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30 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Compensation survery |
Systematic process of collecting and making judgements about the compensation paid by other employers |
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Market Pricing |
Establishing pay structure by relying on almost exclusively on external market pay rates |
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Outlier |
A data point that falls outside the majority of data |
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Market payline |
A graph that links a company's bench mark jobs on the horizontal axis (internal structure) with market rates paid by competitors (market survey) on the vertical axis |
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Pay policy line |
The pay line representing an adjustment to the market pay line to reflect the company's external competitive position in the market (ie lead, match, or lag) |
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Broad banding |
Collapsing several pay grades into a large band of jobs |
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Pay grade |
Grouping of jobs considered substantially equal for pay purpose |
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Pay range |
Range between the upper and lower limits on pay for all jobs in a particular pay grade |
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Reference rates |
Pay rates from market data used in pricing broad band updates forecast competitive rates for the date when the pay decision will be implemented. |
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What is the purpose of a survey? |
Adjust pay level Adjust pay mix Adjust pay structure Study special situations |
4 answers |
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Relevant labour markets include employers who |
The same occupation or skills Within the same geographic are The same products and services |
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What is a fuzzy market |
New organization or new position that makes it hard to survey |
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Frequency distribution: unusual shapes may reflect |
Problems with job matches Widely dispersed pay rates Employers with widely divergent pay policies Central tendency Variation |
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What is Mean |
Sum all rates and divide by number of rates |
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What is mode |
Most commonly occurring rate |
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What is median |
Order all data points from highest to lowest the one in the middle is the median |
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Standard deviation |
How tightly all the rates are clustered around the mean |
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Quartiles and percentiles |
Order all data points from lowest to highest, then convert to percentages |
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Purpose of a market pay line |
Helps set pay for non benchmark jobs |
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Two aspects of pay structure |
Pay policy line Pay ranges |
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Two parts of the total pay methid |
Internally aligned structure - horizontal axis External competitive data - vertical axis |
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Why does pay range exist |
When an employee has two or more rates of pay |
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What does range spread equal |
Range maximum - range minimum |
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3 qualities of pay grade |
Each grade has its own pay range All jobs in single grade have same pay range Grades enhance an organization's ability to move people among jobs with no change in pay |
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2 steps of broad banding |
1. Set the number of bands 2. Price the band's (reference market rates) |
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Purpose of broad banding |
Provides more flexibility to manage career growth and administer pay |
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Job structure orders jobs on the basis of |
Internal factors (Job evaluation or skill certification) |
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Pay structure is anchored by the firms |
External competitive position (Reflected in its pay policy line) |
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What does market pricing do |
Emphasizes external competitiveness Deemphasizes internal alignment |
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What are survey results used for |
To construct market pay line |
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