You are the newly hired HR professional for small

You are the newly hired HR professional for small manufacturing organization.  You have been tasked with completing a base pay structure project that your predecessor had already started.  Much of the work has already been completed, including job analysis, job evaluation and a market review, but, a few outstanding pieces still need to be done.  

This learning activity will walk you through the steps necessary to complete the task.  Please note that this is a very high-level activity and many steps have been simplified or provided for the purposes of this activity.

Step 1: Job Worth Hierarchy

Prior to leaving the organization, your predecessor completed job analysis and a point-based job evaluation for the roles within the organization.

Your first step is to review the information below. No other actions required in this step.  

Job

Points

Was Market Data Available?

Warehouse Associate

125

Yes

Widget Builder

175

Yes

Trainer

230

Yes

Supply Chain Coordinator

240

Yes

HR Assistant

245

Yes

Inside Sales Representative

255

Yes

Workplace Safety Representative

270

Yes

Financial Analyst

300

Yes

Widget Manager

380

Yes

General Manager

450

Yes

 

Step 2: Compensation Philosophy – Lead, Lag or Match 

You predecessor obtained 3 different market data values for each of the roles where market data was found along with a note that says that the organization wishes lead the market for some roles, match for others and lag for some.  Your next step is to review the market data. Highlight the correct market positioning for each of the following roles: (5 marks) 

Job

Market Source #1

Market Source #2

Market Source #3

Warehouse Associate – MATCH market

$37,440

$23,660

$27,040

Trainer – LAG market

$31,200

$39,250

$25,570

Inside Sales Representative – LEAD market

$56,320

$41,860

$47,840

Financial Analyst – MATCH market

$76,000

$63,500

$53,250

General Manager – LEAD market

$83,000

$77,650

$100,200

 

Step 3: Determining the Number of Pay Grades

After analyzing your data, you have been able to identify that 5 pay grades are needed for the organization.  You have carefully determined the range of job evaluation points for each grade.  Your next task is to identify which of the following jobs fall into each grade. Fill in the Blank (5 marks)

  • Warehouse Associate
  • Trainer
  • General Manager
  • Financial Analyst
  • Workplace Safety Representative

Pay Band

Minimum Points

Maximum Points

Title of Job(s) in each Pay Band

1

110

199

 

2

200

249

 

3

250

299

 

4

300

399

 

5

400

499

 

 

Step 4: Establishing Pay Ranges

Your next step is to create the pay ranges associated with each grade.  After analyzing the market data and your graph, you have determined the “midpoint” (market value) for each grade.  

You have been instructed to create a range that has a spread of 40%.  Using the chart below, enter the minimum and maximum values for each pay range.  (5 marks) You may select the calculation methodology of your choice – from either the learning video or reading materials.

Please note that midpoints have been pre-determined for the purpose of this step of the assignment.  The establishment of midpoints takes into consideration a number of data points and philosophies around the spread of midpoints from one pay band to the next. The use of midpoints in this example is for illustrative purposes and is not a direct correlation to the market data provided. 

 

Pay Band

Pay Range Minimum

Pay Range Midpoint

Pay Range Maximum

1

 

$36,000

 

2

 

$51,000

 

3

 

$62,000

 

4

 

$75,000

 

5

 

$110,000

 

 

Step 5: Green and Red Circling

Congratulations!  You task is almost complete.  Your final step is to review the individual salaries of the employees to determine if any need to be green or red circled.  Complete the chart below.  Employee salaries have been provided for the purpose of this part of the assignment. (5 marks)

 

Job

Employee Salary

Green or Red Circled? (or neither)

Warehouse Associate

$29,000

 

Trainer

$64,000

 

Workplace Safety Representative

$65,000

 

Financial Analyst

$59,000

 

General Manager

$135,000