Question

ad كلية الإمارات للتكنولوجيا Emirates College of Technology 108/2011 Mini Case Study Group Work #1 You have recently been appointed as a compensation manager in your company. In line with the HR department's vision to move gradually from a job-based to a more person-based compensation structure, the HR Director asks you to develop a comprehensive plan where you will have to specify the followings: 1. To identify the major differences between the two compensation systems

Answer 1

1. The major difference between job based compensation and person based compensation structure is that in job based compensation structure salary payments are made based upon the specific requirements of the jobs , the working conditions , job responsibilities & duties and in person based compensation structure salary payments are made based upon the knowledge , competences and skills of the employee who is on the job . So in person based compensation structure it is more of a knowledge , competency or skill based pay structure . So in job based compensation we may not have the most competent person on the job and in person based compensation we always have the most competent person at the helm of the job . In job based compensation structure person at the top may be over paid and person at the bottom may be under paid .
2 Action plan for developing the new compensation structure .

A. Analyse and develop job descriptions for all jobs that needs to be done for achieving the management objectives .

B. Based upon the job descriptions we find out the skills , competencies and knowledge required for each job description .

C. Then we price the competencies , skills and knowledge required for each job description from competitor’s survey data . Even the salaries for support staff are derived from the local market’s or region’s survey data .

D. Then we establish the salaries for each individual based upon their knowledge skill and competencies .

3. Short Note for Board of Management in support of implementation of new compensation structure.

Dear Sir/Madam ,

We are living in a highly competitive work environment where it is very highly imperative that we produce the best results in terms of efficiency and effectiveness in what ever job we do in the organisation . For this to happen we need to have the most competent person at the helm of each job done at our organisation . This can only be achieved if we move from a job based compensation system to a more of a person based compensation system . This compensation system has other major advantages over the compensation system we currently have . The most important advantage is that it leads to a culture of improvement and continuous learning and we have participative management . Eventually it leads to a competitive , leaner & flexible staffing . Our organisation can grow in leaps and bounces once this compensation system is implemented .

Thanks and regards ,

Sincerely Yours ,

Sandeep Vohra