1. + Chapter 6 Part 1: Building Internally Consistent Compensation Systems MGT 4543 ~ Compensation Management

2. + Forms of Equity & Pay Satisfaction Background information A correlation coefficient (r) represents _______________________________________________________ Examples of variables _________________________________________________________ Can be equal to or between _____ and _____

3. + Examples of Correlations (a)(c) (b) If you had to guess, what would the correlation coefficient be for (a) ____ (b) ____ (c) ____

4. + Forms of Equity & Pay Satisfaction Correlation ≠ Causation Job Satisfaction Turnover

5. + Forms of Equity & Pay Satisfaction Regression Directional Job Satisfaction Turnover

6. + Forms of Equity & Pay Satisfaction Moderators Directional Job Satisfaction Turnover Organizational Commitment

7. + Forms of Equity & Pay Satisfaction (article will be provided in class) Read the assigned article & answer these questions: 1. Why is it important for employees to be satisfied with pay? 2. Explain procedural and distributive forms of justice as they relate to pay? Which seems to matter most to employees? 3. List and describe the four forms of equity with which employers should be concerned. 4. What is the purpose of the article?

8. + Forms of Equity & Pay Satisfaction Read the assigned article & answer these questions: 5. Describe the sample data from which data were collected. 6. Using the results, rank the importance of the 4 types of equity to employees in terms of influencing their overall satisfaction with pay: 7. What other factors might affect the equity/pay relationship? (moderators) 8. What was the correlation between age and each type of equity? Explain each relationship (how age and each type of equity relate to each other).

9. + Internally Consistent Pay Systems… …define the relative value of each job among all jobs within a company External equity – same job, different organization Internal equity – different job, same organization Individual equity – same job, same organization

10. + Degree of responsibility Salary in 10,000’s Internally Consistent Compensation Structure

11. + Equity Theory Review my inputs = other ’ s inputs my outcomes other ’ s outcomes Equity sensitivity Under-reward Over-reward

12. + Responses to Inequity alter personal _______________ cognitive _______________ _____________ the inequitable situation choose another _______________

13. + Justice Review Distributive Justice Equity—are _________________________ fair? Procedural Justice Are _________________________ fair? Interactional Justice Is _________________________ fair?

14. + Questions on Establishing Internal Consistency What is an internally consistent compensation system? What is job analysis? What is job evaluation?

15. + Questions on Establishing Internal Consistency What is job content? What are worker requirements? What are working conditions?

16. + Questions about Job Analysis Step 1: Determine a job analysis program What are the two options for a job analysis program? Step 2: Select and train analysts Why is it important for the job analyst to be trained? Why does The Standard Occupational Classification (SOC) System have limited use?

17. + Questions about Job Analysis Step 3: Direct job analyst orientation What types of internal & external information should job analysts review before beginning specific job analysis techniques? Step 4: Conduct the study – data collection methods & sources of data What are the most common methods of data collection? What are the most common sources of job analysis information?

18. + Questions about Job Analysis Step 5: Summarize results – write job descriptions What is a job description? What are job titles? What are job summary statements? What are job duties?

19. + Questions about Job Analysis Step 5: Summarize results – write job descriptions What are worker specifications? What is skill? What is ability? What is knowledge?

20. + Job AnalysisJob DescriptionJob Evaluation Open-ended questionnaire Highly structured questionnaire Interview Observation Work diary or log Point Method Simple Ranking Paired Comparison Classification Method Job Title Job Summary Task, Duties, Responsibilities Job Specification Study Guide Slide

21. + Job Analysis Methods Open-ended questionnaire Highly structured questionnaire Interview Observation Work diary or log

22. + Questions on Legal Concerns with Job Analysis Is a job analysis legally required? How can the following laws influence job analysis? Equal Pay Act Fair Labor Standards Act Americans with Disabilities Act

23. + O*Net Occupational Information Network (O*NET) http://www.onetonline.org/ Comprehensive database Provides information about various jobs Job content Experience requirements Work context Information about pay

24. + Questions on Compensable Factors What is job evaluation and how does it differ from job analysis? What are compensable factors? What are the universal compensable factors?

25. + The Job Evaluation Process Single versus multiple techniques Choosing the committee Training employees to conduct evaluations Documenting the plan Communicating with employees Setting up the appeals process

26. + Questions on Job Evaluation Techniques What is market-based evaluation? What is job-content evaluation?

27. + Questions on Job Evaluation Techniques What is the point method? How is a benchmark job used? What is the simple ranking method?

28. + Questions on Job Evaluation Techniques What is the paired comparison method? What are classification plans? Who frequently uses the classification method?

29. + Questions on Competitive Strategy What are the alternatives to job evaluation? What is the major limitation of internally consistent pay systems?