SKILL BUILDER DEVELOPING A WAGE STRUCTURE MGT 4543

SKILL BUILDER: DEVELOPING A WAGE STRUCTURE MGT 4543: Compensation Management Dr. Marler

ASSIGNMENT 1. Complete pay structure with pay grades (using info from pay step data & table with pay data) 2. Complete pay steps (using pay step data) There are 5 steps for each pay grade 3. Determine which salaries (if any) fall outside of pay grades 4. What actions should the company take?

COMPLETING THE PAY STRUCTURE 1. Use the max for each pay grade to find the minimum for that grade. In the table, the max = “top of grade” Example: Pay grade 1 Maximum is given ($36, 000) $36, 000 x. 655 = $23, 580 (minimum for pay grade 1) 2. Draw each pay grade on the graph provided (label X & Y axis)

CALCULATING MINIMUMS FOR PAY GRADES 2 -4 Pay Grade 2: Pay Grade 3: Pay Grade 4:

CONSTRUCT PAY “STEPS” 1. Use the pay step data to calculate pay steps for each pay grade Pay Grade 1 Step 1: $23, 580 to $25, 200 (70% x $36, 000 = $25, 200) Step 2: Step 3: Step 4:

CONSTRUCT PAY “STEPS” 1. Use the pay step data to calculate pay steps for each grade Pay Grade 2 Step 1: $25, 545 to $27, 300 (70% x $39, 000 = $27, 300) Step 2: Step 3: Step 4: Step 5:

CONSTRUCT PAY “STEPS” 1. Use the pay step data to calculate pay steps for each grade Pay Grade 3 Step 1: $31, 113 to $33, 250 (70% x $47, 500 = $33, 250) Step 2: Step 3: Step 4:

CONSTRUCT PAY “STEPS” 1. Use the pay step data to calculate pay steps for each grade Pay Grade 4 Step 1: $35, 239 to $37, 660 (70% x $53, 800 = $37, 660) Step 2: Step 3: Step 4:

DETERMINE WHICH SALARIES FALL OUTSIDE OF PAY GRADES Name Years Step Current Pay Grade Step Range Within Step? Hamilton 6 3 1 $27, 000 to $29, 520 Over Richardso n Smith Jones Wadsworth Johnston Prescott Lopez Jensen $30, 218

YOUR THOUGHTS v. Should the company take any action regarding employees who are out of step? v. Why might some of these employees be out of step?