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Ang Interv PrepHR > Comp Ang notes > Flashcards

Comp Ang notes Flashcards

1
Q

Pay @ 50th =

A

50% of companies pay more 4 job & 50% pay less

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2
Q

How 2 determine pay range (process)

A

Level of Role
Job Description
Look @ Radford survey
Hiring in geolocation
(some ee’s @ top range)
Budget (also comp strategy such as pay @50th)

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3
Q

Employees (ees) unhappy

A

MIght be unhappy w/ their pay BUT
> unhappy because don’t understand process.

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4
Q

Comp range thought of as

A

Measurement of Employee’s proficiency in the role. If @ midpoint, you are FULLY proficient. Hire someone w/ some skills on job description as unchecked w/ proficiency. Then they will gain those skills.

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5
Q

Example w/ 2% merit budget increases

A

If ranges are 30-40%, person will be stuck & never going to make it thru your range (going to b stuck & will start looking 4 new job). Top performers will get 2% & not be competitive w/ market.

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6
Q

Employers who pay @ 75%

A

Sometimes have toxic environments

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7
Q

PAY Transparency has multiple definitions (not black & white/it’s a spectrum)

A

Many different definitions:
1. Clearly communicating total compensation
2. Disclosing all salary ranges
3. Disclosing exact salary of every role

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8
Q

Most conservative pay transparency

A

= What is required by law.
(vs disclosing to some external (states that require & only some internal or disclosing to all). Must think about balance when deciding on strategy.

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9
Q

Variable Comp trend

A

Companies are incorporating more variable pay components like bonuses & incentives tied to individual or team performance

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10
Q

5 main Comp laws

A
  1. FLSA
  2. Equal Pay Act
  3. NLRA
    4.Civil Rights Act
  4. Sherman Anti-Trust Act
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11
Q

Fair Labor Standards Act

A

flsa has 3 main provisions:
a. Minimum Wage
b. Overtime
c. Child Labor

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12
Q

Equal Pay Act

A

*and Pay Equity Laws

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13
Q

Equal Pay Act

A

Federal & state aimed at abolishing wage disparity

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14
Q

NLRA

A

Protects the rights of ‘private’ sector ees to join together to improve their wages & working conditions
*can’t stop ees from talking about their wages

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15
Q

Civil Rights Act

A

Compensation law of 60s to stop
Pay Discrimination

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16
Q

Sherman Anti-Trust Act

A

1st Federal Act that outlawed monopolistic business practices
*basically so orgs don’t all tell each other what they’re paying to create ANTICOMPETITIVE to deprive workers of $

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17
Q

Employers can defend Pay Equity decisions based on

A

Geography, work location, work conditions, seniority, performance, knowledge, skills, responsibility….

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18
Q

2 TYPES of COMP job analysis/evaluation

A
  1. Market Driven
  2. Job Worth
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19
Q

Market Driven (type of comp analysis/eval)

A

Looking at salary surveys, what competitors are paying, reflecting on what the outside world pays a position

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20
Q

Job-Worth (type of comp analysis/eval)

A

worth is looking at INTERNAL!
*what people inside your org are paid w similar skills/abilities

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21
Q

Most clients look at

A

Market-driven system OVER Job-Worth

22
Q

MARKET-DRIVEN SYSTEM

A

1.”going-rate” for a job
2. quality of external comparisons is CRITICAL
3. data may not be avail 4 all jobs (so “Slotting”)
4. variability of YOY wages
5. Does not always reflect internal equity

23
Q

Job Worth

A

may use point system
*points 4 knowledge

24
Q

Job Worth

A
25
Q

comp method of

A

Job Ranking to come up w/ Pay–presenter had never heard of someone using this–HAHAHA

26
Q

Market-driven is more

A

prevalent in FOR-PROFIT
AND becoming more common for non-4-profit

27
Q

HIgher Ed

A

uses Point Factor

28
Q

Sources/Types of Salary Surveys

A
  1. Government (BLS–some data available)
  2. Subscription Data (3rd party) *Most uses this or #3
    (Radford, Mercer)
  3. Custom Surveys (conducted by sponsoring co)
    we want to know what these 25 companies pay
    *as long as generic, no issues sherman anti-trust
  4. Online self-reported (aka Crowd sourced)
    *better than nothing but not recommended
29
Q

Selecting Salary Surveys

A

Use reliable, relevant, & credible market data in benchmarking comp programs

30
Q

Selecting Salary Surveys

A
  1. coverage of comparable orgs
  2. comparable jobs & Sample Size
  3. Timing of publication
  4. direct/indirect costs
  5. measurement of relevant components
  6. reliability (data validation)
31
Q

Surveys report Statistics

A

be aware:
MEASURES OF CENTRAL TENDENCY:
*Mean–simple average across all co/ees
*Weighted mean-the average weighted by # of incumbents
MEASURES OF DISPERSION
*Median-also known as 50th percentile (MOST orgs want to be around the 50th %)

32
Q

If you choose Mean

A

then don’t START using %
DON’T mix average in if you already chose mean

33
Q

company presenting uses

A

Median (%). Usually 50th percentile

34
Q

When matching your jobs to survey salary #s

A

Make sure you have at LEAST 70% job description OVERLAP

35
Q

When matching your jobs to survey salary #s

A

*RECEPTIONIST Example (some only answer phones while some have office, invoicing duties)
*looking for AT LEAST 70% match

36
Q

COLA does NOT = Cost of Labor

A

Cost of Living = measures required costs to maintain standard of living (goods, services, transportation, housing, healthcare, taxes)

Cost of Labor = determined by SUPPLY & DEMAND of labor across all industries/occupations 4 given location:
*represents cost to hire/retain local ees
*reflects labor market’s pay practices 4 location

37
Q

Pay Structure Types:

A
  1. Pay Ranges (most common & C-suite often not included)
  2. Step System
  3. Pay for Skills
38
Q
  1. Pay Ranges (most common)
A

minimum, midpoint & maximum

39
Q
  1. Step System (gov’t, unions
A

*Move thru the structure based on tenure
*Set increase between steps

40
Q
  1. Pay for Skills (as u learn more, you get paid more)
A
  • pay is based on each ee’s skills
  • certification of skills required
41
Q

COMPA-RATIO =

A

Actual Salary
_____________
divided by
______________
Midpoint of Grade

42
Q

Pay factors for Range

A

*time in job
*experience b4 joining
*education
*job performance
*company’s financial performance
*salary increase budget
*external economic environment
*position in range

43
Q

Make sure you are documenting pay practice methods

A

Policies 4:
-base pay position to market
-pay mix
-total cash (base & bonus)
-ees under minimum of pay range (and policy for over max)
-merit increases
-pay placement

44
Q

Make sure you are documenting pay practice methods

A

*Consistently apply comp principles
*maintain confidentiality when addressing ee comp issues

45
Q

Step 1: Determine the Organization’s Compensation Philosophy

A

Step 2: Conduct a Job Analysis

46
Q

Step 3: Group into Job Families

A

Step 4: Rank Positions Using a Job Evaluation Method

47
Q

Step 5: Conduct Market Research

A

Step 6: Create Job Grades

48
Q

Step 7: Create a Salary Range Based on Research

A

Step 8: Determine How to Deal with Salaries Not Within Range

49
Q

Step 9: Updating and Aging

A

Aging is the activity of increasing salary grades with the market without the cost of purchasing new salary

50
Q

Step 9: Updating and Aging (EXAMPLES OF HOW TO AGE):

A
  1. Employment Cost Index (ECI). The ECI is a component of the National Compensation Survey, which is produced by the BLS.
  2. Use the annual Cost of Living Adjustment, published each year by the Social Security Administration
51
Q

Phil
JAnal
fam
Rank (points: education 10-50 ex, work conditions, skill)
Research
Grades
Range
WhatNotRange
Age

A

Philosophy
Job Analysis
Family (job family)
Rank (points: education 10-50 ex, work conditions, skill)
Research
Grades
Range
What w/ Not in Range
Age

Ang Interv PrepHR (11 decks)

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