HRMT220 Regent University Designing Pay Levels & Pay Structures Discussion

Read the Burger Boy case at the end of Chapter 9 and answer the questions in your initial post using the chapter reading and two (2) other sources from the web or the Regent University databases. Be sure to integrate Christian worldview and scripture that discusses the author’s thoughts on pay-for-performance and skill level into your answer.

– 200-300 words

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This weeks study ——————————————-

Designing Pay Levels, Mix, and Pay Structures

This week focuses on the major decisions and techniques involved in determining an organization’s external competitiveness policy – establishing pay levels and pay mix forms and designing pay structures. Most organizations survey other employers’ pay practices to determine the rates competitors pay. Based on the survey results, an employer considers how it wishes to position its total compensation in the market: lead, match, or lag its competitors. This policy decision may differ for different business units and even for different job groups within a single organization. An organization’s competitive position policy is translated into practice by setting pay-policy lines which serve as reference points around which pay grades and ranges or bands are designed.We’ll also discuss the issues associated with combining the internal structure (job evaluation results) with external market rates.

Pay for Performance: The Evidence

We’ll end the week by looking at how to design a pay system to reward individual employees according to their value to an organization. Finally, people are introduced into the pay equation! The premise is that different people performing the same job may add different value to an organization. Stated another way – how much should one employee be paid relative to another when they both hold the same jobs in an organization? Thus, entering people into the compensation equation greatly complicates the compensation process. People do not behave like robots. The text argues that organizational success ultimately depends on human behavior. Thus, compensation decisions and practices should be designed to increase the likelihood that employees will behave in ways that help an organization achieve its strategy and strategic objectives.


By the end of this week, students will be able to:

  • Identify, explain, and discuss reward/compensation systems issues relevant to a specific case, and integrate appropriate biblical principles and Christian worldview.
  • Define, recall, and identify terms and concepts associated with external competitiveness, equity, pay-level determination, job families, total compensation, “dead money”, market and job evaluation data, organization strategy, motivation triangle, organization design, incentives, pay systems, competency indicators, pay structure, quoted-price, FLSA, labor supply curve, fuzzy market, culture and pay systems, and motivation.

Newman, J.M., Gerhart, B., & Milkovich, G.T. (2017) Compensation, 12th Edition. New York: McGraw-Hill Education. (ISBN: 978-1-259-53272-6)

Read: Milkovich & Newman, Chapters 8-9

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