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Overview: The importance of compensation varies depending on the viewpoint, as described by Barry Gerhart and Jerry Newman in Compensation. Society
views compensation as a measure of justice; managers may view compensation as a major expense or a motivator; employees view compensation as an
entitlement or as an incentive. Regardless of the viewpoint, fairness and equity are essential. Compensation must also be up-to-date, competitive in the market,
and easy to understand.
Aligned pay structures support the way the work gets done, fit the organization’s business strategy, and are fair to employees. Organizations typically task an inhouse human resource (HR) professional or hire an HR consultant to create and maintain the company’s pay structure.
Prompt: Salary Surveys: To ensure the pay structure is externally competitive, a salary survey should be conducted, as stated by Lisa Burke in Designing a
Pay Structure. For the results of a survey to be valid, the market pay data must be from a relevant labor market. Since most of the office support, HR, and
operations jobs will be filled by regional candidates, local pay data should be gathered.
A salary survey is developed by your team and sent to industry competitors. Descriptive data such as organization size, industry, annual revenue as well as
compensation data for each of the benchmark jobs were collected. Surveys were completed and returned by six organizations that recruit and hire similar
positions within a 90-mile radius of Rockville. Base pay data from the responding organizations are reflected in Appendix B of the Final Project Case Study.
Organizations are referenced as companies A, B, C, D, E, and F for anonymity. Those who participated also received copies of the results for their
In this assignment, you will address the external competitiveness component of a pay structure using the specifically designed case scenario. Read the Final
Project Case Study (linked to in your course) for detailed information on the requirements for this project.
Specifically, you must address the critical elements listed below.
A. Calculate the weighted means of base pay for each of the following benchmark jobs: administrative assistant, operations analyst, production worker,
and benefits manager from the six companies listed in Appendix B of the final project case study.
B. Calculate the predicted base pay for each of the following benchmark jobs: administrative assistant, operations analyst, production worker, and
C. Create a market pay line using the following benchmark jobs: administrative assistant, operations analyst, production worker, and benefits manager.
Clearly label your job evaluation points and salaries.
D. Calculate the adjusted pay ratesfor each benchmark job based on your company’s decision to lead in base pay by 3%.
E. Create pay grades by combining benchmark jobs that are substantially comparable for pay purposes. Clearly label your pay grades and explain why
you combined any benchmark jobs to form a grade.
F. Create pay rangesincluding minimum and maximum for each of the pay grades based on pay grades created in item E above.
Guidelines for Submission: Your final project will be a Word document, approximately 8 pages in length (plus a cover page and references) and must be
written in APA format. Your Word document may include Word tables, Word lists, Excel screenshots, and rationale in written paragraphs. Use double spacing, 12-
point Times New Roman font, and one-inch margins