3. Describe three approaches to selecting jobs for inclusion in the pay survey
As described in the book, there are three approaches to selecting jobs for the pay survey; the benchmark approach, the low-high approach, and the benchmark conversion/survey leveling approach. It’s important not to choose too many jobs in the survey as it complicates things therefore choosing benchmark jobs is a wise method as it will focus on the most common jobs and give a place to start when comparing other jobs to it. The low-high approach takes the highest and lowest paid within a benchmark job with similar skills or competencies and gives the organization a pay range to work within. This can be risky as it weighs heavily on how closely the benchmark job matches the skill or competency. Lastly, benchmark conversion although relatively subjective, is another method that can be used, where the jobs in the salary survey don’t match that of the organization but they are used as a benchmark to determine what appropriate pay level to use.
4. Contrast pay ranges and grades with bands. Why would you use them? Do they assist or hinder the achievement of internal alignment? External Competitiveness?
Pay ranges are pay intervals used for individual jobs or groups, such as those for a paramedic, cook, or manager. They are often determined by analyzing the job market, job evaluations, and performance appraisals. Grades with bands, however, involve broad pay categories that break down jobs based on shared responsibilities, skills, and qualifications. They are often broken down into entry-level, mid-level, and senior-level jobs, but can be further broken down based on specific skills, experience, performance, etc. Both methods require frequent reviews to ensure that they are aligned both externally and internally. If they are not tweaked to mimic the external environment, they can negatively impact the motivation of the employees as well as their willingness to stick around.
Moodle Assignment 8: RQ#3, RQ#4 and EE#1
3. What are two main types of employer-sponsored pension plans? How are they similar to and different from each other?
The two types of employer-sponsored pension plans are Defined Benefit and Defined Contribution pension plans. Both plans are designed by the employers to help their employees save for retirement. In defined benefits plans, the benefit is predetermined based on salary, and time served whereas in defined contribution plans the employee has an account within the organization that offers benefits based on the amount of money contributed by the employee, and
the investment success. In the defined benefits plan the employer bears the burden of the payout.
Conversely, with the defined contribution plans, the employee is responsible for providing funds to their account. Typically, defined benefit plans are best suited for long-term employees, whereas defined contribution plans suit short-term employees, as they can often be ported.
4. What are the reasons for the growth of defined contribution plans?
