Understanding and developing a pay structure can greatly influence an organization’s culture, effectiveness and ultimately their success. Pay structure is one of the most important fabrics in a healthy compensation plan. The structure and communication of the plan will separate aspiring plans from those plans that achieve long-term success. Pay structure often differentiates itself through various types and methods. A trending approach on the current market is broad banding. The broad banding theory is about creating a flatten hierarchy. Companies are now looking at how to create a team philosophy that centers on less upper management positions and allow group and teams to develop and function within those same capacities without the direct line or chain of command. Charlotte Mecklenburg Schools HR created a flatten hierarchy mentality after the last re-organization without the pay structure. Most of the positions in HR changed to reflect a new team concept to performing as an HR department. The changes included eliminating most of HR management positions, and establishing teams and groups within HR, this is further confirmation that this process is a growing trend. The district decentralized HR decision-making ability from the top and allowed it to become local, aimed at enhancing performance, and improving customer service.
Broad Banding Advantages
The broad banding of pay structures have condensed many of the pay steps and grade that once dominated most industries pay structures. This method also allows companies to overlap pay groups and flatten the organizational structure especially within the higher levels of management in company. Flatting the hierarchy verses, vertical approaches create more opportunities for multi-skil...
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...b description method based on outdated market analyses. The problem with this pay structure it is hard to administer in a public sector pay plan when the common though process is to do more with less. This encourages employees to function outside of their job description and complete work that is could be consider outside the band for their position but does not compensate them for the work they perform. Shrinking budgetary constraints have been the main culprit behind flatting organizational structure but banding would be hard to adjust for lower level position based on the adapted theory of the district. I do think that employees could benefit from broad banding if the pay structure supports and compensate employees for their efforts and work performed.
Works Cited
Milkovich, G., Newman, J., & Gerhart, B. (2014). Compensation. (11th ed.). New York: McGraw-Hill.
This project combines pay services from participating departments and agencies at the Public Service Pay Centre in Miramichi, New Brunswick. Compensation advisors in departments were given the option to move to Miramichi, but most did not. Many new staff were hired and trained for the Centre. There are some organizations like CRA and CBSA that are being serviced by their own internal departmental compensation advisors instead of those in Miramichi, but are still using the Phoenix system.
Compensation is made of a base salary (paid by the hour, work or the year; excluding overtime or bonuses), variable pay (bonuses, profit sharing/stock options which work hand and hand with the performance of the company), and benefits (to include health insurance/savings plans – 401(k), or tuition reimbursement). The traditional way of determining base pay for jobs was to compare jobs in the same industry. Now industry and market, no long work by themselves, the current thinking is more person-based that considers knowledge, skills, and competencies of the work. This, however, is best suited for high-performing environments that remain flexible in their deployment of human capital.
Deciding which pay form to use when compensating employees is extremely important to a company. Many things are taken into consideration: labor costs, the correlation between performance and pay, customer service, and the ability to attract and retain employees which is extremely important to FastCat’s need for innovation. We believe a single pay structure coincides with our single based plan for the organization. We want to keep things simple and understandable to all areas of the organization. This strategy will allow employees to understand how their performance and the performance of others relate to the success of the company through specific measures. It is also important that the strategies align with the objectives of FastCat. We beli...
In April 2010, KK BB, the CEO of Marshall & Gordon, a leading public relations firm met with the firm’s leadership committee off-site in Miami. This off-site brought together Marshall & Gordon’s executive committee, practice and regional heads, and senior HR officers to discuss on redesigning the firm’s compensation system. A global advisory taskforce, under the direction of an external consulting firm, had spent three months collecting and analyzing data. Marshall & Gordon hired external specialists to design the new performance management program. The specialists proposed that the senior managers and human resource form a global advisory unit together with Marshall & Gordon partner to represent the firm’s five regions of the firm and lead the design process. The advisory unit surveyed all consultants in February in order to understand their way of thinking about the fairness, worth, and effect of the current performance management system. Majority of the interviewees responded to the corporate surveys implying that the subject was topic was especially exciting to them. Interviews gave insights on present and prospective business plans and direction. The survey also showed that specific focus across certain employee populations should be given. Six current hires from key competitors were also interviewed to comprehend competitor pay practices and compensation program structures. Further focus groups discussions and key information interviews enabled the taskforce’s to understand the needs of certain groups within Marshall & Gordon’s worker population. The survey culminated with the taskforce conducting interviews of 20 partners and principals togeth...
Mathis, R. L., & Jackson, J. H. (2010). Human resource management (13th ed.). Mason, OH: Thomas/South-western
This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated.
Jones, F.F., Scarpello, V., & Bergmann, T. (1999). Pay procedures - What makes them fair? Journal of Occupational and Organizational Psychology, 72(2), 129-145.
Performance related pay is a financial reward given to employees whose work is considered to have reached a required standard or is above average. “PRP criteria can relate to the individual employee, to work groups or to the organization as a whole” (Armstrong, 2002). It is fair to provide people with financial rewards as a means of paying them according to their contribution (Armstrong 1993:86). The primary purpose of performance related pay in any organization is to recruit, retain and motivate the workforce. It also helps in focusing employees’ minds on particular goals (Protsik, 1966); communicate to employees an organization’s core values, and change the culture of that organization (Kessler and Purcell, 1991).
Ulrich, D., Younger, J., and Brockbank, W. 2008. “The twenty-first century HR organization.” Human Resource Management, 47, pp.829-850.
Remuneration management is defined as the sum received for an employment or service delivered, this includes the money received on a monthly basis as well as benefits given as rewards (investopedia,para.1 ). Individualism need to be taken into account when implementing these remuneration structures or reward schemes, equal pay plays a role in balancing earnings among the diverse workforce (Shen, Chanda, D’Neetto and Monga,2009,p.241). The Woolworth’s Holdings uphold remuneration policies which have the purpose of making sure to attract and hold on to the best talent, that they are congruent with the strategies of the company and are the determinants of performance during the short and long phases. The policy considers the board members and the employees. This policy manages employees of the company by giving...
With the internet accessible to almost everyone, work seekers are furnished with more data than ever. Data can be acquired for employment opportunities, sets of expectations, and even salaries. Now and then when rounding out an application, a box will request what salary you desire. A few job advertisements actually request that you send your resume with salary necessities. These applications are some of the time very hard to decide what salary you desire and/or what is a fair salary for this position. How much does that employer typically pay? Is the employment candidate worth the top pay? Some fundamental ideas ought to be comprehended before attempting to negotiate your salary. To begin with, one must understand that a job in New York City
Formalized compensation goals serve as guidelines for managers to ensure that wage and benefit policies achieve their intended pur¬pose. The more common goals of compensation policy include to reward employees’ past performance, to remain competitive in the labor market, to maintain salary equity among employees, to motivate employees’ future performance, to maintain the budget, to attract new employees, and to reduce unnecessary turnover. It is important for the organ...
In any organization, sometimes, monetary schemes doesnot get people involve to pursue work in a certain way, rather it demoralize and threatens the self-esteem of employees. According to Meyer (1975), “the basis for most of the problems with merit pay plans is that most people think their own performance is above average”. The amount may ...
The research further revealed that private sector employees would like to have their pay linked to own performance (48%), the cost of living (38%) and their organization’s performance (28%). Meanwhile, public sector workers would like to have their pay linked to the cost of living (60%), their individual performance (36%). The fact that some private company employees got pay rise in the year 2014, it is a policy action that validates private sector employees tend to yield more positive attitudes pay. The private sector employee pay and benefits are tied to individual or group performance and this is the whole reason for private companies for implementing a policy that is used to award employees who achieve the set targets. The employers know very well that this type of remuneration motivates employees to do more
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay