3P salary

TITLE

Mercer

Source: Mercer IPE Methodology

Employee compensation

Employee compensation includes all forms of pay going to employees and arising from their employment. It has two main components, direct financial payments (wages, salaries, incentives, commissions, and bonuses) and indirect financial payments (financial benefits like employer-paid insurance and vacations)

Gary, D. (2013). Human resource management (13th edition). Pearson.

In Mercer's 3P system, personal capacity refers to the skills, competencies, and knowledge that employees possess to perform their jobs effectively. By considering personal capacity along with job position and work efficiency, the payment system aims to create fairness and motivation for employees to enhance their capabilities and work efficiency, thereby contributing to the overall growth of the business.

TITLE

REVIEW

The "ASK" model is more likely to be used in the "Pay for Person" component (P2) of 3P. The ASK model (Attitude, Skills, Knowledge) is used to assess an employee's:

Professional competence, including knowledge about professional expertise corresponding to specific job titles.

Core competency, which refers to the ability to perform the job in the best way that employees in each position can achieve.

Competency by role, which represents the minimum level that an employee must be able to do when taking on a certain job position.

TITLE

The "SMART" model is more likely to be used in the "Pay for Performance" component (P3) of 3P. The SMART model (Specific, Measurable, Achievable, Relevant, Time-bound) is used to:

Set clear and specific performance goals and objectives aligned with the organization's strategic priorities.

Use qualitative and quantitative metrics to evaluate employee performance in a measurable and achievable manner.

Conduct regular performance reviews and feedback sessions to provide constructive guidance and recognition based on specific, relevant, and time-bound performance goals.

TOPIC

In the "Pay for Position" component (P1) of 3P, the main basis for establishing relevant benefits associated with the job grade is Job Evaluation. Job evaluation methods include:

Point-factor analysis

Job grading

These methods assess the relative value of different positions within the organization, which then determines their compensation levels.

TITLE

In the "Pay for Person" component (P2) of 3P, the element that considers years of work experience, specific technical requirements, or special permits is Experience Levels. This component involves:

Assessing the depth of skills, competencies, and knowledge a person possesses

Considering individual qualifications, certifications, and specialized skills when assessing an employee's worth.

TOPIC

In the "Pay for Performance" component (P3) of 3P, the primary purpose of short-term and long-term bonus programs is Recognizing individual contributions to company goals. This component involves:

Implementing financial reward systems tied to an employee's performance relative to stated criteria or the value they bring to the company.

Using both qualitative and quantitative metrics to evaluate an employee's performance, such as sales figures, customer satisfaction ratings, and project completions.

DEFINITION

Mercer in 2005

3P COMPENSATION

Establish a payment system based on the assessment of job position, personal capacity to perform the employee's job as well as the employee's work efficiency to create fairness, encourage and motivate employees to improve their capacity and work efficiency to contribute to the development of the business.

VMHanh, H. (2023, July 20). [Tải Ebook] Tặng miễn phí Ebook: Xây dựng hệ thống Lương 3P – Theo phương pháp Mercer. MISA AMIS. https://amis.misa.vn/76613/ebook-xay-dung-he-thong-luong-3p-theo-phuong-phap-mercer/

TITLE

TOPIC

QUESTION

How to Develop Measurement for each P?

Quesstion

P1

Measurement

MEASUREMENT

• Conduct a comprehensive job analysis to identify the specific duties, responsibilities, and required competencies for each position.
• Use job evaluation methods like point-factor analysis or job grading to assess the relative value of different positions within the organization.
• Establish a job hierarchy based on job evaluations to determine compensation levels for various positions.

Nguyen Phuong Dung (June, 2023),

What is 3P salary? Benefits and how to develop the 3P salary model. Retrieved July 23, 2023 from: https://viindoo.com/blog/business-management-3/3p-salary-1691)

PAY FOR PERSON

PAY FOR POSITION

PAY FOR PERFORMANCE

BUILD 3P COMPENSATION

• Establish The Norm, Kpis, And Work.

• Assess Work Performance.

• Create Work-Performance-Based Reward Programs

BUILD 3P

• Create The Organization Model, Assign Enterprise Tasks

• Examine Job Descriptions And Analyses

• Assess Job Value

• Work Placement Structure

• Create A Job-Hierarchy-Based Payroll Scale

• Using The ASK Model Build A Scale -> Determine each Position's Capability

• Group Capacity For Each Position And Analyze Capacity Proportions.

• Assess Market Competitiveness

• Set The Payroll Scale Salary Frame.

• Establish Individual Capacity Allowances.

VMHanh, H. (2023, July 20). [Tải Ebook] Tặng miễn phí Ebook: Xây dựng hệ thống Lương 3P – Theo phương pháp Mercer. MISA AMIS. https://amis.misa.vn/76613/ebook-xay-dung-he-thong-luong-3p-theo-phuong-phap-mercer/

THE ASK MODEL - Attitudes, Skill, Knowledge

ASK MODEL

Huế, T. (2023, June 20). Mô hình ASK là gì: Mô hình đánh giá năng lực nhân sự chuẩn quốc tế. Base Resources. https://resources.base.vn/hr/mo-hinh-ask-la-gi-mo-hinh-danh-gia-nang-luc-nhan-su-chuan-quoc-te-350/

- The salary is too low compared to private hospitals (3–6 times higher than national ones).

- The workload is overwhelming; Yet, the salary is not enough to cover

- The salary for doctors after finishing studying for 6 years and 18 months with real experience and practice is 4.881.240 VND (Social insurance and health insurance are not included).

Suckhoedoisong.vn. (2022). 18 tháng có 9.680 nhân viên y tế xin thôi việc, bỏ việc: Bộ Y tế chỉ ra 4 nguyên nhân chính - Tin tổng hợp - Cổng thông tin Bộ Y tế. Ministry of Health Portal. https://moh.gov.vn/tin-tong-hop/-/asset_publisher/k206Q9qkZOqn/content/18-thang-co-9-680-nhan-vien-y-te-xin-thoi-viec-bo-viec-bo-y-te-chi-ra-4-nguyen-nhan-chinh

CLASS DISCUSSTION

CLASS DISCUSSTION

1. National hospitals have salary range based on ranking number, which leads to the fact that people thinking: i do most of the work, you do less, we are paid the same, so why do I have to keep working hard --> this is the issue of unfair compensation.

2. Medical staff are overloaded with work, they have to do night shifts but the current compensation cant motivate them to do well.

VIDEO CLIP

Watch more at:

https://drive.google.com/file/d/1jwsiul64SqGXSt_-vEuR40PsJtiyhDqG/view?usp=sharing

INFLUENCE

INFLUENCES

1. Ashraf, F. (2020). 3P Approach to Compensation Management and its Implications for Employee Performance at Work. Journal of Applied Business & Economics, 22(10), 245–254. https://doi.org/10.33423/jabe.v22i10.3725

2. Mulugeta, F. W. (2018). The Role of Compensation Practices on Employee Satisfaction, In the case of BEKDES Business PLC.

DISADVANTAGES

DISADVANTAGES

• Subjectivity in assessment

• Complicated and time consuming

• Loss of motivation

• Encountered objections

Talentnet (2017), 3P Salary: The Most Standard Way Of Calculating Salary For Employees. Retrieved July 23, 2016 from: https://www.talentnet.vn/featured-insights/3p-salary-most-standard-way-calculating-salary-employees

MANEGERIAL IMPLICATIONS

• Enhances the productivity of an organization
• Carries out the design, implementation, and maintenance of a compensation system -> increase organizational and individual performance.
• Help managers develop a compensation policy -> the greatest value to the employee at the lowest cost to the company.
• Establish internally equitable and externally competitive grading and salary structures, and introduce competency and market-based pay.

Source:Ashraf, Farzana.  The Journal of Applied Business and Economics; Thunder Bay Vol. 22, Iss. 10, (2020): 245-254 (https://www.proquest.com/docview/2496338474?fromopenview=true&pq-origsite=gscholar)

BUSINESS

VMHanh, H. (2023, July 20). [Tải Ebook] Tặng miễn phí Ebook: Xây dựng hệ thống Lương 3P – Theo phương pháp Mercer. MISA AMIS. https://amis.misa.vn/76613/ebook-xay-dung-he-thong-luong-3p-theo-phuong-phap-mercer/