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Compensation Presentation

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Shanna Kim

on 2 May 2016

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Transcript of Compensation Presentation

March 31st
Compensation Class
Xavier University
Job Evaluation:
3 Requirements are fundamental and universally applicable
Point table
4 factors used
Job evaluation is the systematic process for assessing the relative worth of jobs within an organization. A comprehensive analysis of each position's tasks, responsibilities, knowledge, and skill requirements is used to assess the value to the employer of the job’s content and provide an internal ranking of the jobs (hrcouncil.ca).
Different Types of Value:
Relative value:
the relative contributions of jobs to organizational goals to their external market rates, or to some other agreed upon rates.
Market Value:
ranks all job on how the market ranks them
Internal Value:
how the organization views the value the job provides
Job Analysis Continued...
Pay systems are designed to achieve certain objectives
Decrease employee morale
Make your company less marketable
Lack of competition

Job Evaluations & Compensation
Shanna Kim, Shawn Gannon, Sarah Bunker, and Will Bloom
Point Factor System
Where to Begin:
When conducting a job evaluation, you should always start with a job analysis.
Legal Advantages of Job Analysis
While establishing a job evaluation policy and procedure is not a legal requirement, job evaluation is an effective tool organizations use in meeting requirements of pay equity legislation. A comprehensive job evaluation policy and process can serve to both ensure, and demonstrate, objective and fair decision-making regarding compensation structures, staffing and promotion. (direct quotes from hrcouncil.ca)
Aspects of a Job Evaluation
Job Data
-Known information
-Job title
-Major tasks and duties
Employee data
Levels of analysis
Compensation Objectives:
Why is Compensation Important?
In Case You Still Don't Understand Compensation, Think of it in Terms of FOOD
When to Conduct Job Evaluation:
after completing a job analysis but before creating a compensation program.
Every new position
Reclassification or re-evaluation
Major Decisions in a Job Evaluation:
Establish the purpose
Decide on single versus multiple plans
Choose among alternative methods
Obtain involvement of relevant stakeholders
Evaluate usefulness of the results
How The Hay Method Relates to Compensation:
Evaluations result in Full Point values (K-H + PS + ACC + WC). These values, through specific points, pay grades, broad bands, work levels, etc. can be related to different types of pay (internal and/or market comparisons; base salary plans, base + incentive, etc.) Ranges with Midpoints, Maximums and Minimums can be developed that compare points levels and pay levels. Jobholders can be positioned in ranges based on a wide variety of criteria.

Necessary Information:
Assessment of job content

Assessment of relative value

External market link



What is the Result of a Job Evaluation?
The result consists of assigning jobs to salary grades.
The job evaluation methodology used to establish relative worth is a market pricing and slotting approach that focuses on the following components:
External Value:
HRS reviews and analyzes published competitive salary survey information, which has been gathered and prepared by internationally recognized consulting firms. The analysis takes into consideration strength of job match, company size, industry, geography, and ownership.
Internal Value:
HRS reviews and analyzes the job documentation to determine the position scope, complexity, and potential impact to the University as well as specific factors such as skill, effort, responsibility and working conditions required to successfully perform the job.
Pay objectives are different from business units
Compensation Overview:
“All forms of financial returns and intangible services and benefits employees receive as part of an employment relationship”

2 Types:


Negative Effects - poor compensation can:
Positive Effects - good compensation can:
Motivate employees
Attract employees
Improve morale
Improve retention rates
Encourage and foster a culture of employee loyalty

“executive compensation increases reflect a change in the company’s long-term incentive performance award program and changes in pension value stemming from lower discount rates and changes in other assumptions” resulted in UPS’s CEO’s total compensation more than doubling in 2014.
Full transcript