Employee Rewards Exam 2

Employee Rewards Exam 2 - EmployeeRewardsExam2

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Employee Rewards Exam 2 Salary Structures and Pay Grade Dimensions (Text Ch. 8)  Pay Grade Width o Distance from minimum to maximum of range o Typical ranges are 30-40% Midpoint to Midpoint Difference o Represents pay differential from one pay grade to the next one in a  sequence o Must be meaningful in amount o Ranges from 8% (non-exempts) to  o 12% (management and exempts) Pay Grade Dimensions Pay Grade Overlap o Salaries that are Common to adjacent Pay Grades. o Overlap gives managers flexibility to move employees to higher grades  when promoted without an overly generous pay raise.  o Too much overlap leads to pay inequity, too little overlap causes barriers  to promotion and inefficiencies Compa Ratio o The Average of all actual salaries in a pay grade divided by the midpoint  of the range o Compa Ratios let Compensation Managers view the distribution of  salaries and identify grades that are out of control - too many above, or  too many below the desired pay policy position in the market indicates a  problem. o CR > 1.10 is quite high o CR < .90 is quite low o CR = 1.00  is the ideal Red Circle Pay Rates   o Pay Rate above the maximum for special situations such as outstanding  employee that requires executive approval Alternatives to Traditional Pay Structures Skill-Based Pay 1
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Broadbanding  Alternative Structures are more flexible than traditional pay structures and  encourage employees to assume different roles without triggering compensation  increases or decreases Skill-based Pay Definition :  Pay is based on the mastery of a series of skill-blocks or  competencies that makes the person more valuable to the employer. Features of Skill-based Pay o Different skill levels can be identified o Vertical skills or horizontal skills Vertical skills are the depth of your skills o Monetary pay differential associated with each skill level above  base rate . o Certification of skill must be demonstrated by employee. o Fits well with self-managed team culture and organizations that  emphasize learning skills. o Also fits with high employee involvement concept because pay rates are  fully disclosed and can be influenced by employees’ willingness to learn  new skills. Challenges to using Skill-based Pay   o Over time many employees reach the top of the pay scale. May be  expensive. o Employee skills must be fully utilized - not always possible. Skill-based Pay
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This note was uploaded on 10/14/2010 for the course MGMT 4030 taught by Professor Saturay,st during the Spring '08 term at Colorado.

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Employee Rewards Exam 2 - EmployeeRewardsExam2

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