Strategic Pay Structure

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School

Capella University *

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Course

5055

Subject

Management

Date

Jan 9, 2024

Type

docx

Pages

7

Uploaded by papinprincess

1 Pay Structure Strategic Pay Structure HRM-FPX 5055 Comprehensive Rewards Gabrielle Hawkins-Dimming 1/19/2024
2 Pay Structure Hypothetical Using data from Capra Tek's Key Issues and Initial Analysis, Job Structure and Compensation, and Strategic Pay Structure, this paper discusses the application of Martocchio's five-step system process to create a strategic pay structure for the company. It also includes the number of pay structures, market pay lines, defined pay grades, pay ranges, and commensurate job classification. It also examines the applicability of Capra Tek's merit- pay systems, sales-incentive compensation plans, and person-focused programs. Vital Pay System Using data from Capra Tek's Key Issues and Initial Analysis, Job Structure and Compensation, and Strategic Pay Structure, this paper discusses the application of Martocchio's five-step system process to create a strategic pay structure for the company. It also includes the number of pay structures, market pay lines, defined pay grades, pay ranges, and commensurate job classification. It also examines the applicability of Capra Tek's merit- pay systems, sales-incentive compensation plans, and person-focused programs. Most businesses, like Capra Tek, take into account the process of building pay structures, which comprises the following steps: figuring out how many pay structures to have, figuring out a market pay line, defining pay grades, figuring out pay ranges for each pay grade; and assessing the outcome. Five-Step System
3 Pay Structure Pay structures use job analysis, job evaluation, pay survey analysis, pay policy development, and pay structure formation to determine multiple pay levels for individual jobs or groups of jobs based on their internal value and external relativities (Designing A Pay Structure, 2017). Employers use this system to identify pay disparities based on employee performance, knowledge, or credentials (Martocchio, 2020). Capra Tek will implement a two-tiered pay structure, creating a lower pay scale for recently hired employees than for senior employees. Positions within each job structure will gauge jobs that are common and uniform across a broad range of employers, including, but not limited to, other Capra Tek locations, to assist in determining a market pay line that will be used to represent the typical market pay rates that are relative to the company's job structure. Capra Tek uses a two-tiered prospective pay structure that allows the consolidation of a pay system for newly hired workers that is on a lower one for senior employees. Each internal promotion to the next level will increase pay due to the difficulty and demands of duties and worker requirements. For instance, pay rates for the Research & Development (R & D) job structure will be based on applicable labor markets that will help to promote internal stability. According to Compensation and Benefits (2017), Pay policies will assign pay grades to jobs based on value, experience, education, career advancement, and interchangeable compensable factors. The number of grades will be sufficient to indicate the degree of difficulty for each job, but not so many that the differences between two adjacent grades are negligible (Compensation and Benefits, 2017). For every job grade, pay ranges define the upper and lower bounds of compensation for workers whose jobs fall into that grade. Market data will determine the pay range's maximum, lowest, and midpoint. The pay structure results will be analyzed by comparing the market's valuation
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