.: Who Gets Paid What? - Getting The Internal Relativities Right
Category:Home / Business / Human Resources
Setting up a workable salary system requires a logical approach and the first step is one of the most important.
Establishing which jobs are where in the "pecking order" is one of the fundamentals in building an effective salary system. While this is not an exact science, having some form of evaluation in place to achieve it can remove a number of potential problems and avoid time consuming and costly decisions made "on the run" in the future.
Defining the job
To assess the value of a job to the organization relative to others we firstly have to define it and document it. A good job description should be succinct, define key results areas and measures of success.
Job Evaluation
There are several systems available for evaluating jobs and selecting the right system will depend on the size of your organization and the amount of resources available for support and maintenance.
For smaller organizations it is important to keep the system simple to avoid launching into a program that will not be maintained and, consequently, the initial investment in time and effort wasted.
The overall objective of a job evaluation system is to measure the relative worth of each job to the organization. The more complex systems will do this by looking at various factors within the job and allocating points to each factor. The total points will then establish the "worth" of the job.
A simpler system will look at the whole job, take into account similar factors and the rank the job against the others. The end result is a list of jobs from the highest value to the lowest. Some will have broadly equal values to each other.
It is important to note here that we are talking about worth of the job to the organization not the worth of the person - we can, and should, assess that separately.
The factors
While each system will vary, the factors will normally cover such areas as:
The level of knowledge and experience required to do the job
The impact of any decision making made by the job
The level and complexity of problem solving required
The amount of control over resources
Overall accountability
When a job is evaluated, it is important to ignore the person that may currently be in the job. Any perceived salary that may go with the job must also be ignored.
When each job is compared to other there will be a list of jobs from the biggest, or of most value to the organization to the smallest. In between there will be jobs where little differentiation can be made. Now the whole list can be divided into bands or grades that each contains jobs of similar value. This aids the administration of the system and is also recognition that job evaluation is not an exact science.
There may end up being between 4 and 15 grades. Small and medium size businesses may only have 4 to 8. The criteria for separating these grades should be that there is a perceived step or promotional level between them. Small differences between grades will only lead to added administration and very little financial differentiation.
The business benefits
By using system such as this it will reduce much of time taken on reactive and ad hoc decision making often made by managers and also convey to employees that there is a professional and systematic way of determining their remuneration. This will allow them to concentrate on the things that matter and increasing their rewards by increasing the "worth" of their job and their level of performance in it.
Article keywords: salary system, compensation, remuneration, job evaluation, relativities, pay system
Article Source: http://www.articles32.com
Paul Phillips is a Director of Horizon Management Group; a specialist human resource management consulting firm. He has over 30 years experience in HR and, while based in Australia, has worked in a number of overseas locations. www.horizonmg.com
.: New Human Resources Articles
1). Employers Should Understand California At-Will Employment Statute
How can employers in the state of California deal with tough employment laws? First, they need to understand what the rules are. Even though at-will employment in California is a simple idea, it is often misunderstood by both employers and employees.
2). How To Terminate An At Will Employee While Limiting Your Legal Risks
Why is it the worst at will employees, the ones that you simply must fire, are always the ones most likely to sue you? Unfortunately it is easy for a terminated at will employee to bring a case against you claiming you had no real ground for termination. Therefore you must know how to terminate an at will employee properly to limit your legal liability.
3). Business At Home Jobs- Dealing With Employees
Many businesses that begin in the garage or a room in the home quickly expand and suddenly they have taken over the entire basement, hired employees and are dealing with expansion issues. This short article discusses several issues associated with hiring employees, contractors and casual workers.
4). Comedy Hypnosis Shows - Are They Perfect For Your Next Corporate Party?
Comedy Hypnotist Shows... Are they a good bet for your next corporate holiday party? Have you ever seen one? Well, if not you owe it to yourself to see one someday. They are absolutely hilarious and can make a great form of entertainment for a corporate holiday party... But watch out!
5). Employment Background Checks To Filter Out Bad From Good Applicants
Post 9/11, with the ever-present threat of terrorist attacks, the world has become filled with distrust and suspicion. With the increased emphasis on security issues today, it has become commonplace in almost all sectors, for companies and employers to take extra caution by running employment background checks into the credentials and records of potential employees.
6). Everything You Need to Know about Work Permits
Not all jobs are created equal. A US citizen working in a any state in the country might not need to worry about obtaining a work permit, but there are instances when you will need one before you can officially go to your first day on a particular job.
7). Staff Motivation: Your Key to Company Success
The success stories of most of the multimillion dollar companies start out from something small.
.: Top Human Resources Articles
1). Non Financial Measures - Making Them Meaningful
Measuring performance is important but not always easy once we’ve got past the easy parts such as sales and budgets. The less quantifiable parts of a job also have to be measured.
2). The Importance Of Employee Orientation
Explains how best to conduct orientations for new employees.
3). Effective Induction - More Than Showing Them the Lunch Room
Having a new employee leave in the first week is not uncommon and is damaging for everyone. Getting them off to a good start is important for their perception of the organization and just plain good business.
4). Employers are Hiring Good Candidates, not Good Employees
Employer’s often use the wrong criteria to evaluate a job candidate. A survey showed the attributes of a good candidate aren’t the same as a top employee. Robert Cameron examines the problem and how to do a more effective job of pre employment testing.
5). Psycho Babble - Psychometric (Personality) Assessment Testing
As every one of Britain’s 100 largest companies and some 80% of all the rest, use some sort of personality test on prospective employees, we thought it would be a good idea to have a look at the subject.
6). The Five Basic Reasons Why A Salesperson Underperformed.
Identifying the true reasons of salperson underperformance.
7). Business Employment Recruiting Techniques
Some pointers and food for thought for business owners in need of finding good help.