© Prentice-Hall, Inc., 2001 Chapter Seven Building Internally Consistent Compensation Systems

© Prentice-Hall, Inc., 2001

Chapter Seven

Building Internally Consistent Compensation Systems


Figure 7-1

Internally Consistent Compensation Structure (1 of 3)

Av

era

ge

An

nu

al S

ala

ry

$60,000

$50,000

$40,000

$30,000

$20,000

Degree of Responsibility

Benefits Counselor I($20,000)

Benefits Counselor II($26,000)

Benefits Counselor III($40,000)

Manager of Benefits ($58,000)


Figure 7-1


Benefits Counselor I» Provides basic counseling services to employees and

assistance to higher-level personnel in more-complex benefits activities. Works under general supervision of higher-level counselors or other personnel.

Benefits Counselor II» Provides skilled counseling services to employees

concerning specialized benefits programs or complex areas of other programs. Also completes special projects or carries out assigned phases of the benefits counseling service operations. Works under general supervision from Benefits Counselor IIIs or other personnel.


Figure 7-1


Benefits Counselor III» Coordinates the daily activities of an employee benefits

counseling service and supervises its staff. Works under direction from higher-level personnel.

Manager of Benefits» Responsible for managing the entire benefits function from

evaluating benefits programs to ensuring that Benefits Counselors are adequately trained. Reports to the Director of Compensation and Benefits.


Table 7-1

Units of Analysis in the Job Analysis Process (1 of 3)

1. An element is the smallest step into which it is practical to subdivide any work activity without analyzing separate motions, movements, and mental processes involved. Inserting a diskette into floppy disk drive is an example of a job element.

2. A task is one or more elements and is one of the distinct activities that constitute logical and necessary steps in the performance of work by the worker. A task is created whenever human effort, physical or mental, is exerted to accomplish a specific purpose. Keyboarding text into memo format represents a job task.


Table 7-1


3. A position is a collection of tasks constituting the total work assignment of a single worker. There are as many positions as there are workers. John Smith’s position in the company is clerk typist. His tasks, which include keyboarding text into memo format, running a spell check on the text, and printing the text on company letterhead, combine to represent John Smith’s position.

4. A job is a group of positions within a company that are identical with respect to their major or significant tasks and sufficiently alike to justify their being covered by a single analysis. There may be one or many persons employed in the same job. For example, Bob Arnold, John Smith, and Jason Colbert are clerk typists. With minor variations, they essentially perform the same tasks.


Table 7-1


5. A job family is a group of two or more jobs that call for either similar worker characteristics or similar work tasks. File clerk, clerk typist, and administrative clerk represent a clerical job family because each job mainly requires employees to perform clerical tasks.

6. An occupation is a group of jobs, found at more than one establishment, in which a common set of tasks are performed or are related in terms of similar objectives, methodologies, materials, products, worker actions, or worker characteristics. File clerk, clerk typist, administrative clerk, staff secretary, and administrative secretary represent an office support occupation. Compensation analyst, training and development specialist, recruiter, and benefits counselor represent jobs from the human resources management occupation.

Source: US Dept. of Labor, The revised handbook for analyzing jobs (Washington, DC: US Government Printing Office, 1991).


Table 7-4

FLSA Exemption Criteria for Executive, Administrative, and Professional Employees

(1 of 2)

Executive Employees» Primary duties include managing the organization» Regularly supervise the work of two or more full-time

employees» Authority to hire, promote, and discharge employees» Regularly use discretion as part of typical work duties» Devote at least 80 percent of work time to fulfilling the

previous activities


Table 7-4

FLSA Exemption Criteria for Executive, Administrative, and Professional Employees

(2 of 2)

Administrative Employees

» Perform nonmanual work directly related to management operations

» Regularly use discretion beyond clerical duties

» Perform specialized or technical work, or perform special assignments with only general supervision

» Devote at least 80 percent of work time to fulfilling the previous activities

Professional Employees

» Primary work requires advanced knowledge in a field of science or learning, including work that requires regular use of discretion and independent judgment, or

» Primary work requires inventiveness, imagination, or talent in a recognized field or artistic endeavor

Source: 29 Code of Federal Regulations, Sec. 541.3 29; Sec. 541.1.


Table 7-5

EEOC Interpretive Guidelines for Essential Job Functions under the American’s with

Disabilities Act

The reason the position exists is to perform the function. The function is essential or possibly essential. If other

employees are available to perform the function, the function probably is not essential.

A high degree of expertise or skill is required to perform the function.

The function is probably essential; and, Whether a particular job function is essential is a determination

that must be made on a case-by-case basis and should be addressed during job analysis. Any job functions that are not essential are determined to be marginal. Marginal job functions could be traded to another position or not done at all.

Source: From the text of the Americans with Disabilities Act, Federal Register 35734 (July 26, 1991).


Table 7-10

Characteristics of Benchmark Jobs

The contents are well known, relatively stable over time, and agreed upon by the employees involved.

The jobs are common across a number of different employers.

The jobs represent the entire range of jobs that are being evaluated within a company.

The jobs are generally accepted in the labor market for the purposes of setting pay levels.

Source: G.T. Milkovich and J.M. Newman, Compensation 5th ed. (Homewood, IL: Richard D. Irwin, 1996).


Table 7-13

Federal Government Factor Evaluation System (1 of 2)

1. Knowledge required by the position» a. Nature or kind of knowledge and skills needed» b. How the skills and knowledge are used in doing the work

2. Supervisory controls» a. How the work is assigned» b. The employee’s responsibility for carrying out the work» c. How the work is reviewed

3. Guidelines» a. The nature of guidelines for performing the work» b. The judgment needed to apply the guidelines or develop

new guides


Table 7-13

Federal Government Factor Evaluation System (2 of 2)

4. Complexity

» a. The nature of the assignment

» b. The difficulty in identifying what needs to be done

» c. The difficulty and originality involved in performing the work 5. Scope and effect

» a. The purpose of the work

» b. The impact of the work product or service 6. Personal contacts 7. Purpose of contacts 8. Physical demands 9. Work environment

Source: US Civil Service Commission, Instructions for the factor evaluation system ( Washington, D.C.: US Government Printing Office, 1977).

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© Prentice-Hall, Inc., 2001 Chapter Seven Building Internally Consistent Compensation Systems