Unit 4.4 - Job Pricing & Pay Rate Administration Flashcards
What is job pricing?
The process of placing a dollar value on the worth of a job
What is a compa-ratio?
Analyzes how people are paid within each pay range; used by employers to ensure that employee compensation is consistent with market and industry standards
(WR ÷ Midpoint) x 100
WR = wage rate
Acceptable range - 80%-120% AKA .8 - 1.2
What are adjustments for inflation?
Administrative problems may arise when the wage structure has to be adjusted due to inflation or internal changes within the organization, such as job redesign.
What determines individual pay rate?
Individual pay rate - the relative pay of individuals who perform similar jobs in the same company
Impacts on individual pay:
- Performance
- Experience
- Seniority
- Potential
- Misc.
What is wage/salary compression and salary inversion?
Wage compression - occurs when the pay of one or more employees is very close to the pay of more-experienced employees in the same job, or even those in higher-level jobs
Salary inversion - may be the consequence of salary compression; where new hires are paid more than experienced employees.
What are the considerations of ex-patriot pay?
Additional considerations and allowances can add up to 2-3x the base salary!
Considerations on expatriate pay:
* Foreign service premium
* Hardship allowance
* Hazard/danger pay
* Relocation/storage allowance
* Cost of living allowance
* Housing differential
* Healthcare coverage
* Education allowance
* Spousal assistance
* Travel allowance
* Inflation adjustments
* Tax allowance & preparation services
* Repatriation allowance
* Assignment completion bonus
What processes are pay decisions controlled by?
Pay decisions are controlled by two basic processes:
- The design of the wage structure
- The formal budgeting process
Pay Administration:
* Budgeting Process
* Zero-based budgets
* Contingent workers
* Variable pay
* Pay secrecy versus open pay policies
