Unit 4

Establishing external & internal equity

Content
Wage and salary surveys Pay level policy Wages and compensation benchmarking

I. Wage and salary surveys

THREE POSSIBLE BASE PAY SYSTEMS

A SINGLE RATE FOR EACH JOB There is no range, this job pays $12.00/hr There are no pay increments awarded for either seniority or merit A PAY RANGE FOR EACH JOB The pay for this job ranges from $11.00 to $17.00/hr On what basis do employees progress through the range?
SENIORITY? TIME-IN-GRADE? MERIT?

How large should each step or increment be? $.50? $1.00? $2.00? A PAY GRADE SYSTEM Several jobs are grouped together into a single pay grade All these jobs will share a common pay range Painters, mechanics, and truck drivers are paid from $10.50 to 16.85/hr

COMPENSATION SURVEYS
Needed to attract and retain workers with scarce skills Develops a sense of external equity and fairness Helps the firm maintain an adequate pay structure DETERMINING THE SCOPE OF THE SURVEY

Where are we having trouble retaining workers? Where are market rates likely to be different from internal rates? Which jobs are the most difficult to fill? Where are we adding new positions to our organization?

SHOULD WE USE STANDARD WAGE SURVEYS?

PROS: Minimal time investment needed for the individual firm Data is based on large samples adequate representation Surveys conducted by expertspeople who know how to do it Data is summarized, categorized, easy to interpret CONS: There may be a fee (cost) for access to the data You cant select the specific companies surveyed Cant control the type of data reported (which jobs? benefits?) Data summaries may mask differences you want to examine

COLLECTING YOUR OWN WAGE SURVEY DATA

PHONE INTERVIEW -- (easiest)
+ Quick and relatively easy to do

+ Job content can be clarified to ensure the jobs are comparable + Can build rapport with respondent over time. Future contacts will be easier. - Puts a burden on the responder to reply immediately (to a possible stranger) - May yield incomplete answers because the respondent didnt anticipate your call - Long phone calls are not welcome. You cant get much data in five minutes.

MAILED QUESTIONNAIRE -- (most common)

+ Can collect data on many different job titles, benefits, etc + Responses arent rushed allows time for careful thought before answering - Response rates may be very low - Misunderstanding or confusion about comparable jobs cannot be clarified - Only gathers responses to specific questions posed - if you forgot to ask too bad!

COLLECTING WAGE SURVEY DATA, CONTD

INTERVIEW (most reliable)
+ Can ask questions, clarify job titles, etc + Gathers data with minimum impact on respondent + Builds relationships which can make future data exchange easier - Very time consuming to make and set appointments, conduct interviews, etc - Costly method; the expense of travel, etc

CONFERENCE -- (least used, but promising)

+ Takes advantage of professional meetings and conferences of HR personnel + Agenda of jobs to be reviewed, etc. established ahead of timepeople come prepared + Face-to-face meetings allow clarification and detailed discussion of jobs, benefits, etc - Meetings can be time consuming and tiring, after a day of conference activities - Determining when and where to gather requires coordination with several other firms

II. Pay Policy

The Elements of Total Compensation

Total Compensation

Base Compensation

Pay Incentives

Indirect Compensation/ Benefits

Forms of Compensation

COMPENSATION

Indirect

Direct

Protection Programs

Employee Services & Perquisites

Pay for time not worked

Base Pay

Merit Pay (Reward)

Incentives Short & Long Term

Cost of living Adjust ments

The Nine Criteria for Developing a Compensation Plan

1. Internal versus External Equity Will the compensation plan be perceived as fair within the company, or will it be perceived as fair relative to what other employers are paying for the same type of labor? 2. Fixed versus Variable Pay Will compensation be paid monthly on a fixed basis through base salaries or will it fluctuate depending on such preestablished criteria as performance and company profits? 3. Performance versus Membership Will compensation emphasize performance and tie pay to individual or group contributions, or will it emphasize membership in the organization logging in a prescribed number of hours each week and progressing up the organizational ladder?

The Nine Criteria for Developing a Compensation Plan (cont.)

4. Job versus Individual Pay Will compensation be based on how the company values a particular job, or will it be based on how much skill and knowledge an employee brings to that job? 5. Egalitarianism versus Elitism Will the compensation plan place most employees under the same compensation system (egalitarianism), or will it establish different plans by organizational level and/or employee group (elitism)? 6. Below-Market versus Above-Market Compensation Will employees be compensated at below-market levels, at market levels, or at above-market levels?

The Nine Criteria for Developing a Compensation Plan (cont.)

7. Monetary versus Nonmonetary Awards Will the compensation plan emphasize motivating employees through monetary rewards like pay and stock options, or will it stress nonmonetary rewards such as interesting work and job security? 8. Open versus Secret Pay Will employees have access to information about other workers compensation levels and how compensation decisions are made (open pay) or will this knowledge be withheld from employees (secret pay)? 9. Centralization versus Decentralization of Pay Decisions Will compensation decisions be made in a tightly controlled central location, or will they be delegated to managers of the firms units?

Factors that Influence Wage Levels

Conditions of Labor Market Area Wage Rates Cost of Living Compensation Policy of Organization Worth of Job

WAGE MIX

Employees Relative Worth

Collective Bargaining
Legal Requirements Employers Ability to Pay

Pay Model
1. 2. 3. Concepts Compensation techniques Compensation objectives Internal equity Job Analysis Job Description Job Evaluation External equity Market definitions Surveys Policy lines Pay structures

4.

Employee equity Seniority Increases Performance Evaluation Increase Guidelines

Administration Planning Budgeting Monitoring Evaluation

5.

Designing Pay level & Structure

Major Decisions
Major Steps:
1. 2. 3. 4. 5. Determine the pay level policy Design, conduct, & analyze surveys Update the data Construct the policy lines Design ranges, flat rates, & / or incentives

Determine Pay Level Policies

3 classes of pay level policies:
1. To lead 2. To meet 3. To follow competition

Relative importance of pay level factors (ranked by importance)

a. b. c. d. e. f. g. Rates paid by other employers in the industry or area Union strength Cost of living changes Surplus / shortage of qualified workers Employee unrest Employers overall financial position Firms profits

Design Pay Ranges

Construction of ranges
Develop classes or grades
Note down the illustration

Set midpoints, maximums, and minimums

Note down the illustration

Degree of overlap

Pay Structure fitting into compensation strategy

ABC Mission/Vision

Performance Management

Business Strategy

Total Compensation Strategy

Performance Management

Direct Compensation

Indirect Compensation (Benefits)

Intrinsic Rewards (Individual Determines)

Base Pay Pay Structure

Variable Pay

Pay Structure fitting into compensation strategy

Base Pay Strategy

Job Value

Pay Mix

Pay Delivery

External Value

Internal Value

Salary Structure

Policies & Procedures

Strategic Value

Individual Pay Determination

Desired Market Position Management Philosophy External Economic Environment Short- vs. Long-term Orientation

Typical Pay Structures Remain the Basis for Reality Based Pay
Range Spread = max pay - min pay minimum pay Midpoint Differential = ( mid-point of higher pay grade mid-point of lower pay grade

-1 ) x 100

$40,000

Compa-ratio =

employee pay range mid-point pay - range minimum range max - range min

Range Penetration =

$35,000

$30,000

Range Spread

$25,000

Midpoint Differential

$20,000 Maximum Midpoint $15,000 1 2 Minimum 3 4

Grade

Establishing Internal & External Equity

Preparing for the Job Evaluation

Identifying the need for the job evaluation
Employee feedback, high turnover, etc.

Getting the cooperation of employees

They may fear having their pay reduced

Choosing an evaluation committee.

Should include employees who actually perform the job

Performing the actual evaluation.

Job Evaluation Pay Systems

An alternative to market-based pay is to use a pay system based on job evaluation Job evaluation: systematically determine the relative value of jobs with an organization to create an internal hierarchy of jobs, and then use the hierarchy to set pay ranges for the jobs
Which job has the highest value to the organization and so should be paid the most? Which job has the second highest value and so should be paid second highest? Etc.

There are 4 job evaluation pay systems

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Job Evaluation Pay Systems

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.3, p. 490
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Job Evaluation: Job Ranking

Method:
Review the job descriptions Rank the jobs in order of relative worth or importance to the organization
Frequently done by a committee of managers

Use the rank ordering to set pay for each job

Pay the highest ranked job the most, etc.

Weaknesses:
The rank ordering tells us that one job is worth more than another, but not how much more While the ranking takes care of internal equity, its not obvious how to take into consideration external equity

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Job Evaluation Pay Systems

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.3, p. 490
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Job Evaluation: Job Grading (Job Classification)

Method:
Create a sequence of job grades
Example: US Government GS system has 15 job grades: GS1 GS15

For each job grade, define the job grade in words

Example: Define each job grade in terms of:
Skill & knowledge Responsibilities Physical effort Working conditions

Use the job descriptions to classify each job into one job grade
Example (from the US Government GS pay system):
Carpenter = GS9

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Job Evaluation: Job Grading (Job Classification)

Method (more)
Select a set of benchmark (key) jobs
Jobs with well-known, stable job content Jobs that are common in many organizations Jobs that represent the full range of job grades Jobs for which market pay data is available

Collect market pay data for the benchmark jobs Use the market pay data to set the pay range for the job grades
Example: http://www.opm.gov/oca/08tables/html/gs.asp
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Job Evaluation: Job Grading (Job Classification)

Strengths:
The sequence of job grades allows us to deal with internal equity The use of market pay data to set the pay range for each job grade allows us to deal with external equity

Weaknesses:
The classification of jobs into pay grades is subjective
Example: Carpenter = GS9, not GS8 or GS10 (are we sure?)

The method relies heavily on job titles in setting pay

Example: We have to assume that all Carpenter jobs are identical

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Job Evaluation Pay Systems

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.3, p. 490
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Job Evaluation: Factor Comparison

Method:
Define a set of compensable factors
Compensable factors: the characteristics about jobs that are used to set pay Example: skill, effort, responsibility, & working conditions

Select a set of benchmark (key) jobs

Jobs with well-known, stable job content Jobs that are common in many organizations Jobs that represent the full range of jobs being evaluated Jobs that represent the range of each compensable factor
Example: jobs with various skill levels, effort levels, etc.

Jobs for which market pay data is available

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Job Evaluation: Factor Comparison

Method:
Rank the benchmark jobs on the basis of each compensable factor
Example: Rank the jobs from least skilled to most skilled

Collect market pay data for the benchmark jobs For each benchmark job, allocate market pay across the compensable factors
Example: If market pay for a benchmark job is $15, how much of that $15 is for skill, how much for effort, how much for responsibilities, and how much for working conditions?

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Job Evaluation: Factor Comparison

Method (more)
For each benchmark job, compare the factor rankings to the pay rankings & make adjustments as needed to bring the rankings into agreement
Example: Make sure that the job ranked as having the greatest skill requirements also has the greatest amount of pay for the skill compensable factor

Construct a job comparison scale, and slot the benchmark jobs onto the pay scale for each compensable factor
Example: For the skill compensable factor, create a skill pay scale that shows where each benchmark job falls on the scale

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Job Evaluation: Factor Comparison

Method (more)
Slot all the non-benchmark jobs into their proper places on the pay scale for each compensable factor Determine the pay for each job by adding up the pay from each compensable factor
Example: Pay = pay from skill + pay from effort + pay from responsibility + pay from working conditions Example: Fisher, Schoenfeldt, & Shaw (2006), Table 11.7, p. 498
Job 4: Pay = $3.50 for skill + $2.50 for effort + $3.75 for responsibilities + $1.25 for working conditions = $11.00

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Job Evaluation Pay Systems

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.3, p. 490
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Job Evaluation: Point Method

Method:
Define a set of compensable factors
Compensable factors: the characteristics about jobs that are used to set pay Example: 11 compensable factors: (1) Education (2) Experience (3) Knowledge (4) Physical demands (5) Mental demands (6) Responsibility for equipment & work processes (7) Responsibility for materials & products (8) Responsibility for safety (9) Responsibility for the work of others (10) Working conditions (11) Job hazards

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Job Evaluation: Point Method

Method (more)
Define a factor scale for each compensable factor
Factor scale: define in words the different levels (or degrees) of the compensable factor
Example: Factor scale for the Knowledge factor: 1st Degree Knowledge: reading & writing; simple arithmetic with whole numbers only; following instructions 2nd Degree Knowledge: arithmetic with decimals & fractions; use of formulas, charts, graphs, or diagrams 3rd Degree Knowledge: mathematics with complex formulas, drawings, or diagrams; precision measuring instruments 4th Degree Knowledge: advanced trades mathematics; advanced use of complex formulas, drawings, or diagrams 5th Degree Knowledge: higher-level engineering math; advanced use of complex engineering theories & practices

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Job Evaluation: Point Method

Method (more)
Assign points to each degree of each compensabl e factor
Example:
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Job Evaluation: Point Method

Method (more)
Perform the job evaluation: evaluate each job to determine the number of points to assign to that job on each compensable factor
Usually done by a committee of managers Use the job descriptions as the source of job information Add up the number of points from each compensable factor to get the total points for the job
Jobs with more total points have more of the things we value in setting pay This should take care of internal equity

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Job Evaluation: Point Method

Method (more)
Select a set of benchmark (key) jobs:
Jobs with stable job content Jobs that are common in lots of organizations Jobs that can be defined with precision Jobs that are performed similarly across different organizations Jobs that represent the range of jobs being evaluated Jobs for which market pay data is available

Identify the relevant labor market for each benchmark job

Local, regional, national, or international

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Job Evaluation: Point Method

Method (more) For each benchmark job, collect market pay data in the relevant labor market

Either use pay data collected by others, or Collect pay data yourself by performing a pay survey (wage & salary survey): Identify a sample of organizations in the relevant labor market that have the benchmark job Contact each organization & collect pay data for the job title (minimum pay & maximum pay) Avoid anti-trust (pay-fixing) concerns:

Use an independent consultant to collect the pay data Collect pay data that is several months old (e.g., 3 months) Include at least 5 employers for each job title Have the consultant report only averages (e.g., average minimum pay for the job title, average maximum pay for the job title)
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Job Evaluation: Point Method

Method (more)
Estimate the market pay lines
Estimate 2 simple regressions using the benchmark jobs as the data points
Minimum pay line: regress minimum pay (dependent variable) on points (independent variable) Maximum pay line: regress maximum pay (dependent variable) on points (independent variable)

Use the market pay lines to determine the pay ranges for each job (both benchmark & nonbenchmark jobs) Optional: create pay grades
This takes care of external equity

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Job Evaluation: Point Method

Example of a website that implements the Point Method (this website would be a good resource to use for the Compensation element of your Team Project): http://data.bls.gov/PDQ/outside.jsp?survey=nc
Important note: The website uses pop-ups, so change your browser setting to allow pop-ups from this website before starting In Box 1, select the area based on the relevant labor market for the job title In Box 2, select the occupation that includes the job title In Box 3, click the Get help choosing a Work Level button
This will pop open a new window where you perform the job evaluation using 9 compensable factors: Knowledge, Supervision Received, Guidelines, Complexity, Scope and Effect, Personal Contacts, Purpose of Contacts, Physical Demands, & Work Environment Perform the job evaluation, then click Accept Level (this will pop you back to the other page); suggestion: use a committee to do the job evaluation

In Box 4, click Get Data (this will pop open a new window with the results)

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Job Evaluation Pay Systems

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.3, p. 490
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Plotting a Wage Curve

Figure 114

VALIDATING THE POINT MANUAL 1 - Graph the Key Jobs

Point-Factor Method 14 Key Jobs
$12.00 $11.50 $11.00 $10.50 Wages/hr

$10.00
$9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100 150 200 250 300 350 400 450 Points Assigned

VALIDATING THE POINT MANUAL 2 - Plot the Regression Line

Point-Factor Method 14 key jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100 150 200 250 300 350 400 450

Wages/hr

Points Assigned

Y = 6.4075 + 0.01075(X)

VALIDATING THE POINT MANUAL 3 - Graph 10% Above and Below the Regression Line Are >90% of Key Jobs Within the Bounds?
Point-Factor Method 14 key jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

10% above: Y1.1 = 7.0482 + 0.01183(X)

Wages/hr

10% below: Y0.9 = 5.7667 + 0.00968(X)

150 200 250 300 350 400 450

Points Assigned

Y = 6.4075 + 0.01075(X)

VALIDATING THE POINT MANUAL 4 - Graph 15% Above and Below the Regression Line Are ALL Key Jobs Within the Bounds?
Point-Factor Method 14 key jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

15% above: Y1.15 = 7.3686 + 0.01236(X)

Wages/hr

150

200

15% below: Y0.85 = 5.4463 + 250 300 350 400 0.00914(X)

Points Assigned

450

Y = 6.4075 + 0.01075(X)

CREATING PAY GRADES AND RANGES Build Pay Grades 50 Points Wide Between the High and Low Regression Lines
Point-Factor Method 14 key jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

15% above: Y1.15 = 7.3686 + 0.01236(X)

Pay Grades

Wages/hr

150

200

15% below: Y0.85 = 5.4463 + 250 300 350 400 0.00914(X)

Points Assigned

450

Y = 6.4075 + 0.01075(X)

DISPLAY FINAL PAY GRADES AND RANGES (Point Method Pay System is now Complete)
Point-Factor Method 14 key jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

11.39 10.77 Pay Grades 9.53 8.91 10.15

Wages/hr

9.33 8.87 7.96 7.50

150 7.05 200 250 300

8.4 2
350 400 450

6.69

Points Assigned

PLOT NON-KEY JOBS ON GRAPH WITH PAY GRADES AND RANGES

Point-Factor Method 40 Non-key Jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

11.39 10.77

10.15
9.53 8.91 8.87 7.96 7.50
150 7.05 200 250 300 350 400 450

Wages/hr

9.33 8.4 2

6.69

Points Assigned

WHAT SHOULD BE DONE ABOUT UNDERPAID JOBS? (Green Circle Rates)

Point-Factor Method 40 Non-key Jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

11.39 10.77

10.15
9.53 8.91 8.87 7.96 7.50
150 7.05 200 250 300 350

Wages/hr

9.33 8.4 2

Green Circle 400 450

6.69

Points Assigned

WHAT SHOULD BE DONE WITH OVERPAID JOBS? (Gold Circle Rates)

Point-Factor Method 40 Non-key Jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

11.39

Gold Circle
10.15
9.53 8.91

10.77

Wages/hr

9.33 8.87 7.96 7.50

150 7.05 200 250 300 350 400 450

8.4 2

6.69

Points Assigned

WHAT SHOULD BE DONE WITH OVERPAID JOBS? (Silver Circle Rates)

Point-Factor Method 40 Non-key Jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

Silver 10.77 Circle

10.15
9.53 8.91

11.39

Wages/hr

9.33 8.87 7.96 7.50

150 7.05 200 250 300 350 400 450

8.4 2

6.69

Points Assigned

WHAT SHOULD BE DONE WITH OVERPAID JOBS? (Red Circle Rates)

Point-Factor Method 40 Non-key Jobs
$12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 100

12.62 12.0 0

Red Circle
10.77

11.39

10.15
9.53 8.91 8.87 7.96 7.50
150 7.05 200 250 300 350 400 450

Wages/hr

9.33 8.4 2

6.69

Points Assigned

Pay Policy Issues

Periodically update the pay ranges Jobs above or below the desired pay range:
Green circle jobs: jobs whose current pay is below the pay range for the job
Develop & implement a plan to give these jobs slightly larger pay increases to catch the job up with the pay range

Red circle jobs: jobs whose current pay is above the pay range for the job
Develop & implement a plan to give these jobs slightly smaller pay increases to allow the pay range to catch up with the job

Compression: the pay differences across jobs shrink over time

Can mess up internal equity because the pay differences across jobs gets too small

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Pay Policy Issues

Broadbanding: combine adjacent pay ranges to create a smaller number of pay ranges in which each pay range is wider

May help with red & green circle jobs & with compression Frequently implemented as part of restructuring & downsizing

Source of figure: Fisher, Schoenfeldt, & Shaw (2006), Figure 11.7, p. 511
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Pay Policy Issues

Equal Pay Act: equal pay for equal work
Forbids sex discrimination in pay when the employees perform the same job in the same organization
If a man and a woman are both doing the same job in the same organization, dont pay them differently because of their sexes

Comparable worth: equal pay for equal worth

Pay differences based on other factors is okay (e.g., seniority, job performance, etc.)

If a man and a women are doing different jobs, but the company evaluates that both jobs are of equal value to the company, then they should be paid the same

Example: If a companys job evaluation determines that a secretarial job (held mostly by women) and a maintenance job (held mostly by men) make contributions of equal value to the company, then the two jobs should be paid the same

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STRATEGIES FOR HANDLING DEVIATIONS ABOVE AND BELOW THE RECOMMENDED BASE PAY RATE

GREEN CIRCLE RATES

RAISE PAY UP AS SOON AS POSSIBLE TO THE APPROPRIATE LEVEL

GOLD CIRCLE RATES

LEAVE RATE AS ISDO NOT ADJUSTCONTINUE GIVING RAISES & COLAs

SILVER CIRCLE RATES

LEAVE RATE AS ISDO NOT ADJUST, CONTINUE COLAs BUT NOT RAISES

RED CIRCLE RATES

MUST BRING RATES DOWN TO THE PROPER LEVEL

RED CIRCLE STRATEGIES

BRING RATES IMMEDIATELY DOWN INTO LINE Give proper notification first

PAY A LUMP SUM SETTLEMENT Bring rates into line, but pay a one-time severance settlement
PROVIDE AN ADDER SUPPLEMENT Bring rates into line, but issue a supplemental check each pay period that is gradually reduced over time FREEZE PAY RATE IMMEDIATELY No raises given for seniority or COLA Eventually, the entire organizational pay structure will rise (due to COLAs and wage surveys) which will bring the pay rate back into range, at which time the worker will again get raises and COLAs. TRANSFER THE WORKER TO A HIGHER-RATED JOB

III. Wage & Benchmarking

Methodology for Developing Compensation Structure

Step 1 Step 2 Selected Benchmark Jobs Obtained Market Data on Benchmark Jobs Step 3 Developed Salary Structures for CUA Step 4 Analyzed All Full-Time and Part-Time Regular Positions in Comparison to Benchmark Jobs Step 5 Identified Positions With Salaries Outside of the Assigned Salary Level

Step 1 Selected Benchmark Jobs

Standard Positions that are Commonly Defined Among Different Organizations Criteria for Selected Benchmark Jobs:
Representation from All Organizational Levels Representation from All Divisions\Departments

Benchmark Jobs:
68 Positions Selected Represents 34 Departments Represents 247 Employees

Step 2 Reviewed Market Data

Management Positions
Recruitment on a National Basis from Higher Education Market Data:
CUPA-HR* National Survey CUPA-HR* Survey By Operating Budget CUPA-HR* Survey By Peer Institutions Price Waterhouse Coopers Survey of Non-Profits Mercer Human Resources Management Survey Watson Wyatt Industry Reports on Management Positions

* College and University Professional Association for Human Resources

Market Data (Cont.)

Professional Positions
Recruitment on a National, Regional and Local Basis Primarily from Higher Education Market Data:
CUPA-HR* National Survey CUPA-HR* Survey By Operating Budget CUPA-HR* Survey By Peer Institutions Price Waterhouse Coopers Survey of Non-Profits Mercer Metropolitan Benchmark Survey Watson Wyatt Geographic Reports on Professional Personnel

* College and University Professional Association for Human Resources

Market Data (Cont.)

Support Positions
Recruitment on a Regional and Local Basis from All Industries Market Data:
Watson Wyatt Geographic Reports on Office Personnel Watson Wyatt Geographic Reports on Skilled Trades Human Resource Association of the Natl Capital Area Mercer Metropolitan Benchmark Survey Cordom Associates Survey of Non-Profits Dietrich Associates Support Services Survey

Step 3 Developed Salary Structure

Three Salary Structures
General Industry (13 Levels) Academic Support and Research (11 Levels) Information Technology (11 Levels)

Midpoint of Salary Range Based on 50 Percentile of Market Data (considered to be 100% of market wages since the midpoint matches the market midpoint) Midpoints Between Levels Separated by:
18% for General Industry* 16% for Academic Support and Research* 13% for Information Technology*

Spread of 60% Between Minimum and Maximum Salaries

* Percentages Determined by Regression Analysis

Salary Structure (Cont.)

60%
Level 2 I $20,900
Minimum

$27,200
Midpoint

I $33,400
Maximum

18%

Level 3

$24,700
Minimum

$32,000
Midpoint

$39,400
Maximum

Step 4 Analyzed Staff Positions

Every Position Evaluated Against A Selected Benchmark Job Position Evaluated By Each Committee Member On:
Required Knowledge, Skills and Experience Complexity and Conceptual Thinking Decision Making Authority (Autonomy) Required Interpersonal Skills Supervisory\Management Level Impact on CUAs Strategic Plan

Evaluations Shared With Area Administrators

Reference
Gary Dessler, text book of Human resource management, 10th edn, chapter 11. Fisher ,Schoefeldt & Shaw, text book of Human resource management, 6th edn, chapter 11. A Roundtable Discussion: Market Based Pay Structures for Reality Based Pay, July 2005 by Harlon Group. Paul L. Schumann, Human Resource Management, compensation systems, chapter 10. Job evaluation,www.businessfaculty.utoledo.edu/ddwyer/HURM4650/.../job eval.ppt

Thank You