Total compensation study guide

Terms:
Internal alignment: The pay relationships among different job/skills/competencies within a single organization.
Pay Structure: The array of pay rates for different work or skills within single organization.
• Shaped by: o External factors:
 Economic pressures
 Government policies, laws, regulations
 Stakeholders
 Cultures and customs o Organization factors
 Strategy
 Technology
 Human capital
 HR policy
 Employee acceptance
 Cost implications o Internal structure
 Levels
 Differentials
 Criteria
Differentials: Pay differences among levels
Content: Work performed in a job and how it gets done
• Ex: tasks, behaviors, knowledge required, etc.
Value: The worth of the work: Its relative contribution to the org objectives
Job-based (position) based structures: Relies on the work content
• Ex: tasks, behaviors, responsibilities
Person-based structures: Focus is on the employee
• Ex: the skills, knowledge, or competencies the employee possesses, whether or not they are used in the employee’s particular job.
Tailored vs. Loosely Coupled Structure
• Tailored: detailed tasks or steps to follow
• Loosely coupled: more flexibility
• Mcdonalds vs. Apple
Hierarchical vs. Egalitarian Structure: Exhibit 3.4
Job analysis: A process for gathering, documenting and analyzing information in order to accurately describe the job performed and your organization
• Identifies similarities and differences in the work
Job description: Summary reports that identify, define, and describe the job as it is actually performed
• Describes the essential functions of a job and the frequency and importance of all tasks and responsibilities associated with a particular job.
Job evaluation: Comparison of jobs within an organization
Job structure: An ordering of jobs based on their content or relative value
• Arrange jobs in order of importance within your company. Compensation philosophy and objectives will play a critical role in