1. 1 Dessler, Cole and Sutherland Human Resources Management in Canada Canadian Ninth Edition Chapter Eleven Establishing Strategic Pay Plans © 2005 Pearson Education Canada Inc., Toronto, Ontario 11-1

2. 11-2 Basic Considerations in Determining Pay Rates Legal-Employment/Labour Standards -Pay Equity -Human Rights -Canada/Quebec Pension Plan -Workers’ Compensation -Employment Insurance Union - collective bargaining Compensation policies - leader or follower in pay Equity - internal and external Legal-Employment/Labour Standards -Pay Equity -Human Rights -Canada/Quebec Pension Plan -Workers’ Compensation -Employment Insurance Union - collective bargaining Compensation policies - leader or follower in pay Equity - internal and external © 2005 Pearson Education Canada Inc., Toronto, Ontario

3. 11-3 Establishing Pay Rates Factor comparison method Step 1. Job Evaluation Classification/grading method Ranking method Point method © 2005 Pearson Education Canada Inc., Toronto, Ontario

4. 11-4 Establishing Pay Rates Pay Grade -jobs of approximately equal value eg. -point: jobs falling within a range of points -ranking: all jobs falling within 2-3 ranks -classification: jobs already in classes/grades -factor comparison: specified range of pay rates Pay Grade -jobs of approximately equal value eg. -point: jobs falling within a range of points -ranking: all jobs falling within 2-3 ranks -classification: jobs already in classes/grades -factor comparison: specified range of pay rates Step 2. Group Similar Jobs Into Pay Grades © 2005 Pearson Education Canada Inc., Toronto, Ontario

5. 11-5 Establishing Pay Rates -formal or informal survey by employer -commercial, professional, and government salary surveys -formal or informal survey by employer -commercial, professional, and government salary surveys Step 3. Conduct a Wage/Salary Survey © 2005 Pearson Education Canada Inc., Toronto, Ontario

6. 11-6 Establishing Pay Rates Job Evaluation Points Average Wage Rates * ** ** * *** * Wage Curve Step 4. Price Each Pay Grade – Wage Curves © 2005 Pearson Education Canada Inc., Toronto, Ontario

7. 11-7 Establishing Pay Rates Step 5. Fine-Tune Pay Rates Broadbanding Band 1 Trainee Band 2 Independent Contributor Band 3 Senior Specialist Band 4 Expert Expertise and Responsibility (Pay Grade) Pay © 2005 Pearson Education Canada Inc., Toronto, Ontario

8. 11-8 Current Trends in Compensation Skill/competency-based pay Customized job evaluation plans © 2005 Pearson Education Canada Inc., Toronto, Ontario

9. 11-9 Pay for Managerial and Professional Jobs Salary *reduced emphasis Benefits Short-term incentives*increased Long-term incentives emphasis Perquisites Salary *reduced emphasis Benefits Short-term incentives*increased Long-term incentives emphasis Perquisites © 2005 Pearson Education Canada Inc., Toronto, Ontario

10. 11-10 Important Current Issues in Compensation Management -to eliminate systemic pay discrimination by providing equal pay to: -male-dominated job classes -female-dominated job classes of equal value -to eliminate systemic pay discrimination by providing equal pay to: -male-dominated job classes -female-dominated job classes of equal value Pay Equity © 2005 Pearson Education Canada Inc., Toronto, Ontario