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HRM 321
Oct 25, 2023
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Oscar Osorio HRM321-02 Dr. Caswell 2/27/2021 Chapter 8 Review Questions 1. There is no fixed pay policy for all organizations, the pay decisions depend on the situations and circumstances of an organization. For example, the pay policy for an organization that is in start stage can be different from that of an established organization. The following factors are vital for determining the pay policy of an organization. The quality of relationship or partnership an organization intends to establish with its employees. The aspiration of an organization to match the expectation of employment market. The achievement of a balance between revenue generation and the employee remuneration. A company's ability to include or allow flexible compensation forms. A company's ability to develop or create individualized pay mix to satisfy the employees. 2. The methodology used to gather data about compensation to welders and financial managers may differ. For example, the performance of a welder may be collected to observation techniques while a financial manager's performance may be gathered through structured interview. As the nature of the job differs the data collection methodology also differs. A welder's job is a standardized skill, and the compensation is
classified as a job-based structure. A financial manager's performance is based on the educational level and experience in the field; hence the compensation depends on the person-based factors. 3. Compensation survey design and implementation are influenced by the factors of relevant market. The most critical factors of relevant market that is linked to compensation survey include the following. Occupations: the level of skill required to perform a job and the demand for a particular occupation. Geography: The location of the job and the employee's willingness to relocate or commute for the job. Competitions: The practices of product competitors or industry members in evaluating the job. The compensation managers have observed that the members of a relevant market tend to respond to survey questions in a more or less uniform manner. For example, Engineers working in petroleum industry tend to expect remuneration and benefits in a specific manner. 4. Paying employees equitably and fairly is an ethical aspect of business. Paying employees less than the norms can encourage them to leave an organization and higher pay to employees can affect the profitability of a company; hence a balancing act is needed in compensation management. It is important for the organization to avoid pay discrimination and match the market expectations. A salary survey helps an organization to avoid salary discrimination in the following ways:
Survey provides compensation benchmarks, median, mode and average of salaries paid, etc. Survey information helps the managers to avoid discrimination and build a legitimate pay structure. Salary surveys indicate the critical factors associated with a job in determining the pay. Salary surveys helps an organization develop compensation policies to avoid discrimination. A salary survey is a great source of information in effectively administering compensation and meeting compliance requirements. 5. Salary ranges allows the managers to balance external market pressures regarding compensation, and managing the differences in employees with respect to performance, experience, skills, etc. The pay grades and ranges allow the employers to increase the salary as the employee progresses in the organization and to encourage them to stay with the organization. Pay bands helps the compensation managers to distribute responsibility, redesign organizational structures in limited ways, foster cross functional orientation and address external competitive demands. Based on the pay bands the managers can downsize an organization by increasing the responsibilities of the employees.
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