Essay Example on Creating an Equitable Payment Plan: Dessler's Five-Step Process

Introduction

I will use Dessler's five-step pay process to create a payment plan that will ensure internal-external and procedural equity. The steps as outlined by Dessler include:

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Step 1: Conducting a salary survey- I will conduct an informal salary survey which will involve making phone calls to other business people involved in the same line of business as I am and also do online research. Comparing the current wages, I am paying my employees with the prevailing market wages will enable me to create an elaborate pay plan to reward my employees. The general market rates for contract managers and secretaries is approximately $2500 a month, that of apartment managers and caretaker is $5000 a month, and that of legal consultants is $7000 a month (Chapter-11 Establishing Strategic Pay Plans, 2020). Therefore, I will have to adjust their base pay based on the results of my salary survey.

Step 2: Job evaluation- I will use the five-step job ranking approach to determine the relative worth of each of the jobs of my three employees. I will use compensable factors such as job qualifications, the effort required, working conditions, skill requirements, among other considerations. The five-step job ranking technique of job evaluation involves obtaining information regarding the specific jobs, selection, and grouping of jobs, identification of compensable factors, ranking the jobs, and combining the ratings obtained from the evaluation (White, 2016). Maureen's and buzz's job requirements, responsibilities, and effort requirements place their jobs on the same pay group. However, there are several compensable factors that place buzz's pay rate slightly higher than that of Maureen. Margaret's job requires higher qualifications, is more demanding, and requires more professionalism. Therefore, in my payment plan, she will be in a job group that will be paid slightly higher than her colleagues.

Step 3: Grouping jobs into pay grades. I will classify the jobs of my employees based on their complexity and importance, as determined in the previous step of job evaluation.

Step 4: Pricing each pay grade using a wage curve. A wage curve shows the pay rates for each of the pay grades using points or rankings established through other methods of job evaluation.

Step 5: Fine tuning the pay rates. This is done by comparing the established pay rates with other factors, such as the organizational budget.

Dessler's Five Methods of Job Evaluation

Job classification- this method involves categorization of jobs into groups that have relatively the same worth. The advantage of this method is that it is easier and less time-consuming.

The point method involves the identification of compensable factors and the identification of the degree to which these factors occur in a particular job (Pawar, 2018). The advantage of this method of job evaluation is that it considers all the factors that impact on the ability of employees to discharge their duties. This also enables organizations to create specific pay plans for individual employees.

Factor comparison is a fine-tuned form of the ranking method. Its main advantage is that its results are more reliable and accurate than those of the ranking method.

The computerized method uses a statistical approach or a structured questionnaire approach that is administered automatically to determine how much a job is worth. It is fast and cheap.

References

Chapter-11 Establishing Strategic Pay Plans. (2020). Retrieved 23 April 2020, from http://szhang7.github.io/human%20resource%20management/2013/04/19/11-establishing-strategic-pay-plans/

Pawar, R. B. (2018). Study on Human Resource Development and Management. The research journal of social sciences, 9(8), 318-322.

White, G. (2016). Reward management. Edward Elgar Publishing Limited.