Jean Inc Scenario
You are a newly hired HR professional now working for Jeans Inc. Jeans does not have a formal wage structure or rate ranges and does not use compensable factors. Wages are basically set on prevailing wages in surrounding communities coupled with some attempt for internal equity among workers.
Jeans does not participate in formal pay surveys. Instead, the administrative assistant routinely looks over online job openings and conducts informal surveys among her friends in local organizations. Jeans has always followed a policy of paying employees about 10% above what the assistant determines are the prevailing rates. She thinks this reduces turnover and fosters employee loyalty. The practice is to pay men about 20% more than women for the same job. The assistant explains, “When we hire males, they have families, and they are stronger and can work harder for longer hours.”
Question 1 – Compare and contrast two job evaluation methods discussed in this module. Which method (if any) do you recommend for Jeans Inc.? Why
There are two methods of job evaluation. They
include analytical and non-analytical job evaluation methods. Non-analytical
method can comprise of job ranking, number of job evaluation methods that an
organization can use to create job ranking in an paired comparison and job
classification methods while analytical method include factor comparison, point
factor ranking. This paper compares paired comparison ranking non-analytical
job evaluation to factor comparison analytical job evaluation method. In the
paired comparison ranking, the jobs are compared with one another. In this case
the job evaluator tends to determine whether one job is less or more than the
other, and give points based on the answer. The summation of the points is done
and the ranking is done based on the point each job gets in total against the
others. A job higher in ranking then receives more pay compared to a job lower
in ranking. Factor comparison on the other hand involves breaking down a job in
terms of working conditions,, job, responsibility, hourly rate. A mandatory
value is assigned to each job based on the said aspects. This finally provides
a rank that should suit each job. The job compensation in the two methods is
based on the rank, with the higher ranked jobs getting more compared to the
lowly ranked jobs (Timeless TimeHR, 2014).
Between the two, I would recommend the use of factor
comparison method of job compensation in the Jeans Inc. Factor comparison is
recommendable because, the measures used to rank the job are quantifiable. One
can clearly give factual reasons as to why a certain job is ranked higher than
the other. Paired comparison does not clearly states aspects that would make
one job ranked higher than the other. A person with different opinion can also
give reasons to change the order. Thus, it is not consistent and the criteria
used in ranking are not quantifiable.
Question 1 – Should Jeans Inc. set up a formal salary structure based on a complete job evaluation? Why or why not?
I find the current informal salary structure quite
logical and manageable. Although it is not formalized the company ensures that
their payment system is slightly above the market value which makes it more
competitive in its local market. Nevertheless, the system fails in valuing the
workers as they should be valued based on the work they do, the skills needed,
effort put, and challenges experienced.
A formal pay structure does not only consider the external aspects that
influence job payment but also the individual job requirements that make it
unique (Course Videos 2015). This compensation system ensures fairness to workers and hence making
them to feel valued and appreciated. The system also makes it easy for the
company to make workers understand why they have different pays but having well
defined criteria for wage evaluation. Thus, other than surpassing the market
value, having a formal salary structure ensures every employee gets what she or
he truly deserve, an aspect that can assist in enhancing workers
Question 3 – Is the policy of paying 10% more than the prevailing rates a sound one? If so, how could it be determined? If not,
what do you recommend?
The policy of paying 10% more than the prevailing
market rates sounds logical to me. Assuming that the surrounding organizations
source workers from the surrounding, then adding 10% of the prevailing salary
makes the company more competitive in the market. The soundness of the policy can be
determines by evaluating the level of workers turnover in Jeans, Inc compared
to other surrounding organization. It can also be determined by evaluating the
kind of workers the company attracts in terms of skills, ability, and
experience compared to its surrounding competitors. High level of effectiveness
can be indicated by presence of the best workers in terms of skills and
performance in Jeans Inc.
Question 4 – What would you do now with respect to a pay plan process at Jeans Inc.? Why?
the new HR of the Jeans Inc., I would develop a new pay structure based on
formal job evaluation and to be specific using the factor comparison methods.
This will assist in determining which job is more valuable to the organization
and which is less valuable. The organization jobs will then be ranked from the
highest to the lowest. I will then start determining the salary range in each
job. In this case, other factors that include the market, government
regulations, and competitiveness in the market will be considered (Phillips
& Robinson, 2016). This will give the workers a chance to work hard to
increase their salary through adding experience, enhancing performance and
sticking to the company to acquire long stay salary increment. This will be
done to ensure that the company pays its workers as deserved as per their job
specifications and needs. It will also ensure that workers’ wages remain
competitive in the market despite their job rank in the organization. This will
make it the HR management easy. It will also make it easy for the organization
to determine the pay range of any other arising job as per its importance in
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