Question

4-13 Considering our discussion of employee roles in strategic compensation (Chapter 1), how can companies explain employees’ contributions to company profits? How would the conversation go with administrative staff members compared to sales professionals?

5-13. Compare and contrast person-focused pay and job-based pay. Discuss the advantages of person-focused pay to employers. 


6-12. Why must a job analysis be reliable and valid? What can a compensation professional do to ensure that a job analysis is reliable and valid?


 7-11. Is it appropriate to utilize the same pay mix arrangement for clerical employees and sales professionals? Explain your answer and how the pay mix arrangements might differ. 


7-12. Explain what the market pay line is. How is it used in the context of pay level policies such as market lead, market lag, and market match? 


Answer 1

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4-13 Considering our discussion of employee roles in strategic compensation (Chapter 1), how can companies explain employees’contributions to company profits? How would the conversation gowith administrative staff members compared to sales professionals?

The employees being the primary stake holders of the strategic compensation plans plays a vital role in the successful implementation of the strategic compensation plans. Only if the employees understand the compensation plans and work accordingly it could be implemented effectively and can be competitively presented among the competitive organizations.

The compensation officers or the teams can conduct effective training programs to the employees so that they can gather information regarding the same. Through this companies can also communicate and explain to the employees about how they can contribute to the achievement of the organizations profit.

While considering the sales professionals communicating about profit will be based on the sales increase which is easy and quickly understandable. When communicating to the administrative staff members about the achievement of the company profits, the trainer will have to explain the exact operations of the organization so that they can understand how they can contribute to profit generation. They can speak about the proper documentation, designing effective compensation, maintaining the details of the staffs properly, etc.

5-13. Compare and contrast person-focused pay and job-based pay. Discuss the advantages of person-focused pay to employers.

The following are the differences between Person focused and job based pay;

Pay level determination;

• A person is focused on skill valuation

• Job based, a market basis for job valuation.

Base Pay ;

• Person- focused, is Awarded on how much an employee knows or on ability level.

• On job based, it is Awarded on the value of “compensable factors”

Base pay increases ;

• Person- focused is Awarded based on an employee’s gain in knowledge or skills.

• Job based is Awarded for attaining a job defined goal

Job promotion ;

• Person- focused is Awarded on an employee’s proficiency and skills base on past work.

• Job based is Awarded for beyond job performance principles

Key advantage to employees ;

• Person- focused facilitates enriching and Job variety

• Job based Performs on work and pay received for a defined job

Key advantage to employers ;

• Person- focused on Work flexible schedule

• Job based on easy pay administration system

Alternatively:

Person-focused pay system refers to the pay based on the employee's skills, knowledge, abilities and behavior. Job-based pay refers to the pay based on job analysis and the job requirement.

The difference between person-focused pay system and job-based pay are as follows: -

• In person focused pay, the salary is based on personal skills whereas in job-based pay, the salary is based on the position.
• The reasons to implement person-focused pay system is that it helps in connecting to job related activities, makes the employee independent, make the work environment diverse and result in innovation. Job-focused pay lack all these and the person only perform the particular task as per his or her job position.
• The employee is paid for the value of the work performed in a job-based pay whereas in skill-based pay, the supervisor assesses the values of the skills and qualities of the employees.

The three advantage of a person-focused pay system are: -

• It helps in providing better customer service and focus on increasing customer loyalty.
• This helps in increasing the productivity of employees as they will be more focused in improving and exercising new skills. Employees will be more flexible and perform multi-tasking.
• It helps in reduction of staff across the organization and remove the extra staff as most of the employees are skilled.

The disadvantages of person-focused pay system are: -

• It increases the hourly cost, labor cost and overhead cost.
• There will be problem combining the personal focused pay system with that of the existing incentive pay system.
• The training may not be effective right away.

The advantages of job-based pay are as follows: -

• The employees get paid for the value of the work performed.
• This type of pay system reduce discrimination.
• This is the more predictable method of pay for the employees.

The disadvantages of job-based pay are as follows: -

• There are little chances of upward pay mobility for employees.
• This type of pay may result in demotivating employees.
• This influence organizational politics.

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