Designing a Pay Structure

Download and read the SHRM Case Study and Integrated Application Exercises: Designing A Pay Structure workbook.
Download and review the Designing a Pay Structure template.
In this workshop, for the written assignment, you will begin the tasks that are listed in the SHRM case study, placing your responses in the appropriate section of the template:
Task A(1): Create a complete one-page job description for the Benefits Manager position using O*Net. Place the completed job description in Appendix A of the paper.
Task A(2): Identify compensable factors and define degrees for each.
Task B: Calculate the job evaluation points for the administrative assistant, payroll assistant, operational analyst, and benefits manager jobs. Provide rationale for assigning specific degrees to the various jobs.
Task C(1): If there were any outliers (i.e., extreme data points) in these data, what would you recommend doing with them? [From this point forward, assume no extreme data points exist in the dataset.]
Task C(2): Calculate the weighted means (for base pay) for each benchmark job.
Task D: Conduct a simple regression in Excel to create a market pay line by entering the job evaluation points (on the X axis) and the respective weighted average base pay (on the Y axis) for each benchmark job. Download the Simple Regression Analysis Guidelines.
Task E: What is your R squared (variance explained)? Is it sufficient to proceed?
Task F: Calculate the predicted base pay for each benchmark job.
Task G: Because your company wants to lead in base pay by 3 percent, adjust the predicted pay rates to determine the base pay rate you will offer for each benchmark job.
Task H: Create pay grades by combining any 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.
Task I: Use your answer to Task H to determine the pay range (i.e., minimum, midpoint, and maximum) for each pay grade.
Task J: Given the pay structure you have generated, consider the following:
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?
Answers must be substantive to include theory and application. See the grading rubric for assignment expectations.

Sample Solution