T7: Pay Structures

Question 1

Linkage between internal equity and external equity

Answer 1

IE: Job evaluation exercise
Jobs arranged in hierarchy on ascending or descending order of importance to the org

EE: Salary Surveys
Jobs values are then compared with those of other orgs to obtain ee

Question 2

What is a salary structure?

Answer 2

A salary structure is a method by which an org distributes the salaries to its employees

(consists of salary scales/ranges for grp of jobs and grading of jobs)

Question 3

IMPT-Types of Salary Structure

Answer 3

1. Graded Salary Structure
2. individual Job Ranges
3. Single rate system (or fixed rate sys)

Question 4

IMPT- What is Graded Salary Structure?

Answer 4

Series of salary grades, ea w specified minimum and max salary called salary scale

Question 5

IMPT- Individual Job Ranges is what

Answer 5

Means Loose salary structures w no grades specified, suitable for more senior jobs

Question 6

IMPT- What is Single Rate System

Answer 6

Assigns a specific salary rate for a job with no salary scales (everyone paid the same salary)

Question 7

IMPT-The design of (salary) structure (3)

Answer 7

Pay grades - group similar jobs to simplify pricing jobs

Pay ranges - includes min and max pay and midpoint

The pay policy line

Question 8

IMPT- Calculations of ratios: Range Spread

Answer 8

RS = Max - Min / Min x 100%

Question 9

IMPT- Calculations of ratios: Range Overlap

Answer 9

(Max rate for A - Min Rate for B) / (Max rate for A - Min Rate for A)
x 100%

Question 10

IMPT- Calculations of ratios: Compa Ratio

Answer 10

CR = Avg rate actual paid/range midpoint

Question 11

IMPT-Compa ratios how to read and shit

Answer 11

Compa ratio of 1: indicates avg salary of employees in that grade is = to midpoint

Compa ratio <1 : ^ paid below midpoint

Compa ratio >1: ^ rates exceed intended policy

(rmb sumn reasons)