Internally Consistent.edited

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1 Internally Consistent and Externally Competitive Internally Consistent and Externally Competitive HRM-FPX 5055 Comprehensive Reward System Gabrielle Hawkins-Dimming 01/06/2024

2 Internally Consistent and Externally Competitive Introduction Human Resources' role in this process will be to review and analyze job classifications and how they measure up in the current job market and make the necessary recommendations based on the right strategy for the organization. At the end of this assessment, we will better understand CapraTek and its process on internal consistency and external competitive compensation systems. CapraTek recently acquired the Mahoment facility and announced their 5-year business plan to expand the wireless capabilities to become the industry's leader in delivery and service capabilities. Compensation Strategy and Job Analyst The compensation plan is critical in developing an efficient and competitive organization. A poorly designed compensation plan can have the opposite effect (Polc, n.d.) . For HR professionals in any organization, discussing pay is a sensitive subject. CapraTek recognizes and comprehends that the compensation package they offer impacts their employees' productivity and behavior. Employees must perceive compensation as equitable, competitive in the market, accuracy-based, motivating, and easily understandable ( Designing pay structures for small organizations , n.d.) . Employers must recognize that their staff members are top priorities and that no two are alike regarding training, experience, work ethic, or qualifications. Employers must realize that employees are unique and that no two are alike regarding training, experience, work ethic, or capabilities. Based on four factors—the length of an employee's employment, their position within the company, their merit, and the kind and complexity of the work they perform —CapraTek needs to develop an inventive internal consistency and external competitive strategy ( What is a salary structure? (definition and how to develop one) - indeed n.d.) .

3 Internally Consistent and Externally Competitive Using five classifications within their organization—Administrative, Research and Development, Sales and Marketing, Production, and Management—Human Resources outlines and defines each task and job structure to ensure employees receive appropriate compensation based on the current market. After researching each job classification, CapraTek's Human Resources decided whether to use a skill-based or person-based approach to compensate their employees. Strategic Analyst Beyond the jobs, several factors exist to consider when creating a total reward system. Firstly, it is crucial to investigate the local demographics, including age and income. Secondly, internal experts report that local salaries are higher than those in the state as a whole and that the growth in these types of roles has stalled. This means recruiting and retaining higher caliber talent may only prove possible if a competitive plan is developed. Lastly, as the company's face, it is imperative to select the "cream of the crop," according to an internal HR professional. This is especially true given that this is a new plant with a new product, and success depends on the facility's early hits. Job Classification Impact on Competitive Compensation The main objective of implementing job classification is to determine job responsibilities within the organization and compare similar positions with those of competitors in the same industry. Several factors influence managers' decisions regarding compensation. For example, while some managers may favor higher wages to encourage workers, others may object, arguing that such wages will encourage laziness and inefficiency. The most critical factors are salary ranges, minimums, and maximums based on market pay data from relevant outlets and third-

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4 Internally Consistent and Externally Competitive party sources. CapraTek must guarantee that all current and future employees' salaries are within the fair market range. The job classification process is crucial in establishing compensation standards. Compensation Research To maintain its position as one of the top employers, CapraTek must realign all job duties for all areas to ensure that all employees receive fair compensation and are satisfied with what they receive. If employees are not happy with their compensation package, it will eventually affect their turnover rates. Market-based compensation uses market pay data to evaluate an organization's pay levels (Reports, n.d.) . The organization's goals are to develop a competitive compensation plan without putting a strain on the organization but still offering top compensation packages. Compensation Strategy A compensation strategy is a plan that outlines how decisions about pay and benefits will be made. It should align with your organization's goals, business strategy, and culture ( Compensation strategy & plan review: NFP compensation consulting 2022) . The pay structure that best fits CapraTek's organizational goals is the merit-based increase program, which bases salary increases on an employee's performance and contributions to the company. Quarterly evaluations, including the personal development plan and quarterly performance evaluations, will be implemented once the new compensation strategy is approved. Personal Development Plan

5 Internally Consistent and Externally Competitive For direct managers to set goals for their employees to focus on and achieve throughout the year, they must first create a personal development plan (PDP) with them. The PDP should also clearly outline the manager's expectations so the employee knows both. Evaluation of Performance An employee's work and results are measured formally through performance evaluations based on job duties and responsibilities. Direct managers meet with their staff members every six months to discuss personal development plans and provide feedback on the worker's performance. The evaluation reveals areas where the worker needs to improve and where they perform exceptionally well. The evaluation results then determine the employee's compensation rating. Conclusions In the end, internal job analysis establishes the basis for what the jobs entail, including the environment, requirements/skills, and tasks/responsibilities; job evaluations build on that process by applying company values and initiatives to determine what positions are essential to company structure and success to establish a hierarchy in conjunction with the analysis. This allows for identifying benchmark positions that can be compared across the department, creating a hierarchy and pay grades. A strategic analysis considers the competitive landscape, growth projections, local demographics, and the company's overall business strategy.

6 Internally Consistent and Externally Competitive References Compensation strategy & plan review: NFP compensation consulting . NFP. (2022, August 23). https://www.nfpcompensationconsultants.com/incentive-plan-design/compensation-plan- review/#:~:text=A%20compensation%20strategy%20is%20a%20plan%20outlining Designing pay structures for small organizations . Welcome to SHRM. (n.d.-a). https://www.shrm.org/topics-tools/news/benefits-compensation/designing-pay-structures- small-organizations Polc, L. (n.d.). Compensation strategy . HRM Handbook. https://hrmhandbook.com/hrp/compensation/strategy/#:~:text=The%20compensation Reports, B. and L. (n.d.). Market-based compensation: A process. https://compensation.blr.com/Compensation-news/Compensation/Compensation- Administration/zn-Market-Based-Compensation-A-Process/#:~:text=Market-based What is a salary structure? (definition and how to develop one) - indeed. (n.d.-b). https://www.indeed.com/career-advice/pay-salary/salaries-structure

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