OL 325 Final Project Case Study: Designing a Pay Structure

Final Project Guidelines and Rubric Overview The importance of compensation varies depending on the viewpoint, as described by Barry Gerhart and Jerry Newman in Compensation. Society views  compensation as a measure of justice; managers may view compensation as a major expense or a motivator; employees view compensation as an entitlement or  as an incentive. Regardless of the viewpoint, fairness and equity are essential. Compensation must also be up-to-date, competitive in the market, and easy to  understand.  Aligned pay structures support the way the work gets done, fit the organization’s business strategy, and are fair to employees. Organizations typically task an in house human resource (HR) professional or hire an HR consultant to create and maintain the company’s pay structure. In this final project, you will design a pay  structure using the specially designed final project case scenario. The project is divided into two milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final  submissions. These milestones will be submitted in Modules Three and Five. The final product will be submitted in Module Seven. The final project includes a  new section on pay mix which also needs to be completed prior to submission. In this assignment, you will demonstrate your mastery of the following course outcomes:  ∙ Students will gain an understanding of the evolution and administration of compensation and benefit programs for organizations. ∙ Students will explore wage theory, principles and practices, unemployment security, worker income security, group insurance, disability insurance, and  pension plans and how these compensation and benefit items are balanced to provide incentive and recruitment of a high-performance workforce. ∙ The connection between the organization’s mission, objectives, policies, and the implementation and revision of their respective compensation and  benefit systems will be analyzed to gain a deeper understanding of the importance of such systems to the organization’s overall human resource  management. ∙ At the conclusion of this course, students will be able to demonstrate the acquisition and application of theories and concepts that support the  enhancement and proficiency in seven primary competencies: strategic approach, research, teamwork, communication, analytical skills, problem solving,  and legal and ethical practices. Prompt You are the Human Resource Director for a premier supplier of rubber floor mats and matting that is expanding its production operations to Rockville,  MD. The organization is headquartered in San Antonio, TX. Based on the organization’s mission statement, the company’s goal is to provide top-quality 1 products with customer service that well exceeds expectations and with a strong commitment to continuous improvement. The following personnel are  required to start the Rockville operation (the numbers in parentheses indicate the number of positions): • Director of regional operations • Assistant to the director of operations • Operations analyst (2) • HR director (this is you) • HR administrative assistant • Benefits manager • Lead production worker (3) • Production worker (10) • Production manager • HR generalist • Front desk receptionist In your final project you will be designing a pay structure based on the final project case study you have been reviewing throughout the course and utilizing with  your milestone activities. Specifically, you must address the critical elements listed below.  I. Internal Consistency:  A. Create complete job descriptionsfor the benefits manager and production worker position using O*NET (see Module Three Reading and  Resources area). Note: There may be several versions of these positions on O*NET. You should create personalized job descriptions that are tailored  to the company. B. Calculate the job evaluation points for the administrative assistant, operations analyst, production worker, and benefits manager jobs. Provide a  rationale for assigning specific weights and degrees to the various jobs. Use the job descriptions you created in section one, as well as the job  descriptions in Appendix A of the final project case study, as a reference.  C. Create job familiesfor all the roles at the Rockville location. The families may be illustrated in a table or bullet format. List positions within each family  based on the difficulty level. Provide a rationale for why jobs were assigned to the various families.  II. External Competitiveness: A. Calculate the weighted means of base pay for each of the benchmark jobs (administrative assistant, operations analyst, production worker, and  benefits manager) from the six companies listed in Appendix B of the final project case study. B. Calculate the predicted base pay for each of the following benchmark jobs: administrative assistant, operations analyst, production worker, and  benefits manager. C. Create a market pay line using the following benchmark jobs: administrative assistant, operations analyst, production worker, and benefits manager.  Clearly label your job evaluation points and salaries. D. Calculate the adjusted pay ratesfor each benchmark job based on your company’s decision to lead in base pay by 3%.  E. Create pay grades by combining benchmark jobs that are substantially comparable for pay purposes. Clearly label your pay grades and explain why you combined any benchmark jobs to form a grade. F. Create pay rangesincluding minimum and maximum for each of the pay grades based on pay grades created in item E above.2 III. Pay Mix: (Note: This is a new section that was not completed in the milestone projects. This must be completed prior to Final Project submission.) Your 1-2  Assignment: New Compensation System will provide some insight into elements of a pay mix and how those components complement the compensation  package. A pay mix is a company’s relative distribution of compensation components such as base pay, merit, incentives, benefits, etc., as described  by Barry Gerhart and Jerry Newman in Compensation. Different job grades may have different pay mixes. For example, executives often have  a higher percentage of long-term incentives. Pay mixes are often illustrated in a pie chart.A. Create a pay mix for each job family, illustrated in a pie chart. Provide rationale for each pay mix connecting your decision to the company’s strategic  goals. In addition, provide at least three examples of employee benefits you recommend the company propose in their total compensation package.  Below is an example of pay mix pie chart. Note: Numbers used are not from the data in this case study.3 Milestones Milestone One: Internal Consistency In Module Three, you will submit the internal consistency section of the final project that includes job descriptions, job evaluations, and job families. This  milestone will be graded with the Milestone One Rubric. Milestone Two: External Competitiveness In Module Five you will submit external competitiveness section of the final project that includes weighted means, predicted base pay, market pay line,  adjusted pay rates, pay grades, and pay ranges. This milestone will be graded with the Milestone Two Rubric. Final Submission: Designed Pay Structure In Module Seven, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should  reflect the incorporation of feedback gained throughout the course. Note: The final project includes a new section on pay mix which also needs to be completed  prior to submission. Refer to the III. Pay Mix section in the project prompt above, as well as your work on the 1-2 Assignment: New Compensation System. This  submission will be graded with the Final Project Rubric. Final Project Rubric Guidelines for Submission: Your final project will be in a Word document, approximately 13–18 pages in length (plus a cover page and references) and must be  written in APA format. Your Word document may include Word tables, Word lists, Excel screenshots, and rationale in written paragraphs. Use double spacing, 12- point Times New Roman font, and one-inch margins.Critical Elements Exemplary Proficient Needs Improvement Not Evident ValueInternal Consistency:  Job DescriptionsMeets “Proficient” criteria  including exceptional job  analysis for creating job  descriptions (100%)Provides complete job  descriptions tailored to the  company (85%)Provides job descriptions that  are incomplete or not tailored  to the company (55%)Does not provide job  descriptions required (0%)11Internal Consistency:  Job EvaluationMeets “Proficient” criteria and rationale is exceptionally clear  and easy to follow (100%)Provides complete job  evaluations for all identified job  descriptions and explains rationale for assigning specific  weights and degrees to the  jobs (85%)Provides incomplete job  evaluations for all or some of  the identified job descriptions  or does not explain rationale  for assigning specific weights  and degrees to the jobs (55%)Does not provide complete job  evaluations for identified job  descriptions and does not  provide rationale for specific  weights and degrees to jobs (0%)134 Critical Elements Exemplary Proficient Needs Improvement Not Evident ValueInternal Consistency:  Job FamiliesMeets “Proficient” criteria and  rationale is exceptionally clear  and easy to follow (100%)Provides logical job families for  all job roles and explains  rationale for why jobs were  assigned to the job families (85%)Provides illogical job families  for some of the job roles or  does not explain rationale for  why jobs were assigned to the  job families (55%)Does not provide job families and does not provide rationale (0%)7External  Competitiveness:  Weighted MeansProvides correct weighted  means for each benchmark job  identified (100%)Provides incorrect weighted  means for some of the benchmark jobs or provides  weighted means for all  benchmark jobs with consistent  computational errors (55%)Does not provide weighted  means for benchmark jobs (0%)7External  Competitiveness:  Predicted Base PayProvides correct predicted base  pay for each benchmark job  identified (100%)Provides incorrect predicted  base pay for some of the  benchmark jobs or provides  predicted base pay for all  benchmark jobs with consistent  computational errors (55%)Does not provide predicted  base pay for benchmark jobs (0%)15External  Competitiveness:  Market Pay LineProvides correct market pay line for each benchmark job  identified with clear labeling of  job evaluation points and  salaries (100%)Provides incorrect market pay line for some of the benchmark  jobs or provides market line  but does not clearly label job  evaluation points and salaries (55%)Does not provide market pay line for benchmark jobs and  does not clearly label job  evaluation points and salaries (0%)11External  Competitiveness:  Adjusted Pay RatesProvides correct adjusted pay  rates for each benchmark job  identified (100%)Provides incorrect adjusted pay  rates for some of the  benchmark jobs or provides  weighted means for all  benchmark jobs with consistent  computational errors (55%)Does not provide adjusted pay  rates for benchmark jobs (0%)7External  Competitiveness:  Pay GradesMeets “Proficient” criteria and  rationale is exceptionally clear  and easy to follow (100%)Provides correct pay grades for  combined benchmark jobs, labels pay grades incorrectly,  and explains why combined  benchmark jobs form a grade (85%)Provides incorrect pay grades  for combined benchmark jobs  or labels pay grades incorrectly, or does not explain why  combined benchmark jobs  form a grade (55%)Does not provide pay grades  for combined benchmark jobs,  does not label pay grades  correctly, and does not explain  why combine benchmark jobs  form a grade (0%)75Critical Elements Exemplary Proficient Needs Improvement Not Evident ValueExternal  Competitiveness: Pay RangesMeets “Proficient” criteria and  rationale is exceptionally clear  and easy to follow (100%)Provides correct pay ranges for  each pay grade and provides  rationale for pay ranges (85%)Provides incorrect pay ranges  for some pay grades or does  not include rationale (55%)Does not provide pay ranges  for pay grades and does not  provide rationale (0%)7Pay Mix Meets “Proficient” criteria and  supports rationale with outside  resources (100%)Provides logical pay mix for  each pay grade illustrated in a  pie chart and provides  rationale for pay mix (85%)Provides logical pay mix for  some pay grades or pay grades  are not in a pie chart or does  not include rationale (55%)Does not provide pay mix for  pay grades in a pie chart and  does not provide rationale (0%)7Articulation of  ResponseSubmission is free of errors related to grammar, spelling,  syntax, organization, citations,  and is presented in a  professional and easy to read  format (100%)Submission has no major errors related to grammar, spelling,  syntax, organization, or  citations (85%)Submission has major errors related to grammar, spelling,  syntax, organization, or citations that negatively impact  readability and articulation of  main ideas (55%)Submission has critical errors related to grammar, spelling,  syntax, organization, or citations that prevent  understanding of ideas (0%)8Total 100%