發(fā)展中的薪酬結(jié)構(gòu)(1)

1、Session 4Developing A Salary StructureWHAT IS A SALARY STRUCTURE?A salary structure sets out different salary levels for different groups of jobs based on:-internal relativities of job value (x-axis, established through job evaluation)external market pay rates of jobs (y-axis, established through ma

2、rket surveys)CDBA$Job Grades (Job Evaluation Points)Which approach will be used to develop the job worth hierarchy?Market DataEmphasisJob ContentEmphasisLabor Market DataCollection and AnalysisJob Content EvaluationJob DescriptionsJob AnalysisWill written descriptions be used?Reconciliation of Inter

3、naland External ConsiderationsSalary StructureJob Worth HierarchyOVERVIEW OF SALARY STRUCTURE DEVELOPMENTIMPORTANCE OF SALARY STRUCTURESEnsure reward policies are equitably, fairly & consistently implemented & administeredAllow internal relativities to be managedProvides a framework through which pa

4、y opportunities can be communicated to employeesISSUES IN DEVELOPING SALARY STRUCTURESBusiness StrategyExtent of CompetitionIndustry PracticeCapacity to PayReward Philosophy & StrategyDESIGN CONSIDERATIONS Number of salary structuresPay policy lineNumber of salary gradesMidpoint-to-midpoint differen

5、tialsSalary range spreadsSalary range overlapNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentials Salary range spreadsSalary range overlapIS ONE ENOUGH?Organization hierarchy Diversity of business unitsHot jobsEase of administrationReward philosophyNumb

6、er of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentials Salary range spreadsSalary range overlapDETERMINING THE PAY POLICY LINEmarket trend linecompany trend lineMarket data (median)Company data (minimum, median, maximum)Definition:Is a group of jobs similar i

7、n job worth or sizeLinks the evaluation points or value of a job & its assigned payWHAT IS A SALARY GRADE?CDBA$Job Grades (Job Evaluation Points)Number of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentials Salary range spreadsSalary range overlapTOO MANYrecogni

8、ze extremely fine distinctions of jobsABCDEFGHTOO FEWcannot recognize significant difference in job worthNUMBER OF SALARY GRADESNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentials Salary range spreadsSalary range overlapABCDEFGHConsiderations:Number of

9、 distinct job grades or skill levelsOrganization hierarchyEase of administrationFormula for Midpoint to Midpoint DifferentialMidpoint to Midpoint = Midpoint b - Midpoint a X 100%DifferentialMidpoint aExample:- 1750 - 1250 X 100% = 40%1250100 199200 299300 399$adcbMidpointMidpointMidpoint400 499Job G

10、rades (Job Evaluation Points)$1000$1250Midpoint to Midpoint DifferentialMidpointMIDPOINT-to-MIDPOINT DIFFERENTIALSNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlap$1750Formula for Salary Range SpreadSalary Rang

11、e = Maximum - Minimum X 100%Spread MinimumExample:- 1500 - 1000 X 100% = 50%1000$SALARY RANGE SPREADS100 199200 299300 399$400 499Job Grades (Job Evaluation Points)$1000$1500$1250Salary Range SpreadMaximumMidpointMinimumNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-mid

12、point differentialsSalary range spreadsSalary range overlapSALARY RANGE SPREADSNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlapExerciseSALARY RANGE SPREADSNumber of salary structuresPay Policy LineNumber of sa

13、lary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlapExerciseEntry level jobs-30% 40%Professional & Supervisory-50% 60%Management-60% 75%Senior Executives-75% 100%SALARY RANGE SPREADSNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint

14、 differentialsSalary range spreadsSalary range overlapTypical Range SpreadsGraphical Example of Inconsistent Salary Range SpreadsSALARY RANGE SPREADSNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlapLARGE OVERLA

15、PSalary Range OverlapSMALL OVERLAP INCONSISTENT OVERLAPSALARY RANGE OVERLAPNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlapMODERATE OVERLAPFormula for Salary Range OverlapSalary Range = Maximum a - Minimum b X

16、 100%OverlapMaximum a - Minimum a Example:- 1500 - 1350 X 100% = 30%1500 - 1000SALARY RANGE OVERLAPNumber of salary structuresPay Policy LineNumber of salary gradesMidpoint-to-midpoint differentialsSalary range spreadsSalary range overlap$100 199200 299300 399$400 499Job Grades (Job Evaluation Point

17、s)$1000$1500$1250MaximumMinimumSalary Range OverlapabMidpoint$1350Salary Range SpreadSALARY STRUCTURE TERMINOLOGIES100 199200 299300 399$400 499Job Grades (Job Evaluation Points)MaximumMinimumSalary Range OverlapMidpointMidpointMidpoint to Midpoint DifferentialPay Policy LineCASE ILLUSTRATIONCreatin

18、g a Grading StructureDevelop internal hierarchyGroup jobs into GradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRun analysisDevelop structureDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRu

19、n analysisDevelop salary structureGROUP JOBS INTO GRADESLook for natural breaks in either evaluated points or market dataOnce interim breaks have been decided, look at jobs within each group GROUP JOBS INTO GRADESCOLLECT & ANALYSE MARKET DATAAppropriate market data should be gathered from as many so

20、urces as possible for each jobMethod of comparison? Basic salary, Total cash or Total remunerationWhat market position? Median, UQ etcDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRun analysisDevelop salary structureCOLLEC

21、T & ANALYSE MARKET DATACOLLECT INCUMBENT DATAEnsure the same components of pay collected as the market data usedDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRun analysisDevelop salary structureCOLLECT INCUMBENT DATAGraphi

22、cal Example of Actual Incumbents Current Annual Basic Salary Against Proposed GradesCALCULATE GRADEMIDPOINTSAverage of market data within gradeAverage of actual incumbent data within gradeDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate gra

23、de midpointsRun analysisDevelop salary structureCALCULATE GRADE MIDPOINTSmarket trend linecompany trend lineMarket median Actual Company medianDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRun analysisDevelop salary struct

24、ureRUN ANALYSISDEVELOP SALARY STRUCTUREDevelop internal hierarchyGroup jobs into gradesCollect & analyse market dataCollect incumbent dataCalculate grade midpointsRun analysisDevelop salary structureExample of Proposed Salary Structure with Current Pay220004200062000820001020001220001420001620001820

25、00123456Managing cost of implementationHandling “under-paid”Handling “over-paid”Communicating gradingIMPLEMENTATIONWhat we value is changing:From jobs that are valued for:Level in the hierarchyTask complexity/years of education required Number of people supervisedThe size of the budget controlledTo

26、people who are valued for:Individual competenciesContribution and resultsBuilding team and organization capacityFlexibilityMulti-skilledTRENDS IN SALARY STRUCTURESTRENDS IN SALARY STRUCTURES -OBJECTIVES OF TRADITIONAL GRADE STRUCTURESDefine competitive pay opportunity for jobs of comparable valueMai

27、ntain consistency & internal equityManage costLegal compliance / defensibilityUnderstood & credibleProvide a basis for communicating with employees:“There is a system”Career pathsPromotions, etc.TRENDS IN SALARY STRUCTURES -OBJECTIVES OF EMERGING GRADE STRUCTURESIncrease organizational flexibilityEm

28、phasize career developmentFoster a flatter organizationDe-emphasize structure / hierarchySupport changes in job / work designCommunicate & support new culture, desired business outcomes & behavioursTransfer responsibility for managing and communicating pay to line managersIs a simple, large salary r

29、ange spanning the pay opportunity formally covered by several separate salary rangesReflects a major categorization of jobs Provides flexibility to define job responsibilities more broadlyProvides for lateral career progression; supports cross functional growth and developmentHas a salary range of 1

30、00+ percent wideA BROADBAND .BROADBAND CONSTRUCTION: TYPICAL MODEL150%One or twononexempt bandsVariation in range designs includingminimum and maximum only, minimum andno maximum, or no ranges at allOne to three bandsfor other exemptsWhere ranges are used, spreadsaverage 150% and can be as broadas 3

31、00% to 400%One or twoexecutive bandsJob FocusPerson FocusORGANIZATIONAL STRUCTURE AND STRATEGIESBASE PAY STRUCTURE STRATEGIESFunctionalHierarchicalControl focusFlatteningGreater flexibilityFlatDevelopment focusTraditional grade structure focused on job & taskFocus on promotionMovement based on tradi

32、tional performanceappraisal process“Broad Grades” to provide more flexibility, support for non-traditional career pathing, reward knowledge workFocus on breadth and depth of knowledge (e.g., cross-training)“Broad Bands” to emphasize employee development against core competenciesFocus on employees ca

33、reerDesigned to capture value-added to the businessMovement based on competency demonstrationRole FocusSPECTRUM OF BASE SALARY APPROACHESTraditional StructureBroad GradesBroad BandsAdvantagesReduced administrative burdenReflects organizations value systemInternal ranking integrityCan be built around

34、 market anchors (midpoints)Offers flexibility/guidance to managersImplicationsHierarchical focus can be a barrier to developmentPressure on the accuracy of job evaluation methodAdvantagesOffers more flexibility to reward individual contribution while still providing the guidance of a traditional sys

35、temControl points reflect market value ImplicationsRequires strong performance management system to ensure individual contributions are properly rewardedAdvantagesProvides managers with expanded flexibility in assigning roles and responsibilitiesTakes the focus off the “job”Broadens career pathsRemo

36、ves barriers for people movement and developmentImplicationsDecreases traditional promotional opportunities Pay levels can become higher than target rateLess appearance of internal equityRequires strong performance management systemSPECTRUM OF BASE SALARY APPROACHESWHY SOME COMPANIES HAVE DECIDED AGAINST BROADBANDINGHierarchical structure with no plans for changeStrong emphasis on upward mobility/promotionsConsistency more valued than flexibilityNo pressing business need to