2. internal alignment Flashcards
what is internal alignment?
also known as internal equity, it refers to the pay relationship between the jobs or skills or competencies within a single organization
what does pay structure refers to?
the different pay rates for different work or skills within a single organizations
how can pay structure be defined by?
- number of levels of work
- pay differentials between the levels
- criteria or base used to determine those levels and diferentials
what is the pay nature for number of levels?
hierarchical
what is pay nature - number of level based on?
- number of levels
- shows reporting relationships
- must be consistent with the compensation strategy and fit within the context of the total compensation system/program
what is the pay difference among levels called?
differentials
how will higher pay come about?
- work that requies more skills and knowledge
- performed in unpleasant work conditions
- work that add more value to the company
what can be paired with different pay level policies?
percent differetials
what are the two components under the criteria?
content and value
what is the content in criteria referring to?
work performed in a job and how it gets done
what is content based on?
a structure based on content ranks jobs based on skills required, complexity of tasks, problem solving and/or responsibility
what does value mean?
the worth of the work
what is value based on?
a structure based on value focuses on the relative contribution of the skills, tasks and responsibilities
what are the external factors?
economic pressures, government policies, law and regulations, stakeholders, cultures and customs
what is economic pressures?
supply and demand for both labour and products or services
what are the examples for government policies, laws and regulations?
minimum wages act and national wage council
what are the external stakeholders?
- unions, stockholders, and political groups have a stake in pay structure
what do cultures and customs play in internal structures?
cultural factors pplay a role in shaping pay structure
what is required in effective organizational strategy?
an effective organization strategy may require an aligned, yet adaptable structure
what is human capital?
- the education, experience, knowledge, abilities, and skills required for the job
- a major influence on internal structures
- greater the added value, higher the pay
what is required in producing the good and services
the organization design, the work and the skills/knowledge required to perform their work
what is outsourcing specialist?
based on the internal structure of their home employer
what is delayering?
- cut an entire level of work
- cut unnecessary noncontributing work and changes remaining jobs’ structure and value
what does internal labour markets refers to?
the rules and procedures that determines the pay for different jobs within a single organization and allocate employees among those different jobs
what is hierarchical internal structures?
more job grades, more salary range
what is the egalitarian internal structures?
fewer job grades, fewer salary ranges
how are employees being valued in egalitarian?
they are valued equally
what are the advantages of egalitarian?
there are fewer levels and small diferentials
what are the disadvantages of egalitarian?
equal treatment can mean more knowledgeable employees feel underpaid
how is egalitarian related to greater performance?
close collaboration and sharing of knowledge are required
how will egalitarian impact the internal structure on performance?
affected by pay model, level and employee performance
what are the differences comparing hierarchical and egalitarian?
values the differences in work content, skills and contribution and includes detailed descriptions of work done at each level
what will be the result afer using the hierarchical structure?
greater performance when work flow depends on individual contributors
how will hierarchical affect the employees?
higher performers quit less when the pay is based on performance rather than seniority and people have knowledge of the structure
what are the consequences of an interally aligned structure?
undertake training, increase experience, reduce turnover, facilitate career progression, facilitate performance and reduce pay-related grievances and work stoppages
