Is There a Maximum Rate of Pay?
You are the Total Rewards Manager for Front Appliance Company. You are usually a pretty relaxed, friendly, and easy-going manager. Although you are a no-nonsense, competent executive, you are one of the most popular managers in the company. This particular morning, however, you feel a challenge ahead.
As chair of Front’s job evaluation committee, you called a late-morning meeting at which several jobs were to be considered for re-evaluation. The jobs had already been rated and assigned to Pay Grade 4. But the Office Manager, Ortho Janson, was upset that one of his employees was not rated higher. To press the issue, Ortho had taken his case to two executives who were members of the job evaluation committee. The two executives (Production Manager Peter Strong and Marketing Manager Margo Arms) then requested that the job ratings be reviewed. Peter and Margo supported Ortho’s side of the dispute, and you are not looking forward to the confrontation that is almost certain to occur.
The controversial job is that of receptionist. Only one receptionist position exists at Front Appliances, and Rebecca Reichart held it. Rebecca has been with the firm 14 years, longer than any of the committee members. She is extremely efficient, and virtually all the executives in the company, including the president, have noticed and commented on her outstanding work. Peter and Margo are particularly pleased with Rebecca because of the cordial manner in which she greets and accommodates Front’s customers and vendors, who frequently visit the plant. They feel that Rebecca projects a positive image of the company.
Continue in the meeting and lead the discussion, in a conversational tone as if Rebecca were also in the room.
1.Explain to the group why you insist that the job, not the person, be evaluated.
2.Share with the others whether or not you think there should be a maximum rate of pay for every job in an organization, regardless of how well the job is being performed. Justify your response.
3.Rebecca is earning the maximum of the range for her pay grade. Discuss ways an employee at the top of his/her pay range might be able to obtain a salary increase. Be specific and give good examples that Rebecca might also be able to apply easily to her situation.
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.”
Answer the following four questions below. Use question-and-answer (Q&A) format; in other words, include the original question along with your response. Within your answer, support your responses with information from at least 2 reputable sources (library and/or Web-based), and provide the full citation at the end. Use APA format for your references. Share your own personal experiences, readings, and research, where applicable.
1. Compare and contrast two job evaluation methods discussed in this module. Which method (if any) do you recommend for Jeans Inc.? Why?
2. Should Jeans Inc. set up a formal salary structure based on a complete job evaluation? Why or why not?
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?
4. What would you do now with respect to a pay plan process at Jeans Inc.? Why?