Designing pay structure case study

HRCU 647 Compensation

7 December 2015

By: Joshua Allen, Simranjit Dhaliwal, and Anthony Figueroa

Overview Task A

Job Description Process

Task B Breakdown of Degrees Compensable Factors breakdown Rankings and Weighted Mean

Task C Task D & E

Simple Regression and R Squared Task F, G, H & I

Base Pay 3% Increase Pay Range

Task J Pay Structure Implications

References

Task AProcess of Developing a Job Description:

Went thru O*Net

Searched for a detailed reports on Benefits Manager Position

Sorted thru reports, to pick applicable duties and descriptions

Picked (selected) which summaries will be applicable for Benefits Manager Position, for this assignment

After a detailed discussion created our job description

Task A Benefit Manager Job DescriptionArch Consulting Position: Benefits Manager

Job Summary Administration of employee benefits in all organizational operations. Provides guidance and assistance on all employee benefit plans. Coordinates special guidance and assistance to all agency partners on various employee benefit plans with a high degree of customer satisfaction, expertise and timeliness.

Essential Job Task

Design, evaluate and modify benefits policies to ensure that programs are current, competitive and in compliance with legal requirements.

Analyze compensation policies, government regulations, and prevailing wage rates to develop

competitive compensation plan.

Fulfill all reporting requirements of all relevant government rules and regulations, including the Employee Retirement Income Security Act (ERISA).

Direct preparation and distribution of written and verbal information to inform employees of

benefits, compensation, and personnel policies.

Administer, direct, and review employee benefit programs, including the integration of benefit programs following mergers and acquisitions.

Identify and implement benefits to increase the quality of life for employees, by working with

brokers and researching benefits issues.

Manage the design and development of tools to assist employees in benefits selection, and to guide managers through compensation decisions.

Mediate between benefits providers and employees, such as by assisting in handling employees'

benefits-related questions or taking suggestions.

Analyze statistical data and reports to identify and determine causes of personnel problems and develop recommendations for improvement of organization's personnel policies and practices.

Job Content

Indoor, environmentally controlled; telephone; contact with other.

Knowledge, Skills and Abilities Knowledge:

Personnel and Human Resources — Knowledge of principles and procedures for personnel recruitment, selection, training, compensation and benefits, labor relations and negotiation, and personnel information systems.

Job Evaluation Form (Task B):Compensable Factor / Weight Degree

Skill (50%) - Education Level (25%) - Degree of Technical Skills (25%)

Category: Points:

Education:(level of education attained)

High School 1

Associates 2

Bachelors 3

Masters/Graduate 4

Degree of Technical Skills:(# of technical skills required to perform job)

No Skills required 1

1-2 Skills 2

3-4 skills 3

5+ skills 4

Job Evaluation Form (Task B):Compensable Factor / Weight Degree

Responsibility (30%) - Scope of Control (10%) - Impact of Job (20%)

Category: Points:

Scope of Control:(# of people working under the employee)

0 1

1-2 2

3-4 3

5+ 4

Impact of Job:(%, how the job effects the overall organizational mission)

25% 1

50% 2

75% 3

100% 4

Job Evaluation Form (Task B):Compensable Factor / Weight Degree

Effort (20%) - Degree of Problem Solving (10%) - Task Complexity (10%)

Category: Points:

Degree of Problem Solving:(involvement)

Identify causes 1

Brainstorm solutions 2

Decide on solutions 3

Apply the solution 4

Task Complexity:(Amount of judgment, initiative and ingenuity involved )

25% of daily tasks 1

50% 2

75% 3

100% 4

Task B Compensation Evaluation FactorsJob Evaluations

Compensation Factors Job Eval sheet for SHRM project

(5) Benefits Manager

  Degree (1,2,3,4,) Weight Points

Skills (50%)  

Education Level 3 25% 0.750

Degree of Technical Skills 3 25% 0.750

Responsibility (30%)  

Scope of Control 3 10% 0.300

Impact of Job 3 20% 0.600

Effort (20%)  

Degree of Problem Solving 3 10% 0.300

Task Complexity 2 10% 0.200

    Total 2.900

Task C

Outliers?

No, we did not find any outliers in our research

All of the data points are within the realm of possibility, for the given jobs

Ranking and Weighted Mean Salary(Y and X information)

 Weighted Mean Salary dollars = y Point Score = x  

From Eval sheet Points Score  

(1) Front Desk $19,944.44 120  1.2  

(2) Admin Assistant $29,458.33 160  1.6  

(3) Payroll Assistant $34,000.00 215  2.15  (4) Operations Analyst $56,875.00 270  2.7  

(5) Benefits Manager $62,900.00 290  2.9  

           

           

Calculation of Weighted Mean  Weighted Mean for Administrative Assistant      

 Number of Incumbents

Companies Salaries

Company Salary multiplied by number of incumbents in that company  

  4 $25,000.00 $100,000.00    4 $31,000.00 $124,000.00    3 $30,000.00 $90,000.00    5 $33,000.00 $165,000.00    4 $29,000.00 $116,000.00    4 $28,000.00 $112,000.00  Sum Total Incumbents 24 $707,000.00 $29,458.33Sum of Companies Salaries

divided by total Incumbents = Weighted Mean 

Sum Total of Companies Salaries

                Weighted Mean = Multiply the company incumbents by the average

salary. Total all incumbents and total the new salaries. Divide total salaries by total number of incumbents.

       

Tasks D & E Simple Regression and R SquareSUMMARY OUTPUT

Regression Statistics   Weighted Mean Sallary dollars = yPoint Score = x    

Multiple R 0.972512645 Front Desk $19,944.44 120   R Square 0.945780845 Simple Regression Admin Ass $29,458.33 160   Adjusted R Square 0.927707793 Payroll $34,000.00 215   

Standard Error 4951.387624 Ops Anal $56,875.00 270   

Observations 5 Ben Manager $62,900.00 290            

ANOVA           df SS MS F Significance F          

Regression 1 1282959297 1282959297 52.33099891 0.005447967          

Residual 3 73548718.2 24516239.4    

Total 4 1356508015         

  y = intercept  

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%Lower 95.0% Upper 95.0%   a = variable  

Intercept -11995.801 7605.043459 -1.57734812 0.212816314 -36198.44346 12206.84146 -36198.4 12206.84146   Bx is variable times points  

X Variable 1 249.4377088 34.48121785 7.234016789 0.005447967 139.7030845 359.1723331 139.7031 359.1723331 y= a+BX BX with x = points      

RESIDUAL OUTPUT

Observation Predicted Y Residuals Standard Residuals1 $17,936.72 2007.72039 0.4682153752 $27,914.23 1544.100927 0.3600958573 $41,633.31 -7633.306391 -1.7801440064 $55,352.38 1522.619625 0.355086257

5 $60,341.13 2558.865449 0.596746516

Tasks, F Base pay, Task G 3% increase, Task I Pay Rage

  Task F Task G & H Task I

Position Base Pay New Base Pay with 3% increase

Low Range - 10% High Range + 10%

(1) Front Desk $17,936.72 $18,474.83 $16,627.34 $20,322.31

(2) Admin Assistant $27,914.23 $28,751.66 $25,876.49 $31,626.83

(3) Payroll Assistant $41,633.31 $42,882.31 $38,594.08 $47,170.54

(4) Operations Analyst $55,352.38 $57,012.95 $51,311.66 $62,714.25

(5) Benefits Manager $60,341.13 $62,151.37 $55,936.23 $68,366.51

Task J Considerations Does this pay structure make good business sense?

Do you think it is consistent with the organization’s business strategy? What are the implications of this pay structure for other HR

systems, such as retention and recruiting?

This is good business strategy because they are an established business and expanding to a new market.  By doing so they are targeting their pay to be slightly above their competition this will attract good applicants, and hopefully keep them.  Furthermore, this will alleviate any turnover issues that may come from paying too little.

Task J Continued What are the implications of this pay structure for other HR systems, such as

retention and recruiting?

This is good business strategy because they are an established business and expanding to a new market.  By doing so they are targeting their pay to be slightly above their competition this will attract good applicants, and hopefully keep them.  Furthermore, this will alleviate any turnover issues that may come from paying too little.

Conclusion

Items covered in this presentation: Job Description Process Breakdown of Degrees Compensable Factors breakdown Rankings and Weighted Mean Simple Regression and R Squared Base Pay 3% Increase Pay Range Considerations

Pay Structure Implications

References Burk, L.A., (2008) Designing A Pay Structure, print

O*Net. (2015) Available at: https://www.onetonline.org/

Milkovich, G., Newman, J., & Gerhart, B. (2014). Compensation (11th ed.). New York: McGraw-Hill/Irwin.