Developing a Pay Structure

Developing a Pay Structure

This activity is important because when creating a pay structure at an organization, there are many factors that need

to be taken into account. The structure needs to be considered in light of both external market pressures and

internal concern for equity and fairness.

The goal of this exercise is to demonstrate your understanding of how pay structure should also fit with the

organization's overall business strategy and take into account the various jobs and their importance in day$-$to$-$day

operations.

In this exercise, please read the following mini$-$case and answer the questidns that follow.

Developing a Pay Structure$-$ When creating a pay structure at an organization, there are many factors that need to

be taken into account. The structure needs to be considered in light of both external market pressures and internal

concern for equity and fairness. It should also fit with the organization's overall business strategy and take into

account the various jobs and their importance in day$-$to$-$day operations.

Sally Conroy, HR manager at Valley Ranch Cosmetics, has recently undertaken a comprehensive review of the pay

structure at her organization. She and her staff performed job evaluations on all positions, and graded each position

on its compensable factors. The biggest issue that became clear during the analysis was the fact that the

salespeople are currently paid twice as much as the logistics staff, despite the fact that their job evaluation point

scores were roughly the same. After investigating, Sally found out that salesperson retention had been a large