{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Based approach is that non benchmark jobs are slotted

Info iconThis preview shows pages 41–43. Sign up to view the full content.

View Full Document Right Arrow Icon
based approach is that non-benchmark jobs are slotted into pay grades using a best-guess approach; this approach also led the organisation to consider market data that was not truly representative of an appropriate comparison. The organisation lacked a consistent approach to considering internal equity. According to Barret, “UJ needed a pay structure that balanced both internal equity and external competitiveness.” Through a competitive process, Hay Groups was selected to evaluate jobs and create pay structures that would balance the external compensation market with internal equity. The Hay Group assisted UJ to refine its compensation philosophy and operating guidelines. After this exercise, UJ has 16 pay grades. It is more efficient and less administratively cumbersome. According to Barret: “Historically, pay grade maximums had little meaning. Either an incumbent was moved to a new pay grade or the maximum was ignored. But not anymore. Pay grade maximums are now a key control. Beginning with implementation, salaries above pay grade maximums were capped, however, managers were given the option to provide merit-based, lump-sum payments that did not add to fixed costs yet recognised strong performers. With pay markets better defined, pay grade midpoints provided enhanced management guidance when making within range pay adjustment decisions. This resulted in a more effective distribution of salary increases.” Adapted from Hay Group Source: 2009 Hay Group Holdings, Inc Critically evaluate the above by discussing the following: Define external competitiveness and discuss the factors which shapes external competitiveness (15) Define job evaluation and discuss it in terms of content, value and external market links. In your discussion, briefly discuss the most important job evaluation systems used in South Africa. (15) Why should an organisation be concerned with internal alignment? In you answer, define internal alignment and pay structure and discuss internal alignment in terms of efficiency, equity and compliance with legal requirements. (10) Define the concept “pay policy” and discuss the different pay policy alternatives. (10) Total (50) x 2 = 100 Guidelines on answering this assignment are provided in appendix F of this tutorial letter.
Background image of page 41

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
42 Assignment 04 (Study units 2, 7 and 8) This assignment must NOT be sent to the University! COMPENSATION DECISIONS AT XYZ POWER UTILITY XYZ Power Utility faced one of the biggest changes in its history when government announced that it intended deregulating electric utilities in South Africa. The major challenge this announcement posed was increased competition. Unfortunately, the company’s compensation programme was appropriate for a monopoly, but not for operating in a competitive environment. Dennis Spry, the compensation manager explained: "Well, all our programmes were designed for the old kind of company — our employee benefits and all our HR programmes. The organisation has been hard at work trying to align its business structure and systems to support the new
Background image of page 42
Image of page 43
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page41 / 59

based approach is that non benchmark jobs are slotted into...

This preview shows document pages 41 - 43. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online