Reference no: EM132218905

Compensation and Performance
Grade and Salary Structure Project

The purpose of this project is to develop a job evaluation process and a grade and salary structure. This project constitutes 25% of the final grade for the course and will be conducted as part of a small team. The first step it to select one real organization for this project. It may help to select an organization in which you know someone, but this is not necessary. Please obtain my approval for the organization you select.

The final deliverable is a report providing all of the below information. A hard copy of the report should be handed to me at the final exam.

The first page of the report should provide a brief (about half a page) overview of the organization, such as major products or services, main locations, number of employees, etc.. The remainder of the report should address the following items.

1. Develop point-factor job evaluation process

a. Identify 5 - 8 factors that cover the most important aspects of jobs, but are not redundant or overlapping with each other.

b. Define each factor, and define the top and bottom levels of each factor.

c. Determine the points associated with each level. Use geometrics

d. Determine realistic weights for all factors.

2. Evaluate three jobs using your point-factor process

a. The three jobs should be at different levels of the organization (e.g., data entry clerk, entry-level trainer, mid-level manager).

b. Obtain and/or develop a brief job description for each job. At a minimum, you should provide at least three major responsibilities for each job.

c. Evaluations should be logical in the context of real work (e.g., Trainer should not receive more points on "People Responsibility" than the Head of Marketing).

3. Collect market data for the same three jobs

a. Do NOT ask organizations for a salary structure or individuals about their own salary. This is generally confidential information and such inquiries may be viewed as naïve or insensitive. In addition, using another salary structure is not your work, and is likely to create problems for you (e.g., it will not match your regression results).

b. Gather information from at least two sources for each job.

c. Information may be obtained from web sites, job postings, newspaper ads, knowledgeable family and friends, etc.

d. Document each source (e.g., my Father who managed this job two years ago), and the exact data provided by each source (e.g., average, general range, one employee's specific salary).

e. If necessary, convert this data to a common scale by, for instance, making adjustments for issues such as currency, taxes, housing provided, UAE National vs. expatriates, etc. Clearly label all data at all steps in the process (e.g., What currency? Is housing included?).

4. Create Grade and Salary Structure

a. Use regression analysis, based on the points and salary data for your three jobs, to find the market pay line.

b. Create 6-10 grades (defined by point ranges), using your three jobs as a guide. The 6-10 grades should generally cover all jobs in the organization. However, it is probably best to exclude very low jobs such as Office Boy and the very top job such as CEO. The point ranges for these grades should not overlap. The size of the point ranges may remain the same or increase, but not decrease, as you go up. You may have to adjust these later if necessary.

c. For each grade, use the mid-point of the point range and the regression equation to find the mid-point of the pay range. Then find the minimum and maximum of each pay range using a spread of between 20% and 50%. The size of the spread may remain the same or increase, but not decrease, as you go up. Provide the minimum, midpoint, and maximum salary for each pay range, and document the spread for each pay range.

d. Report the overlap between adjacent pay ranges. The overlap should be between 20% and 50%. The overlap may remain the same or increase, but not decrease, as you go up. You may have to adjust your original point ranges or the spreads to finalize your structure.

e. Be sure to label your final structure as relevant (e.g., What is the name of the organization? Where is it located? Is this for UAE Nationals or Non-Nationals? Is housing included? What currency?).

All the below points are to be covered in 5 Pages