1. Chapter #9

2.  #1 Decide upon how many pay structures Exempt, Non exempt, by job families, by geography?  #2 Determine market pay line.  Look #213 Clerks

3.  #3 Define Pay Grades  Will you go  Wider? It will decrease hierarchy  Will you go narrow? It will increase hierarchy

4.  Look #215  Establish mid points first  Then maximum then minimum rates  They should overlap so ee can be promoted without a pay increase

5.  New employees get paid equal to or more than established employees.  Not a good idea….equity theory  Internal equity  External equity  Green circle rates, lower than minimum  Red circle rates, higher than maximum

6.  Very important!!!!!  Index the relative competiveness of internal pay rates  Compa – ratios EE Pay Rate/Pay range midpoint  Compa = 1 means that ee pay =pay range midpoint  Compa = more than 1 means that ee pay is greater than midpoint  Compa = less than 1 means that ee pay is les than midpoint

7.  Should encourage ees to perform at their best.  Research does NOT show that merit pay increases productivity UNLESS it is enough to be meaningful

8.  Will merit pay evaluations be on  Reoccurring ….Anniversary dates  Nonreocurring…..lump sum  Depends on efficient performance of ee  And ee’s [osition in pay range  Merit pay grid Look #222

9.  Budgets are a percentage of employee’s ◦ Total base pay  5% x $10,000,000  Merits budget will be $500,000  HR has to ask supervisors to indicate distribution according to performance ratings  Then HR has to calculate the expected number of ees that fall into each cell./

10.  Design sales depends on ◦ Sales volume? ◦ New Product sales? ◦ Overall sales growth?  Should it be  Salary only?  Salary plus bonus?  Salary plus commission?  Commission plus draw?  Commission only?  Draws Recoverable or Non Recoverable?

11.  Straight  % of sales  Graduated  `Increase sales increased commission  Multiple tiered  Increase $ only after a certain amount of sales

12.  Depends on TRAINING  Access to Training  Inhouse or outsourced  Certification and Recertifications  SPHR PHR