a. Outline a formal pay plan for your three employees using Dessler’s 5-step process. In Step 2, Job Evaluation, use the ranking method to evaluate compensable factors.

b. Describe the five (5) methods Dessler presents to perform a job evaluation, highlighting the advantages of each method.

Performance Management, Employee Retention, & Determining Pay Rates

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Performance Management, Employee Retention, & Determining Pay Rates

1. Pay Plan and Job Evaluation

Based on Dessler’s five steps processes, establishing a formal pay plan for the three employees requires, primarily, conducting salary surveys to benchmark market prices, establishing what other employees in external environments and organizations earn. The comparative survey of jobs helps ensure external equity and enables effective decision-making. According to the BLS, below are the results (BLS, 2020) .

Secondly, through job evaluation, establishing the monetary worth of each job in the organization should be conducted to establish and ensure internal equity. Evaluation and effective job comparison are attained through a job evaluation process, which systematically helps compare jobs to determine the worth of one job with another. When conducting a job evaluation, in this case, the ranking method provides for five main steps, including obtaining information on the posts, selecting and grouping the three jobs, selecting compensable factors, ranking the positions, and finally combining the used ratings (Dessler, 2013). The compensable factors used include skills, efforts required to perform tasks, responsibilities, working conditions, education and experience, task complexities, and level of supervision needed.

Once external and internal equity is realized, it is essential to group similar jobs into pay grades, which prompts the third step (Dessler, 2013). Margaret is categorized in the executive, Buzz, in the management, and Maureen in the administrative job group families. In the fourth step, the identified pay grades are priced using the wages curve, and finally, pay rates are fine-tuned. According to the ranking and compensable factors identified, Margaret will earn higher with $3,500 per month, while Buzz will be paid $2,500 per month, and finally, Maureen $1,250 per month.

1. Dessler’s Job Evaluation Methods 

Dessler describes five job evaluation methods, namely, ranking, job classification or grading method, point method, factor comparison, and banding method (Dessler, 2013). The ranking method is the simplest method involving comparing jobs with each other based on the overall worth of the jobs in an organization. This is the simplest and cheapest method to use, as it requires less time and minimal administration involvement (Dessler, 2013). A point method is a quantitative approach that identifies degrees of compensable factors in a job, awarding points to each degree, and calculating total point values. The technique is superior and widely integrated as it is compressive in evaluating all job rates and providing for minimum errors (Dessler, 2013). Job classification or grading method involves classifying jobs using compensable factors identified, ranking in order of importance, and assigning grades by their level of compensation factors. This method is less subjective, easy to comprehend, and comprehensive as it takes into account all elements of a job.

Factor comparison method ranks jobs according to compensable factors identified, a comparison is made based on total weights of these factors for each job to determine the pay. This method is systematic and quantitative, maximizing accuracy in the job evaluation process. It is reliable, flexible, and uses limited factors, thus minimizing possibilities of overlaps (Dessler, 2013). Finally, the banding method involves grouping jobs by their similar characteristics. The technique is easy and quick to apply, enables organizational flexibility, and requires minimal administrative involvement (Dessler, 2013).

References

BLS. (2020, March 31). May 2019 National Occupational Employment and Wage Estimates. Retrieved from USA Bureau of Labor Statistics: https://www.bls.gov/oes/current/oes_nat.htm#49-0000

Dessler, G. (2013). Human resource management. Upper Saddle River, NJ: Pearson Education, Inc.