You will prepare the SHRM case analysis on “Designing a Pay Structure,” which consists of your completion of Tasks A–J that simulate the creation of a compensation system for an organization in meeting its goals and supporting its mission. In your analysis, respond to the following tasks found in the case study by using Excel.
Your case analysis should consist of:
- Task A: Create a complete job description for the benefits manager position using O*NET.
- Task B: Calculate the job evaluation points for the administrative assistant, payroll assistant, operational analyst, and benefits manager jobs. Provide a rationale for assigning specific degrees to the various jobs.
- Task C: If there were any outliers (i.e., extreme data points) in the data, what would you recommend doing with them? From this point forward, assume no extreme data points exist in the dataset.
- Task D: Conduct a simple regression in Excel to create a market pay line by entering the job evaluation points (on the X axis) and the respective weighted average market base pay (on the Y axis) for each benchmark job.
- Task E: What is your R squared (variance explained)? Is it sufficient to proceed?
- Task F: Calculate the predicted base pay for each benchmark job.
- Task G: Because your company wants to lead in base pay by 3%, adjust the predicted pay rates to determine the base pay rate you will offer for each benchmark job.
- Task H: Create pay grades by combining any benchmark jobs that are substantially comparable for pay purposes. Clearly label your pay grades and explain why you combined any benchmark jobs to form a grade.
- Task I: Use your answer to Task H to determine the pay range (i.e., minimum and maximum) for each pay grade.
- Task J: Given the pay structure you have generated, consider the following: Does this pay structure make good business sense? Do you think it is consistent with the organization’s business strategy? What are the implications of this pay structure for other HR systems, such as retention and recruiting?
- Your analysis of this case and your written submission should reflect an understanding of the critical issues of the case, integrating the material covered in the text, and present concise and well-reasoned justifications for the stance that you take. You are to complete this case analysis using Excel in a spreadsheet analysis format.
You may discuss your case analysis assignment with the class, but you must submit your own original work.
Case analysis tips: Avoid common errors in case analyses, such as:
- Focusing too heavily on minor issues.
- Lamenting because of insufficient data in the case and ignoring creative alternatives.
- Rehashing of case data — you should assume the reader knows the case.
- Not appropriately evaluating the quality of the case’s data.
- Obscuring the quantitative analysis or making it difficult to understand.