Welcome
Defining Competitiveness
Learning Objectives:
Compensation Strategy: External Competitiveness
What Shapes External Competitiveness?
Labor Market Factors
Modifications to the Demand Side
Modifications to the Supply Side
Product Market Factors and Ability to Pay
Organization Factors
Relevant Markets
Competitive Pay Policy Alternatives
Consequences of Pay-Level and Mix Decisions:
Guidance from the Research
 Your Turn: Sled Dog Software
 Still Your Turn: Fit the Pay Mix Policy to the
Compensation Strtegy
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Compensation Strategy: External
Competitiveness
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External competitiveness is expressed in practice
by:
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Setting a pay level that is above, below, or equal to
that of competitors
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Determining mix of pay forms relative to those of
competitors
Pay level and pay mix decisions focus on:
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Controlling costs
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Attracting and retaining employees
What Is External Competitiveness?
External competitiveness refers to pay
relationships among organizations - an
organization’s pay relative to its
competitors.
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Designing Internally Consistent
Compensation Structure
See EXHIBIT 4.2
EXIBIT 4.1—Many ways to create internal structure
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Designing Internally Consistent
Compensation Structure
EXIBIT 4.1—Many ways to create internal structure
Example: Job Description
EXIBIT 4.2— Contemporary Job Description for Registered Nurse
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Designing Internally Consistent
Compensation Structure
Exibit: 4.3 Determining the Internal Job Structure
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Job Analysis:
The systematic process of collecting information that
identifies similarities and differences in the work.
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Why Perform Job Analysis?
In compensation, job analysis has two critical uses:
 Establishes
similarities and differences in the work
contents of the jobs
 Helps
establish an internally fair and aligned job
structure
Key issue for compensation decision makers:
 Ensuring
that data collected are useful and
acceptable to employees and managers involved
Conventional Job Analysis Procedure
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Exibit: 4.3 Determining the Internal Job Structure
What information should be collected for
job analysis?
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Exibit: 4.6 Typical Data collected for Job Analysis
How Can the Information Be
Collected?
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Conventional methods
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Questionnaires, interviews, observation
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Advantages: involvement increases understanding of
process
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Disadvantage: open to bias and favoritism
Please study EXHIBIT-10 in page 87
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How Can the Information Be Collected?
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Quantitative methods
 Statistical
analysis of result
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Advantages: practical and cost-effective
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Disadvantages:
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Important aspects of a job may be omitted
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Resulting job descriptions can be faulty
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Who collects the information?
HR generalists and supervisors can collect information.
Who provides the information?
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Expertise about work
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‘Two level above’ for managerial positions
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Subordinates and employees can also be involved.
Judging Job Analysis
Reliability
Reliability is a measure of the consistency of results among
various analysts various methods, various sources of data, or
over time.
If you measure something today and yesterday and got the
same results, or if I measure and get the same result you got,
the measurement is considered to be reliable. This doesn't
mean it is right-only that repeated measure give the same
result.
Validity
Validity examines the convergence of result among sources of
data and methods. If several job occupants, supervisors and
peers respond in similar ways to questionnaires, then it is
more likely that the information is valid.
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Judging Job Analysis
Acceptability
If jobholders and managers are dissatisfied with the initial
data collected and the process, they are not
likely to buy into the resulting job structure or the pay rates
attached to that structure. An analyst collecting
information through one-on-one interviews or observation is
not always accepted because of the potential for subjectivity
and favoritism.
Usefulness
Usefulness refers to the practicality of the information
collected. For pay purposes, job analysis provides
work-related information to help determine how much to pay
for a job-it helps determine whether the job
is similar to or different from other jobs. If job analysis does
this in a reliable, valid, and acceptable way and
can be used to make pay decisions, then it is useful.
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Learning Objectives:
• What is Job analysis
• Designing Internally Consistent Compensation
Structure
• Example: Job Description
• Conventional Job Analysis Procedure
• Information should be collected for job analysis
• How Can the Information Be Collected?
• Who collects the information?
• Judging Job Analysis
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Summary
• What is Job analysis
• Designing Internally Consistent Compensation
Structure
• Example: Job Description
• Conventional Job Analysis Procedure
• Information should be collected for job analysis
• How Can the Information Be Collected?
• Who collects the information?
• Judging Job Analysis
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Thank you
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