SalarySurveybasedonHayMethodHayPointRangeUpperQuartile(Q3)SalaryFormula200-300144.89*HP-1648301-400165.55*HP-7845401-500195.67*HP-19,893501-600176.16*HP-10,140601-700194.51*HP-21,145701-800168.63*HP-3029InternalequityExternalequityEmployeeequityAdministrationConceptsCompensationTechniquesPlanning,Budgeting,Monitoring,EvaluatingJobAnalysisJobDescriptionJobEvaluationJobGradesMarketDefinitionsSalarySurveysPolicyLinesPayStructuresSeniorityIncreasesPerformanceEvaluationIncreaseGuidelinesCompensationObjectivesRoleclarityandaccountability.Facilitatesadministrationandperformancemanagement.Competitivewagepoliciesandpractices.Influenceemployees’workattitudesandbehaviour.Attracttalents.Retaintalents.Motivateemployees.Complywithregulations.Consistencyinpolicyadministration.TheStrategicCompensationModelCompensationManagementThefundamentalsofsalaryadministrationSalaryadministrationisconcernedwithdecidinghowandwhatstaffshouldbepaidandwiththetechniquesandproceduresfordesigningandmaintainingsalarystructures,rewardingstaffandexercisingsalarycontrol.AimsOfSalaryAdministrationThebasicaimsofsalaryadministrationaretoattract,retainandmotivatestaffbydevelopingandmaintainingacompetitiveandequitablesalarystructure.Toensurethatasufficientnumberofsuitablestaffisattractedtojointheorganization;Toencouragesuitablestafftoremainwiththeorganization;Todevelopandmaintainalogicalsalarystructurewhichachievesequityinthepayforjobsofsimilarresponsibilityandconsistencyinthedifferentialsbetweenjobsinaccordancewiththeirrelativevalues;Toensurethatsalarylevelsmatchmarketrates;Tokeepthesalarylevelsadjustedinlinewithincreasesinthecostofliving;AimsOfSalaryAdministrationTomaintainconsistencyinmethodsusedtofixandreviewsalarylevelsanddifferentials;Toprovideforprogressionwithinthesalarystructureinaccordancewithperformanceandlevelofresponsibility;Tooperatethesalarysystemfairlyandconvincethestaffthatthesystemisfair;Tomaintainaflexiblesalarysystemwhichwillaccommodatechangesinthemarketratesfordifferentskillsandinthecompany’sorganizationstructure;Toachievesimplicityinoperationsasanaidtostaffunderstandingandtominimizeadministrativeeffort;Tooperateeffectivesystemsofcontrollingsalarycostsandtheadministrativeproceduresrequiredtoachievetheaboveaimsattheleastcosttotheorganization.ComponentsOfSalaryAdministrationThestartingpointofsalaryadministrationisthedeterminationofsalarylevelsbyjobevaluation.Thereafter,salaryadministrationisconcernedwith:Thedesignandmaintenanceofsalarystructures;Theoperationofsalaryprogressionsystems;Theadministrationandcontrolofsalaryreviews;Thedesignandoperationofbonusschemes;Theprovisionofemployeebenefitsandotherallowances;Thedevelopmentofatotalremunerationpolicy.CompensationToolsandTechniquesPayStructureSalaryStructurePerformanceRelatedPayMeritPaymentSchemeIncentiveSchemeBenefitPoliciesSalaryReviewGuidelinesCompa-ratioSalaryProblemsCriteriaforPayStructuresBeappropriatetotheneedsoftheorganization,intermsofits:-culture,sizeandthedegreeinwhichchangestakeplace-needforflexibility-typeandlevelofemployeestobecoveredBeflexibleinresponsetointernalandexternalpressures,especiallythoserelatedtomarketratesandskillshortages.Providescopeforrewardinghigh-flyerswhilestillprovidingappropriaterewardsforthemajorityofemployees.Ensurethatrewardsaregiveninlinewithperformancesandachievements.Provideabasisforcareerplanningwhichwillmotivateambitiousemployeeswithhighpotential.Facilitateconsistencyinthetreatmentofvaryinglevelsofresponsibilityandperformance.GradedSalaryStructuresAlljobsareallocatedintosalarygradewithinthestructureonthebasisofanassessmentoftheirinternalandexternalvaluetotheorganization.Eachsalarygradeconsistsofasalaryrangeorband.Thejobsallocatedtoasalarygradeareassumedtobebroadlyofthesamelevel–normallythesameminimumandmaximumrates,whichcorrespondwithgradeboundaries.GradedSalaryStructuresAtypicalgradedstructureconsistsofasequenceofsalarygradesorranges,eachofwhichhasadefinedminimumandmaximum.Itisassumedthatallthejobsallocatedintoagradearebroadlyofthesamevalue,althoughactualsalariesearnedbyindividualswilldependontheirperformanceorlengthofservice.Acrosstheboardcostoflivingormarketrateincreaseswillusuallyresultinanincreasetotheminimaandmaximaofeachgrade.Allthejobsinanorganizationmaybecoveredbythesamestructureofsalaryrangesortheremaybedifferentstructuresfordifferentlevelsorcategoriesofjobs.Make-upofaSalaryGradeAbasicprincipleofasalarystructureisthatindividualsadvancethroughthestructureeitherbyprogressingwithinthesalarygradeforthejobastheyimprovetheirperformance,orbypromotion.Inthesimpleststructure,peoplemovemoreorlesssteadilyfromtheentrypointofthegrade(withmightbeabovetheminimumiftheyhavealreadygainedrelevantexperienceelsewhereorwithinthefirm)totheupperlimit,unlesstheymovetoahighergrade.Itispossible,however,todistinguishthreestagesintowhichthisprogressionisdivided,andforsalaryadministrationpurposesitishelpfultodividethegradeintothreezoneswhichcorrespondtothesestages.SalaryStructure:RatioMethodJobGradesMinimumMidpointMaximum0600