assessment, the HR professional must have a clear understanding of the number of positions
required for the organization. From this step, he or she is tasked with designing job descriptions. Job
descriptions will include things such as duties, responsibilities, functions, and tasks. A well-developed
job description will aid the manager in the employees’ performance evaluation. On the basis of the
job description, the HR professional will determine the salary range for each position. There are two
factors to consider to maintain internal consistency in the compensation plan, job analysis and job
evaluation. Job content, KSAs—knowledge, skills, and abilities—and the work environment must also
be considered in the compensation plan. The job analysis should be conducted by a trained and
quali�ed individual. The analysis comprises �ve fundamental areas:
Determining the program for the job analysis
Making sure the analysts are quali�ed to conduct the job analysis
Determining whether the analyst understands the internal and external factors related to each
job
Determining the data collection method
Writing the job description
Once these objectives have been met, the HR professional can design a competitive compensation
system based on the market. The market-competitive pay system should meet the following criteria:
Examine the internal and external factors for the company’s market
Use compensation surveys to analyze the pay practices of the competitors
Merge the internal job analysis with the external pay market data
Finalize the compensation policies.
Did You Know?
Review each fact to learn more.
Additional Materials
From your course textbook, Strategic Compensation: A Human Resource Management Approach,
read the following chapters:
Building Internally Consistent Compensation Systems
Building Market-Competitive Compensation Systems
From the South University Online Library, read the following article:
Everything You Need to Know about Job Analyses, Descriptions, and Speci�cations. Surveys
Examine 2014 Compensation Trends in the U.S., Globally.
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx?
direct=true&db=nlebk&AN=529817&site=eds-live)
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Pay Structures
It is a known fact that employees want to be recognized for the work they perform. This can show up
as monetary and nonmonetary rewards. The initial compensation plan is based on the pay structure.
The HR professional is tasked with determining the number of pay structures, marketing pay lines,
pay grades, and pay ranges for each position. The pay structure is also based on exempt and
nonexempt status. To gain a better understanding of what constitutes an exempt versus nonexempt
position, one must peruse the Fair Labor Standards Act (FLSA). While the FLSA provides guidelines to
ensure pay fairness, the internal pay structures can differ due to the geographical location and pay
rates in a particular location on the basis of the cost of living. Pay policy levels and pay mixes can be
assessed through surveys. These surveys can be used to help the HR professional uncover the pay
levels, pay grades, incentives, and bene�ts offered by the competitors. The HR professional must
decide whether the organization will match, lead, or lag within the given market. Calculating the pay
ranges for each pay grade requires a very complex analysis. In addition to determining ranges of pay
for each pay grade, the HR professional should be knowledgeable about the following pay structures:
merit pay, sales incentive plans, and person-focused structures. Lastly, the HR professional should
understand and utilize the broadbanding concept and the two-tier pay structure. The HR
professional and other managers within the organization must develop a well-structured
compensation plan to remain competitive. Here are a few questions to consider for this unit:
What happens when an organization has a fair and competitive pay plan?
What occurs when the pay plan is poorly structured?
When should the HR professional use broadbanding?
When should the HR professional use the two-tier pay structure?
Pay Structure Concept and Consequence
Additional Materials
From your course textbook, Strategic Compensation: A Human Resource Management Approach,
read the following chapter:
Building Pay Structures That Recognize Employee Contributions
From the South University Online Library, read the following article:
Perceptions of Politics and Fairness in Merit Pay
(https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp?
sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx?
direct=true&db=bth&AN=49389516&site=eds-live)
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