Developing a Pay Plan Using Dessler’s 5-Step Process

Outlining A Formal Pay Plan For Three Employees Using Dessler’s 5-Step Process

Imagine that you have a 3-employee office/apartment management company. They have all asked for increases in base pay. Maureen, 42, is a part-time business contracts manager and secretary; she gets $2200 a month. Buzz, 28, oversees building maintenance and rentals for the 4-story family-owned business office directly above your office. He also manages nine apartment buildings within the area. He gets $4,750 a month. Margaret, 36, handles legal matters and has responsibility for resolving all escalated tenant complaints as well as evictions. She earns $6,400 a month. Respond to the following. (30 points) (A 2-page response is required.)

  1. 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.
  2. Describe the five (5) methods Dessler presents to perform a job evaluation, highlighting the advantages of each method.

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A Formal Pay Plan Developed Using Dessler’s 5-Step Process

First Step: Job Analysis

Prior to developing a formal pay plan, Fulmer et al. (2023) note that it is essential to carry out a comprehensive work analysis to have a clear understanding of the duties and obligations of each employee. Such analysis will aid in identifying significant employment characteristics that influence compensation evaluations.

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Second Step: Job Evaluation

During this step, we will employ the ranking technique to assess the compensable features associated with each position. The compensable factors taken into account working conditions, skills, effort, experience and responsibility. 

Maureen– Is a part-time business contract manager and secretary

Factors for compensation will comprise:

Working conditions: The work environment is primarily in an office setting, and Maureen has the benefit of flexible working hours.

Skills: Knowledgeable in commercial contract management and secretarial work at an intermediate level.

Effort: A commitment that requires a part-time dedication.

Experience: Over a decade of experience in comparable positions required.

Responsibility: Oversees commercial agreements, does administrative duties, assists with office functions.


  1. Margaret
  • Buzz
  • Maureen

Buzz- Is the manager for building maintenance and rental manager.

Factors for compensation will include:

Experience: Possess an average level of proficiency in property management.

Effort: Requires a dedicated and continuous effort, involving strenuous physical work

Responsibility: Oversees the maintenance of buildings, administers rental properties, handles staff members, and responds to tenant inquiries.

Working conditions: Engaging in both office and field work, which may involve exposure to a range of weather conditions.

Skills: Proficient in customer service, rental management and building maintenance.


  1. Margaret
  • Buzz
  • Maureen

Margaret- Specializes in legal affairs and resolving tenant complaints.

Factors for Compensation:

Skills: Proficiency in legal matters, excellent at resolving conflicts, a solid understanding of tenant laws.

Experience: Vast knowledge and proficiency in legal affairs and the resolution of tenant disputes.

Responsibility: Engages in litigation, resolves escalated grievances from tenants, oversees the process of evicting tenants.

Effort: Specializing in legal issues requires a full-time dedication and involves a high level of stress.

Working Conditions: Work setting includes an office environment with regular appearances in court.


  1. Margaret
  2. Buzz
  3. Maureen

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Third Step: Pay Survey

Perform a salary survey to collect information on remuneration rates for comparable roles within the sector and specific geographic location. The results of the survey will offer valuable information about current market trends and assist in determining appropriate and competitive compensation rates (Fulmer et al., 2023).

Fourth Step: Pay Structure

Apply job assessments and pay survey data to create a pay structure that is in line with market rates, taking into account the business’s financial situation and objectives. Establish wage ranges for each position to guarantee equity and uniformity.

Maureen: $2500 – $3000 per month

Buzz: $5000 – $6000 per month

Margaret: $6500 – $7500 per month

Fifth Step: Administering and Monitoring the Pay System

Arnold et al. (2023) recommends that we consistently evaluate and revise the compensation system to ensure competitiveness in the market and retain high-performing employees. Supervise to assess employee performance, and regularly review salaries to address any inconsistencies or revisions in work duties.

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Five Methods of Job Evaluation by Dessler

Ranking Method

As per Siraj & Putranto (2019), the ranking method offers several advantages, including its simplicity, ease of comprehension, and uncomplicated application. It offers an in-depth understanding of the job structure within the firm.

Classification Approach

The classification approach involves the categorization of jobs into set grades or classes, using previously established standards. It provides consistency in job categorization and simplifies the organizational hierarchy.

Point Method

The point method is a technique that allocates points to different characteristics, including competence, effort, responsibility, and working environment. It offers a methodical and numerical approach to job appraisal, allowing for accurate differentiation between different jobs.

Factor Comparison Method

The factor comparison method is a technique employed to assess occupations by comparing important characteristics such as skill level, level of effort required, level of responsibility, and working circumstances (Siraj & Putranto 2019). It provides adaptability in assessing specific job characteristics and can handle alterations in job responsibilities over time.

Market Pricing Method

The market pricing method is based on leveraging external market data to establish work worth and compensation rates. It guarantees conformity with industry norms and aids in attracting and maintaining skilled individuals in a fiercely competitive market.

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