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Job
Grades
&
Salary
RangesCompa-ratios(CR)acompa-ratio(comparativeratio)isameasureoftheextentwhichtheaveragesalariesinagradedeviatefromthetargetsalary.itisusedtocompareactualaverageswiththetargetsalarytoindicatetheextentwhichsalarylevelsarehighorlow.theformulaforcalculatingacompa-ratiois:Averageofallsalariesinthegrade-------------------------------------------------------------------------------------------------------------------------------------------------------------x--
100Midpointofthesalaryrangeacompa-ratioof100indicatesthattheaveragesalaryisalignedtothemidpointofthesalarygradeandnocorrectivestepsneedtobetaken.Compa-ratios(CR)acompa-ratioof80wouldindicateaneedtoinvestigatewhyaveragesalarieswerelowandpossiblynolongercompetitive.acompa-ratioof120wouldsuggesteithertherewerealotoflong-servicestafforthatstaffwerebeingoverpaid,andthatincreasesneededtobemodified.compa-ratioanalysiscanrevealasituationwhereearningsdrifthastakenplace.CompetitivePosture(CP)CompetitivePostureisameasureofhowcompetitivethesalaryiswithrespecttoagivenmarketbenchmark.CompetitivePosturecanbeusedtomeasurethecompetitivenessofbothcompan’ys’orindividua’sl’salarycompetitivenessinthemar
ketCompetitivePostureforacompanyiscomputedas:CR=AverageofallSalariesinagivenJobGradeMarketBenchmarkSalaryCompetitivePostureforanindividualiscomputedby:CR=SalaryoftheindividualEmployeeMarketBenchmarkSalarySalaryAdministrationMinimumSalaryPoints
1.Minimumsalaryforthegrade2.MinimumforJobInthemarket3.Setcompa-ratioat1.004.Overlapbetween60%to80%5.Avoidleapfroggingtendencies6.AllowforrealisticminimumSalaryAdministrationMaximumSalary
PointsMaximum
salary
for
the
gradeMaximum
for
job
in
themarketKeepsalary
rangeshort
(8
-12
years)Maxmin
ratiobetween1.5to
2.0Setcompa-ratio
at
1.00Allowforrealistic
maximumSalary
AdministrationMinimumMinimum
salary
for
the
gradeMinimum
for
Job
In
the
marketSetcompa-ratio
at
1.00Overlap
between
60%
to
80%Avoidleapfrogging
tendenciesAllowforrealistic
minimumMaximumMaximum
salary
for
the
gradeMaximum
for
job
in
themarketKeepsalary
rangeshort
(8
-12
years)Maxmin
ratiobetween1.5to
2.0Setcompa-ratio
at
1.00Allowforrealistic
maximumMinimumAndMaximumPointsStreamliningofSalary
Ranges
(Executives)Effective
1January1995*Mosttypicalvalue
corresponds
to
the
working
midpoint
of
therange@
Derived
from
annual
base
salary#
Dispersionfactorof
+/
-25%around
Q1
valuesJobReference
LevelsThereference
job description
preparedto
assistnon-hay
evaluatedcompanies
with
jobmatching,areeachevaluatedandqualityassuredagainstHay’sstandards.Theevaluationsarethen
slotted
intothe
relevantjobunitrange
whichforms
thereferencelevels.Thesereferencelevelsandcorresponding
job
unitranges
are
now
standard
throughoutallHay’smainremuneration
surveys
and
aredetailed
below.JobReference
LevelsSalary
AdministrationDeterminingEntry
Salary1.Market
value2.Candidate'sexistingsalary3.Basic
qualifications4.Additional
qualifications5.Relevantworkingexperience6.Relatedworkingexperience7.Completion
of
national
service8.Geographicallocation
ofcompany9.Nature
of
industry
(dirty
orhazardous)10.Minimumsalaryforjobgrade11.Salaries
ofexisting
incumbents12.Re-grossingannualsalaryIncrementalSystemsIncrementalsystemsvaryfrom
rigidprocedureswithfixed
and
predeterminedmovements
throughascale
related
toage,
serviceinthecompanyorservicein
the
job,toflexiblesystemswhere
managementexercisescompletediscretion
overtheaward
and
size
ofincrementswithoutanyguidelines.Betweenthetwoextremes
thereis
amiddleground
of
semi-flexiblesystems.Fixed
scaleswith
automaticprogressionwhereindividuals
move
through
jobsor
gradesbypredetermined
stepsrelatedtoageorservice,thesecould
berate
for
age
scales.Fixedscales
are
criticized
because
they
do
not
giveenough
incentiveto
effort
and
the
improvementofperformance-promotion
mightonlybeanawardinthelongerterm,
ifatall.They
are
defended
becausetheycanbe
operatedwithcomplete
impartiality-manypeople,especiallycivilservants,questionthepossibilityofdetermininga
fairrelationshipbetweenmerit
and
rewardwhere
theonlymethod
of
measurementisthesubjectiveopinionof
someone’sboss.Incremental
SystemsFixed
scales
with
limited
flexibilitywhere
it
ispossibleto
givedoubleor
even
triple
increments
tohighflyersand
withhold
increments
forpoorperformers.Semi-
fixed
scaleswhich
allowautomaticprogression
to
a
‘merit
ba’ra’
t
whichprogression
for
some
people
maystop
while
othercanadvance
at
differentratesaccording
toperformance.Fixed
parallelscaleswhich
allow
for
the
exerciseofmore
managerial
discretion
by
providing
differentpatternsof
incrementalprogression
for
differentlevels
of
performance,as
shown
in
figure10.Incremental
SystemsVariable
progressionwith
guidelineswhere
there
areno
fixed
incremental
points,
butmanagers
are
givenmore
or
less
mandatoryinstructions
on
how
theyshould
exercise
their
discretion.Theminimumguidelines
inthis
system
nay
consistofthe
annual increments
thatcan
beawardedfordifferentlevelsof
performance.
These
may
beextended
inmore
rigid
systems
togive
theproportionof
staff
who
should
receiveagivenincrement.Variable
progressionin
range
without
guidelineswhere
management
discretionintheaward
of
increments
and
thedeterminationoftheir
sizetends
to
be
restricted
onlybythemaximumof
thesalaryrangeand
thebudgettheyare
allowed
forsalaryincreases.Incremental
SystemsAnnualIncrementFixed
increment
systemFixed$Fixed%Variable
increment
systemFixedvariableFixedPlus
(merit
increment)Flexible
increment
system-
Fixedcomponent
+
flexiblecomponentMatrixsystem-
Salary
quadrant
vs.performance
matrixSalaryProgression
CurveIncrement
vs
Performance
MatrixMarketValue
ComputationSalaryReviewGuidelinesOverallcost
guidelines
in
which
a
budget
ofx%
of
payroll
is
imposedformeritreviews.This
is
the
essential
guideline,
and
managersmay
be
left
to
distribute
thepool
asthey
please,orsubject
tovariousdegrees
of
control.Guidelines
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