Market Pricing- M2 Part 1

Question 1

Market Pricing

Answer 1

The process of analyzing external pay data to determine the prevailing rates of
jobs in the market

Question 2

Market Rate

Answer 2

the prevailing pay rate for a job

• Hourly rate or salary

Question 3

Market rate composite

Answer 3

Market rate composite results from combining market rates for the
same job from multiple survey sources.

Question 4

Slotting

Answer 4

the act of placing a job into a job worth hierarchy established by a method other than
the organization’s primary job evaluation method

Question 5

Whole job comparison

Answer 5

job evaluation process in which jobs are compared in their entirety
against one another, as opposed to breaking jobs down into their respective components and
evaluating each component or factor

Question 6

Pay Structure

Answer 6

A grouping of job grades and pay ranges established for jobs within an
organization. Some organizations may have only one pay structure while others may have many.
Separate pay structures are often created for different groups or families of jobs or for different
geographic regions.

Question 7

Pay grade –

Answer 7

a numeric, alphanumeric or other label identifying the different levels within
the pay structure (band)

Question 8

Pay range

Answer 8

the range of pay rates, from minimum to maximum, established for a pay grade

Question 9

Midpoint differential

Answer 9

the difference between the midpoints of two adjacent grades

Question 10

Market based Job Eval and Pay Structure Design Advantages

Answer 10

Simple to administer
easy to explain
not overly time consuming compared to other methods
responsive to the market
High degree of transperancy

Question 11

Market Based Pay Structure

Answer 11

Structure is developed by the steps addressed in module-
Analyze and document job content
identify and select benchmark jobs
identifty and select relevant labor markets
identify salary survey sources
collect and analyze data for bench mark jobs
develop mid points for each grad in pay structure
assign bench mark jobs to structure
slot non benchmark jobs into struction

Question 12

Job Evaluation- 2 types

Answer 12

Job Content- (internal- looks at the jobs you have and their value scope etc

Market based approach (external) jobs are priced using parket data to determine realitve value, jobs without data are slotted into the hierarch using job content comparasions

Question 13

Why is Job evaluation important

Answer 13

Establishes the value of jobs realitive to other jobs

used to develop a job worth heirarchy

Question 14

Job worth Heirarchy

Answer 14

skeleton of jobs as there arrayed in the org

Question 15

Pay structure

Answer 15

a grouping of jobs that are in terms of contribution to the org, like positioned

Question 16

what determines the number of pay grades

Answer 16

size of org
Complexity of org
skil/responsibility
administrative considerations
Career progression
levels of leadership