,,*,Color Overhead Title,Body Text,Second Level,Third Level,Fourth Level,Fifth Level,CompensationManagement:,ToolsandTechniques,LeeKok WaiLectures4 and5,,,,Day-to-Day Operational Focus,Future/Strategic Focus,People,Processes,Strategic HR Planning,HR as Business Partner,Culture and Image,Strategic,Partner,Staffing,Organizational,Design,Succession,Planning,Performance Measurement,Training & Development,Employee Relations,Labor Relations,Environment, Health, Safety & Security,VOW Survey Action Plan,Compensation,Benefits,HR Information Systems,Compliance,AdministrativeExpert,EmployeeRelationsExpert,ChangeAgent,HR’s 4Roles&KeyAccountabilities,,,ManagingHumanResourcesinCOMPAQ,CompensationMgt.,T-Compphilosophy& design,T-Compplanning&admin.,Incentiveplans(MIPs/LTB),Profit-sharingscheme,Reward&recognitionprog.,Expatriate mgt.,ManpowerMgt.,Headcountmanagement,Recruitmentstrategies,Sources of labor supply,Selectionprocess& tools,Retentionstrategies& plans,Staffdeployment,Stafforientation,EmployeeRelationsMgt.,Benefitsadministration,Code of conduct&ethics,Employeediscipline,Employeecommunications,Staffsocial, sports& recreation,Communityservices&relations,EHS&SMgt.,Environmentmgt.,Employeewellness,Employeehealthservices,Loss prevention,Assetmanagement,Safetymgt.,Culture/ValuesMgt.,Corporatevision,Corporatemission,Culture building,Teambuilding,Habitsbuilding,PerformanceMgt. (HRD),Stafftraining& development,Succession planning,Careerplanning,Coaching& counseling,Appraisalreview/ranking,Organizationdevelopment,Leadership development,HumanResourceAdmin.,Records &informationmgt.,Personnelresearch,HRpolicyreview,HRprocess improvements,HRperformancestds &audit,Legalcompliance,Documentcontrol,,,StrategicComponentsofHumanResources,COMPENSATIONMANAGEMENT,Webelieve in payingcompetitivewagesthat commensuratewith jobsize andindividual performance,,WELFARE MANAGEMENT,Webelieve in being afirm,fairandcaring employer.Westrivetomakeemployeesvaluetheirjobsandwanttoremaininthe organizationbasedontheirabilitiestocontributeandgrow.,PERFORMANCEMANAGEMENT,Webelieve in equippingemployeeswiththenecessary skillstodoa goodjob,providingthemwith thetools,the environment,thesupportandthe information neededtoexcelintheirjobs.,CAREERMANAGEMENT,Webelieve in matching employees’strengths andaptitudestoavailable jobs, developingthemtotheirhighest potentialandofferingthemopportunities to advanceintheircareers.,CULTURE/VALUE MANAGEMENT,Webelieve in instillingour corporatecore valuesandpromoting acorporate culturethatemphasizes results, teamwork,learning,sharing,servicequality andwork excellence.,,,Internal,equity,External,equity,Employee,equity,Administration,Concepts,CompensationTechniques,Planning,Budgeting,Monitoring,Evaluating,Job,Analysis,Job,Description,Job,Evaluation,Job,Grades,Market,Definitions,Salary,Surveys,Policy,Lines,Pay,Structures,Seniority,Increases,Performance,Evaluation,Increase,Guidelines,CompensationObjectives,Role clarityand accountability.,,Facilitatesadministrationand,performancemanagement.,,Competitivewage policies and,practices.,,Influenceemployees’work,attitudesand behaviour.,,Attract talents.,Retaintalents.,Motivateemployees.,,Complywithregulations.,Consistencyinpolicy,administration.,TheStrategic CompensationModel,,,What is JobEvaluation?,Jobevaluationisa decision processofcomparing onejobwithanother jobwith theaimofestablishing therelativeimportance of jobswithin theorganization.,,Job evaluationwillprovide aninternally logicalranking ofalljobswhichwillformthebasisof the company,’,’s salarystructure,,,,,,PrinciplesForJob Evaluation,Evaluatingthejob,not the job-holder,Evaluatingthepresent job, not thefuture job,Job is being carriedoutin afullyacceptable and competent manner,Process ofevaluation isbasedon givenfactsinthe job descriptions.,Evaluate the job based onthe,“,“primary responsibilities,”,” andignore the “specialpersonal-to-holderresponsibilities.”,,,,,,Job Evaluation: 3 Main Methods,Qualitative Method (an exampleis the Job Classification Method and the JobComparison Method),Quantifying theQualitative Method(an example isthe PointMethod),Quantitative Method(an example isthe GuideChartProfile Method),,,,,,,Job Classification Methodadopted by AcademicInstitutions such as Universities,Job ClassA : Doctorate Degreewithat least10 years post doctoral experience plus relevant management experience(Faculty Head),Job ClassB : Doctoral Degreewithat least 5to 10 years post doctoral experience (Full Professor),Job ClassC : Doctoral Degreewithlessthan5 years post doctoral experience orMasters Degreewithover10 yearspostgraduate experience(AssociateProfessorandSenior Lecturer),Job ClassD : Masters Degree with 5to 10 years post graduate experience (Lecturer),Job ClassE : Masters Degree with 3to 5years experience (Assistant Lecturer),Job ClassF : Masters Degree with less than 3years experience (Teaching orResearchAssistant),,,,,,,Job Evaluation:ThePointMethod,Job EvaluationProcess,1. Form aJob EvaluationSteering Committee,2. Draw upa workplan fortheexercise,3. Decideon the benchmark jobs,4. Decideon the jobfactors for the evaluation,5. Determine numberof degreesforeachfactor,6. Preparejobdescriptions based on job-factor format,7. Analyseeachbenchmarkjobin terms of factorsand degrees,8. Decideon the weightsof each factor,9. Determine the weightedscore foreachbenchmarkjob,10. Slot in allother jobs into thejobgrades,,,The PointMethod,Formthe Job Evaluation (JE) Steering Committee,a. The SteeringCommitteeshould bechaired by theCEOwithfunctionalManagers/Heads asmembers. The HRManager shouldbe the Secretary oftheJE Steering Committee.,b. Ifan external consultant is employedto assistin the exercise, then heshould bedesignated asthe advisor tothe Steering Committee. The HRManager shouldthendouble-upas the counterpartfor internal skillstransfer.,,,Job FactorScore Sheet :Job #12,Factor,A,B,C,D,E,Education,20,40,60,80,100,Experience,30,60,90,120,150,Interpersonal Skills,10,20,30,40,50,Problems Encountered,30,60,90,120,150,Size of unit supervised,10,20,30,40,50,Decision Making,30,60,90,120,150,Work Environment,10,20,30,40,50,Impact of errors,30,60,90,120,150,Contacts/Committees,10,20,30,40,50,Assets Controlled ($),20,40,60,80,100,TotalScore = 440 points,,,The PointMethod,Slotall otherjobsintothe job grades,a. From the clusters, decide on thenumber ofjobgrades toadopt.,b. Slot inallotherjobsintothejob gradesadopted.,,,The Guide-ChartProfile :HayMethod,Thismethod, first developed by DrEdward N.Hay in theearly 1950s, is essentially concerned with decision makingand responsibility.Guide Charts were created in1951in clientsituations.,Emphasis was placedon answerability fortheconsequences ofdecisions, thedegree offreedom to take decisions andbring them tofruition,the degreeto whichthereis primeaccountability,as compared toshared orcontributory accountability in a job.,,,,,,The Guide-ChartProfile :4 Critical Observations,The most significantfactor could be groupedas representingtheknowledgerequired to doa job, thekindof thinking neededto solve the problems commonlyfaced, and theresponsibilities assigned.,Jobs could be rankednotonlyintheorderofimportancewithinthe organization,but thedistancesbetweentherankscouldbedetermined.,Thefactorsappearedincertain kinds of patterns thatseemed to be inherent to certainkindsofjobs,Thefocusofthe processofjob evaluationmustbeonthenature andrequirementsofthe jobitself, notontheskills or backgroundorcharacteristics or payofthejob holder.,,,TheGuide-ChartProfile: HayMethod,ThereareThreeFactorswith atotalofeightelementswhichdetermine thevalueofdifferentjobs.Theyare:,1.Know-How,2.Problem-Solving,3.Accountability,,,,,,TheGuide-ChartProfileMethod:Know-How,What is Know-How,Know-Howisthetotalofeverykindofskillrequiredforaverageacceptable jobperformance.Itisknowledge andexperience in professional,managerialandhumanRelations activitiesnecessary to fulfillthe job.,Know-Howismeasuredindepthbyeightdegrees andinbreadth by fivedegrees,,,,TheGuide-ChartProfileMethod:Know-How,ThethreedimensionsofKnow-Howare:,Practicalprocedures,specializedtechniquesandknowledge withinoccupationalfields,commercial functions,and professionalorscientific disciplines.This is commonly referred to as the,DepthofKnow-How.,Integratingandharmonizingsimultaneous achievementsofdiversifiedfunctionswithin managerialsituationsoccurringinoperating,technical, supportoradministrativefields.Thisisreferredtoasthe,Breadth of Know-How,Active, practicingperson-to-personskillsinworkwith other people.Thisisreferredtoasthe,HumanRelationsSkill.,,,,DepthOfKnow-How,A.Educationtopost,–,–primarylevel,B.Practicedinstandardworkroutinesand/or useofsimpleequipment andmachines,C.Procedural or systematicefficiencyanduse of specialized equipment,D.Specializedskillgainedbyon-the-jobexperience or throughpartprofessionalqualification,E.Understanding of theoretical principlesnormallygained throughprofessional qualificationorthrougha detailed group of involved practicesandprocedures,F.Seasonedproficiencyina highlyspecializedfield,gained throughexperiencebuiltontheoriesora broad anddeep understandingofcomplexpractices,G.Mastery of principles, practicesandtheoriesgained throughwideexperience and/orspecial development,H.Uniquecommandofprinciples,theoriesandpractices,,,TheGuide-ChartProfileMethod:Know-How,,,Breadth Of Know-How,I.Nonorminimal –Performanceorsupervisionofjobswhichhave closelyspecified objectives,II.Homogeneous –Integrationofoperationswhicharehomogeneousinnature andobjective, andcoordinationwithassociated functions,III. Heterogeneous,–,–Integrationorcoordinationofdiversefunctionsorsub-functionsina company; or inter-companycoordination of atacticalfunction,IV.Broad,–,–Integrationofthemajorfunctions in an operatingcompany;orgroup-wide coordinationofa strategicfunctionaffectingpolicy formation,V.Total,–,–Themanagementofstrategicfunctions andpolicyformation,,TheGuide-ChartProfileMethod:Know-How,,,HumanRelationsSkills,1.Basic,–,– Ordinary courtesy andeffectiveness in dealingwithothers,2.Important,–,–Understanding andinfluencingpeople, importantbutnot over-riding considerations,3.Over-riding,–,– Skillsindeveloping andmotivating peopleareover-ridingconsiderations,,,TheGuide-ChartProfileMethod:Know-How,,,TheGuide-ChartProfileMethod:Know-How,,,Guide-ChartProfile Method: ProblemSolving,What is ProblemSolving,Theuse of Know-How required by thejobtoidentify, define,and resolveproblems.,“,“You think withwhatyouknow.,”,”This is eventrueforthe mostcreativework.Therawmaterialofany thinking is knowledgeoffacts,principlesandmeans.Forthatreason, ProblemSolvingismeasuredasa percentageofKnow-How.,Problem Solvinghas twodimensions:,Theenvironmentinwhichthe thinking takes place,Thechallenge presentedbythethinkingtobedone,,,,TheGuide-ChartProfileMethod,–,–Problem-Solving,ThinkingEnvironment,A.Detailedrulesand/orrigidsupervision,B.Standardinstructionsand/or continuousclosesupervision,C.Well-definedprocedures,somewhatdiversifiedand/or supervised,D.Substantially diversified established companyprocedures,and generalsupervision,E.Clearly definedcompanypolicies,principlesandspecificobjectivesunderreadily availabledirection,F.Broadpoliciesandobjectives,undergeneraldirection,G.General policies,principles andgoalsunderguidance,H.Businessphilosophy and/orprinciples controlling human affairs,,,,TheGuide-ChartProfileMethod,–,–Problem-Solving,ThinkingChallenge,I.Repetitive –Identical situationsrequiring solution by simplechoiceofthings learned,II.Patterned,–,–Similar situationsrequiring solution by discriminating choiceofthingslearned,III.Variable,–,– Differingsituations requiringsearching, findingand selectingsolutionswithin thearea of thingslearned,IV.Adaptive –Situationsrequiringanalyticalinterpretiveand/or constructivethinking.Judgmentisrequired,V.Creative –Novelornon-recurringpath-findingsituationsrequiringthe development of newconceptsandimaginativeapproaches,,,Guide-ChartProfile Method: Accountability,What is Accountability?,Theanswerabilityforaction andforthe consequencesthereof.Itisthe measured effectofthejob on endresults of theorganization.Ithasthreedimensions:,Freedom to Act- is theextentofpersonal, procedural, or systematicguidanceorcontrolofactions in relation to theprimary emphasis of thejob,JobImpactonEndResults,–,–istheextenttowhichjobcandirectlyaffectsactionsnecessarytoproduceresultswithinitsprimaryemphasis.,Magnitude,–,–istheportionofthetotalorganizationencompassedbytheprimaryemphasisofthejob.Thisisusuallybutnotnecessarily,reflectedbytheannualrevenueorexpensedollarsassociatedwiththeareainwhichthejobhasitsprimaryemphasis.,,,,TheGuide-ChartProfileMethod-Accountability,FreedomToAct,A.Prescribed,–,–Directanddetailedinstructions,andclosesupervision,B.Controlled,–,–Establishedworkroutinesandclosesupervision,C.Standardised,–,–Standardisedpracticesandprocedures,generalworkinstructionsandsupervisionofprogressandresults,D.Generallyregulated,–,–Practicesandprocedureswhichhaveclearprecedents,E.Directed,–,–Broadpracticeandprocedurescoveredbyfunctionalprecedentsandpoliciesandmanagerialdirection,F.OrientedDirection,–,–Functionalpoliciesandgoals,andgeneralmanagerialdirection,G.SeniorGuidance,–,–Inherentlyandprimarilytodirecttopmanagementguidance,H.OwnershipGuidance,–,–Onlytoownershipreviewandpublicrecreation,,,Impact,I.VerySmall(underUS$1M),II.Small(BetweenUS$1MtoUS$10M),III.Medium(BetweenUS$10MtoUS$100M),IV.Large(MorethanUS$100M),TheGuide-ChartProfileMethod-Accountability,,,Environment,1.Remote,–,–Givinginformationonotherincidentalservicesforusebyothersinvolvedintheaction,2.Contributory,–,–Interpreter,advisoryorfacilitatingservicestothoseinvolvedintheaction,3.Shared,–,–Participatingwithothers(exceptsuperiorsandsubordinates)intakingaction,4.Prime,–,–Whollyresponsible,withlittleornosharedresponsibility,TheGuide-ChartProfileMethod-Accountability,,,SalarySurveybasedonHayMethod,Hay Point Range,Median Salary Formula,,200 - 300,129.46 * HP - 1386,,301 - 400,155.27 * HP - 9127,,401 - 500,167.24 * HP - 13,916,,501 - 600,159.47 * HP - 10,033,,601 - 700,172.55 * HP - 17,881,,701 - 800,150.75 * HP - 2621,,,,SalarySurveybasedonHayMethod,Hay Point Range,Upper Quartile (Q3) Salary Formula,,200 - 300,144.89 * HP - 1648,,301 - 400,165.55 * HP - 7845,,401 - 500,195.67 * HP - 19,893,,501 - 600,176.16 * HP - 10,140,,601 - 700,194.51 * HP - 21,145,,701 - 800,168.63 * HP - 3029,,,,Internal,equity,External,equity,Employee,equity,Administration,Concepts,CompensationTechniques,Planning, Budgeting,Monitoring,Evaluating,Job,Analysis,Job,Description,Job,Evaluation,Job,Grades,Market,Definitions,Salary,Surveys,Policy,Lines,Pay,Structures,Seniority,Increases,Performance,Evaluation,Increase,Guidelines,CompensationObjectives,Roleclarityandaccountability.,,Facilitatesadministration and,performancemanagement.,,Competitivewagepolicies and,practices.,,Influence employees’work,attitudes and behaviour.,,Attracttalents.,Retain talents.,Motivateemployees.,,Comply withregulations.,Consistencyin policy,administration.,TheStrategic Compensation Model,,,CompensationManagement,Thefundamentalsofsalary administration,,Salary administration isconcerned withdecidinghowandwhat staffshould be paid and withthetechniques and procedures for designingandmaintainingsalary structures, rewardingstaff and exercising salarycontrol.,,,AimsOfSalary Administration,Thebasic aims of salaryadministrationare,to attract,retain and motivate,staff bydevelopingandmaintaininga competitive and equitablesalary structure.,To ensure that asufficientnumber of suitable staffisattracted tojoin the organization;,To encouragesuitable staffto remain with the organization;,To develop and maintaina logical salarystructure whichachieves equityinthepayforjobsofsimilarresponsibility and consistency in the differentialsbetweenjobsinaccordance withtheir relative values;,To ensure that salary levelsmatch market rates;,To keepthesalary levels adjusted in line withincreases inthecost ofliving;,,,AimsOfSalary Administration,To maintainconsistencyin methods usedto fix and review salarylevelsanddifferentials;,To provide for progression within the salarystructure in accordancewith performance and levelof responsibility;,To operate the salary systemfairlyandconvincethestaff thatthesystem is fair;,To maintaina flexible salary systemwhich willaccommodatechangesin the market ratesfordifferent skillsandinthecompany’s organization structure;,To achieve simplicity inoperationsas an aid tostaff understandingandtominimizeadministrativeeffort;,To operate effectivesystemsofcontrollingsalary costsandtheadministrativeprocedures requiredto achieve the aboveaims attheleast costto the organization.,,,Components Of SalaryAdministration,Thestartingpoint of salaryadministrationis the determinationofsalary levels byjobevaluation.Thereafter,salaryadministration is concernedwith:,Thedesign and maintenance of salarystructures;,Theoperation ofsalaryprogressionsystems;,Theadministration and control of salaryreviews;,Thedesign and operationofbonus schemes;,Theprovision ofemployee benefits and otherallowances;,Thedevelopmentof atotal remunerationpolicy.,,,,CompensationTools and Techniques,PayStructure,Salary Structure,PerformanceRelatedPay,Merit Payment Scheme,Incentive Scheme,BenefitPolicies,Salary Review Guidelines,Compa-ratio,Salary Problems,,,,,CriteriaforPayStructures,Be appropriate to the needsof the organization,interms ofits:,- culture, sizeandthedegree in whichchangestakeplace,- need for flexibility,- type and levelofemployees tobecovered,Be flexiblein responseto internalandexternalpressures,especially thoserelatedtomarket ratesandskill shortages.,Providescope for rewardinghigh-flyerswhile stillproviding appropriate rewards for the majority of employees.,Ensure thatrewardsaregiven inline with performancesandachievements.,Providea basisforcareer planningwhich will motivateambitious employeeswithhigh potential.,Facilitate consistency in the treatmentof varying levels ofresponsibilityandperformance.,,,,Graded Salary Structures,Alljobsareallocated intosalary gradewithinthestructure onthebasis of anassessmentof theirinternal and external valuetotheorganization.,,Eachsalarygrade consists of asalary rangeorband.,,Thejobsallocated to asalary gradeareassumedtobe broadly of the same level,–,– normallythesameminimumandmaximumrates,which correspondwith gradeboundaries.,,,Graded Salary Structures,A typicalgraded structureconsistsofa sequence of salarygradesorranges,each of which has,a definedminimum andmaximum,. It is assumedthatallthe jobsallocated intoagradearebroadlyofthesamevalue,althoughactual salaries earnedbyindividualswill dependontheirperformanceorlengthofservice.,Acrossthe board costofliving or marketrate increaseswill usuallyresult in an increase to theminimaand maximaofeach grade.Allthe jobsinanorganization maybecovered by thesame structureofsalaryranges or there maybedifferentstructuresfordifferent levelsorcategories of jobs.,,,Make-up of aSalary Grade,A basic principleofa salarystructureisthatindividualsadvance throughthe structureeitherbyprogressingwithin thesalarygradefor thejobastheyimprove their performance,orbypromotion.,Inthesimpleststructure,peoplemovemore or lesssteadilyfromtheentrypointofthe grade (with might be above theminimum if theyhavealready gainedrelevantexperience elsewhereorwithinthe firm) to theupperlimit,unless theymovetoa highergrade.Itispossible, however, to distinguish three stagesinto which thisprogressionisdivided,and forsalaryadministrationpurposesitishelpfultodividethe grade intothreezoneswhichcorrespondtothesestages.,,,,SalaryStructure :RatioMethod,,,SalaryStructure :RatioMethod,,,SalaryStructure :DispersionMethod,,,SalaryStructure :DispersionMethod,,,Thelearningzonecoversthe periodwhen aperson is on his,‘,‘learningcurve,’,’,familiarizing himselfwiththeknowledge andskillsrequiredifheistobecome fully competent.The lengthoftime to go throughthiszone willvaryaccordingtothe individual,’,’sexperience,competence andability to learn.Itwouldbeacceptedthat someonemightenterthe range at anypointinthis zone, frombottom to t