Overview: The importance of compensation varies depending on the viewpoint, as described by Barry Gerhart and Jerry Newman in Compensation. Society views compensation as a measure of justice; managers may view compensation as a major expense or a motivator; employees view compensation as an entitlement or as an incentive. Regardless of the viewpoint, fairness and equity are essential. Compensation must also be up-to-date, competitive in the market, and easy to understand. Aligned pay structures support the way the work gets done, fit the organization’s business strategy, and are fair to employees. Organizations typically task an in- house human resource (HR) professional or hire an HR consultant to create and maintain the company’s pay structure. Prompt: Salary Surveys: To ensure the pay structure is externally competitive, a salary survey should be conducted, as stated by Lisa Burke in Designing a Pay Structure. For the results of a survey to be valid, the market pay data must be from a relevant labor market. Since most of the office support, HR, and operations jobs will be filled by regional candidates, local pay data should be gathered. A salary survey is developed by your team and sent to industry competitors. Descriptive data such as organization size, industry, annual revenue as well as compensation data for each of the benchmark jobs were collected. Surveys were completed and returned by six organizations that recruit and hire similar positions within a 90-mile radius of Rockville. Base pay data from the responding organizations are reflected in Appendix B of the Final Project Case Study. Organizations are referenced as companies A, B, C, D, E, and F for anonymity. Those who participated also received copies of the results for their contribution. In this assignment, you will address the external competitiveness component of a pay structure using the specifically designed case scenario. Read the Final Project Case Study (linked to in your course) for detailed information on the requirements for this project. Specifically, you must address the critical elements listed below.

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OL 325 Milestone Two Guidelines and Rubric

Overview: The importance of compensation varies depending on the viewpoint, as described by Barry Gerhart and Jerry Newman in Compensation. Society
views compensation as a measure of justice; managers may view compensation as a major expense or a motivator; employees view compensation as an
entitlement or as an incentive. Regardless of the viewpoint, fairness and equity are essential. Compensation must also be up-to-date, competitive in the market,
and easy to understand.

Aligned pay structures support the way the work gets done, fit the organization’s business strategy, and are fair to employees. Organizations typically task an in-
house human resource (HR) professional or hire an HR consultant to create and maintain the company’s pay structure.

Prompt: Salary Surveys: To ensure the pay structure is externally competitive, a salary survey should be conducted, as stated by Lisa Burke in Designing a
Pay Structure. For the results of a survey to be valid, the market pay data must be from a relevant labor market. Since most of the office support, HR, and
operations jobs will be filled by regional candidates, local pay data should be gathered.

A salary survey is developed by your team and sent to industry competitors. Descriptive data such as organization size, industry, annual revenue as well as
compensation data for each of the benchmark jobs were collected. Surveys were completed and returned by six organizations that recruit and hire similar
positions within a 90-mile radius of Rockville. Base pay data from the responding organizations are reflected in Appendix B of the Final Project Case Study.
Organizations are referenced as companies A, B, C, D, E, and F for anonymity. Those who participated also received copies of the results for their
contribution.

In this assignment, you will address the external competitiveness component of a pay structure using the specifically designed case scenario. Read the Final
Project Case Study (linked to in your course) for detailed information on the requirements for this project.

Specifically, you must address the critical elements listed below.

External Competitiveness:

A. Calculate the weighted means of base pay for each of the following benchmark jobs: administrative assistant, operations analyst, production worker,
and benefits manager from the six companies listed in Appendix B of the final project case study.

B. Calculate the predicted base pay for each of the following benchmark jobs: administrative assistant, operations analyst, production worker, and
benefits manager.

C. Create a market pay line using the following benchmark jobs: administrative assistant, operations analyst, production worker, and benefits manager.
Clearly label your job evaluation points and salaries.

D. Calculate the adjusted pay rates for each benchmark job based on your company’s decision to lead in base pay by 3%.
E. Create pay grades by combining 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.

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F. Create pay ranges including minimum and maximum for each of the pay grades based on pay grades created in item E above.

Rubric
Guidelines for Submission: Your final project will be a Word document, approximately 8–9 pages in length (plus a cover page and references) and must be
written in APA format. Your Word document may include Word tables, Word lists, Excel screenshots, and rationale in written paragraphs. Use double spacing, 12-
point Times New Roman font, and one-inch margins.

Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

External Competitiveness:
Weighted Means

Provides correct weighted means for
each benchmark job identified

Provides incorrect weighted means for
some of the benchmark jobs or
provides weighted means for all
benchmark jobs with consistent
computational errors

Does not provide weighted means for
benchmark jobs

15

External Competitiveness:
Predicted Base Pay

Provides correct predicted base pay for
each benchmark job identified

Provides incorrect predicted base pay
for some of the benchmark jobs or
provides predicted base pay for all
benchmark jobs with consistent
computational errors

Does not provide predicted base pay for
benchmark jobs

15

External Competitiveness:
Market Pay Line

Provides correct market pay line for
each benchmark job identified with
clear labeling of job evaluation points
and salaries

Provides incorrect market pay line for
some of the benchmark jobs or
provides market line but does not
clearly label job evaluation points and
salaries

Does not provide market pay line for
benchmark jobs and does not clearly
label job evaluation points and salaries

15

External Competitiveness:
Adjusted Pay Rates

Provides correct adjusted pay rates for
each benchmark job identified

Provides incorrect adjusted pay rates for
some of the benchmark jobs or
provides weighted means for all
benchmark jobs with consistent
computational errors

Does not provide adjusted pay rates for
benchmark jobs

15

External Competitiveness:
Pay Grades

Provides correct pay grades for
combined benchmark jobs, labels pay
grades incorrectly, and explains why
combined benchmark jobs form a grade

Provides incorrect pay grades for
combined benchmark jobs or labels pay
grades incorrectly or does not explain
why combined benchmark jobs form a
grade

Does not provide pay grades for
combined benchmark jobs, does not
label pay grades correctly, and does not
explain why combine benchmark jobs
form a grade

15

External Competitiveness:
Pay Ranges

Provides correct pay ranges for each pay
grade and provides rationale for pay
ranges

Provides incorrect pay ranges for some
pay grades or does not include rationale

Does not provide pay ranges for pay
grades and does not provide rationale

15

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Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

Articulation of Response Submission has no major errors related
to grammar, spelling, syntax,
organization, or citations

Submission has major errors related to
grammar, spelling, syntax, organization,
or citations that negatively impact
readability and articulation of main
ideas

Submission has critical errors related to
grammar, spelling, syntax, organization,
or citations that prevent understanding
of ideas

10

Total 100%