Section 2 shifts your focus outside of the firm to understand its relationship with the external marketplace.
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.
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 Comp Analysis (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.
strategic_analysis_for_sonic_records (1)
Answer preview Section 2 shifts your focus outside of the firm to understand its relationship with the external marketplace.
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