Pay Planning

Pay
For
Performance
Paying Employees
Paying employees too little or too much can
affect your organizations ability to attract
qualified talent and retain valuable employees.
Determining the proper pay scale is essential for
productivity, and its also necessary for cost
control.
Setting the pay scale too low causes recruiting
challenges, and setting the scale too high adds
costs to replace employees.
How do you figure how much a job is worth?
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In this session ???
Basic factors to determine pay rates
Job evaluation
Establish pay rates
How to put a salary mark on
Management and professional jobs?
Difference between competency
based an traditional jobs.
The present day concept
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The Law the minimum wage
In 2013 the Punjab government raised the minimum
wage from Rs. 7000 to Rs.9000 through a
notification issued by the Minimum Wage Board by
making amends in the Ordinance issued in 1961.
The rules of pays is also governed in the
companies ordinance of 1984, and in the labour
acts.
Some organizations by pass this by entering into a
contract with a middle company to provide
specialized personnel and are not covered under
the minimum wage regulations. There are
senatorial, security, mass labour etc.
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Putting a price tag
Putting a price tag on a staff job can be a lot
harder than pricing your company's products and
services.
Pay packages have so few rules. They go up and
down depending on geography, industry
conventions, seniority and the job market, as well
as a candidate's background.
The salary you set must be high enough to attract
top applicants but not so high that it eats into
your profits or survival.

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How much a job is worth?
5 steps to determine an employee's salary:

1. Review your own pay practices.
2. Define the job - as clearly and completely
as possible.
3. Track the competition.
4. Set the salary range
5. Bundle pay and perks.
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Factors that determine pay scales
Based on quality of education and the institutions
attended.
Based on experience in Blue Chip companies.
Based on uniqueness and a critical job
Based on geographic location
Fewer kind of certain jobs
Impact of salary on payroll
Effect on Motivation policy
Exceptional skills developed with education and
experience.



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The salary survey
Some companies occasionally
conduct market surveys either by
themselves or through professional
hiring companies which are closer to
the job market and have a better
picture.
Of and on for particular jobs a salary
advice is also sought to check the
market base.
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The salary survey--STEPS
Step 1: a) of benchmark jobs
b) of government and professional jobs
c) use of internet and advertised jobs
Step 2: a) evaluate the job
b)Compare compensable factors
Step 3: a) Group similar jobs in same scale.
Step 4: a) develop a wage grade
b) A wave curve to see the different wages
Step 5: a) Fine tune the pay rates
b) Develop a pay range
c) Correct your own pay structure
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Importance of Job Evaluation
to determine pay scales
The basic principle ---job that requires greater qualification and
more responsibility with complex duties should get more pay
than with jobs with lesser requirements.
This aims to determine a jobs relative worth.
It is a formal and systematic comparison of jobs to determine
the worth of one job relative to another
Job Description will tell about Job based tasks and work
performed
Job Specification will tell his experience, knowledge, skills and
abilities.
Prepare and use a method most appropriate to the job.
to identify the need, form a committee, determine factors, gain
the employee confidence and then evaluate.
PLEASE READ PAGES 432---439

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Point ranking method
They are Described, Analyzed and
weighted---the outcome of a total score
expresses the weight of the particular job
in relation to others.
This is an analytical method, in which the
job is broken down into factors or key
elements like skills, efforts, responsibility,
you do job analysis and grade the job by
adding points to every aspect to give it the
required weight.

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Job Classification / grading method
Determine the difficulty or variety in the job
Amount of supervision required
Amount of decision making required
The originality of the job
Amount of interpersonal skills
Basic responsibility
Experience & knowledge required
The ENTIRE grade is thus defined.
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Pricing Managerial
& Professional jobs
Developing pays for senior managers and
professionals is the same as other employees the
general idea is to attract the best persons for your
jobs.
The compensation for top executives usually
consists of:
Basic pay
Short term incentives
Long term incentives
Executives benefits & perks
The job of CEO and the top Management looks at
individual aspects to determine the pay package.
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Payment for Competency
Competency means something that you can do or
a behaviour that you can demonstrate, both by
your working skills and by actually doing a
specific activity.
We can simply define competencies as a
demonstration of knowledge, skills, or behavior
that enables performance.
It is a pay for knowledge or skill based pay
The pay is thus tied to his/her skill level
EXAMPLES: A special mechanic for a specific
machine, a telephone operator, a receptionist etc

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The grade method
The grades are designed for different
levels and within each grade is an upward
movement by increase in salary range an
benefits.
Promotions are based on a change in
grade and each grade has its own
movement structure and benefits level and
authority.
As you rise in the grade the more
responsibility you add to your job.
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What is in store tomorrow ?
Competitiveness and business survival are basic
factors companies are looking for. Payroll is getting
a big share in financial spending and added with
benefits and incentives companies continue to look
for quality in manpower resources.
The only way to have a competitive advantage is by
an able and effective HR.
Thus potential employees will have to strive hard
and continue to improve their working, learn more
skills and change themselves with the changing
times to be able to perform and retain their personal
advantage.
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Thank you



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