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Section 2: External Competitiveness
Section 2
shifts your focus outside of the firm to understand its relationship with the
external marketplace. You will use market survey data to compare pay
rates of
positions inside the firm with those in the marketplace to establish the
foundations of market-competitive pay. The analysis of market data also leads
you to the
determination of appropriate pay-policy mixes for each of its job structures.
In this Section 2: External Competitiveness
Section 2 shifts
your focus outside of the firm to understand its relationship with the external
marketplace. You will use market survey data to compare pay
rates of
positions inside the firm with those in the marketplace to establish the
foundations of market-competitive pay. The analysis of market data also leads
you to the
determination of appropriate pay-policy mixes for each of its job structures.
In this section, you are asked to use CompAnalysis software developed by
Howard Weiss at
Temple University, which is also available in MyManagementLab.
In Section 2 of
this simulation, you will shift your focus from concentrating on e-sonic’s
internal consistency to its external competitiveness. First, you will be
introduced to
the tools compensation professionals use to allocate total compensation most
effectively within job structures. Many employees are unaware that
their total
compensation consists of much more than just base pay. Compensation
professionals allocate total pay (for example, base pay, benefits, and different
types of
incentives) to motivate employees in different ways. You will use some of these
tools to develop pay policy mixes for each e-sonic job structure. Next,
you will
consider pay policy level decisions for each job structure.
You will then
use CompAnalysis (the included software program) to conduct an external market
survey. Specific instructions provided with the software program
will guide you
through the steps involved in the compensation survey exercise. Finally, you
will report survey findings, interpreting regression analysis results
generated by
the software, and provide an explanation of major decisions reached.
IMPORTANT:
Users of the CompAnalysis software must set the macros to a low level in order
for the software to work. If the macros are set on too high of a
security level,
then the software will be disabled and not work properly. In order to do this,
navigate to the "Tools" menu, click "Macros", then
"Security". Lower
the security
level, save the spreadsheet, close it completely, and then re-open.
Section 2
Outline:
Executive
Summary Findings
1. Determine
Appropriate Pay-Policy Mix
2. Pay-Policy
Level Decisions
3. Compensation
Survey
a) Choose
competitors based upon industry, size, and union status.
b) Select
benchmark jobs for each structure using benchmark job descriptions.
c) Reconcile
differences using the benchmark job comparison sheet.
d) Update
salary data for inflation using CPI-U.
4.
Implementation of Salary Survey Results
a) Report and
interpret results of regression analysis for each job.
b) Integrate
external and internal structures by creating pay grades and ranges.
c) Evaluate and
summarize decisions made for each job structure.
The External
Competitiveness section is fully described in the MyManagementLab Building
Strategic Compensation Systems casebook for faculty and students,
linked in the
course menu. Follow the explanations and outline to complete this milestone.
Section 2: External Marketplace is due at the end of Module Six.
Section 2: External Competitiveness
Student’s Name
Institutional Affiliation
Section 2: External Competitiveness
Summary
This summary aims to determine the use of market data
analysis to identify effective pay methods that can attract and retain valued
work teams. First, it identified a compelling pay-policy mix based on benefits
and incentives of job structures at E-Sonic. Second, it determined the
suitability of merit and seniority-based remuneration on the organization.
Third, it conducted a compensation survey through identifying competitors,
establishing and reconciling benchmark jobs. Additionally, it found that
remuneration pay and grades. Finally, findings of this market analysis allowed
E-Sonic to identify strategies that will improve its external competitiveness.
Determine
Appropriate Pay-policy Mix
Employers provide fair compensation by utilizing
systematic components that determine the suitable pay structure for different
occupations. According to Perry, Engbers, and Jun (2017), pay-policy systems
use different elements, including identifying organizational productivity and
focusing on how rival enterprises disburse their salaries. Torre, Pelagatti,
and Solari (2015) revealed that wages impact levels of morale and job
satisfaction; for that reason, pay-policy mix influences decision-making
processes within an organization. All evidence clearly states that appropriate
salary arrangements let firms attract and retain work teams, improving
competitiveness. Not only do systematic components identify factors that
determine pay-policy but also establishes types of compensation.
To augment its market position, E-Sonic should provide
its employees with intrinsic rewards to ensure that they are satisfied and
motivated to face new challenges. Torre et al. (2015) concluded that intrinsic
compensation lets employees prioritize their gratification, leading them to
identify and pursue channels that are important for company growth. Perry et
al. (2017) opined that through regular communication with a workforce, firms
determine payment rewards that will motivate their employees. Therefore, implementing
intrinsic compensation strategies will enable E-Sonic to create an effective
job structure and sustainable work surrounding, underlining the value of
workers. Besides, intrinsic rewards are not the only compensation tools but
also the allocation of prizes.
An organization effectively distributes salaries by
rewarding its highly productive departments that improve its market
competitiveness. Nyberg, Pieper, and Trevor (2016) determined that attraction
and retention of qualified work teams should be a priority for an employer.
According to Perry et al. (2017), through setting high compensation levels,
organizations manage market forces that affect their industrial position.
E-Sonic has remained competitive because of its high production levels as a
result of its administrative, advertisement, and marketing departments, for
that reason, it should reward employees in these divisions significantly.
Through this compensation system, the company will effectively maximize its
employees' efforts and motivation.
Pay-Policy
Level Decisions
Pay-policy mixes influence decision-making processes; for example, they enable managers to determine whether E-Sonic should use a merit or seniority payment structure. According to Nyberg et al. (2016), rewarding employees as a result of their productivity creates competition, spurring output levels. Torre et al. (2015) established that this type of compensation is disadvantageous, as it is quite expensive for a company to examine each job structure due to differences in performance metrics. Nonetheless, merit-based payment lets organizations promote workers' excellence through comparing their performance levels. Apart from pay-policies allowing E-Sonic to understand benefits of merit-based payment, it will also...
