Mandate Pay Scale Analysis Assignment | Online Assignment

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Mandate Pay Scale

A pay scale, also referred to as a salary structure, refers to a system that establishes how much workers should be paid as a salary or wage, in regards to one or several factors such as the level of the employee, status or rank within the organization, the period that the worker has been employed, and the challenging nature of the work being undertaken. Some of the examples of the pay scale are comprised of the uniformed services pay grades of the US, the pay scale that is being used by the military personnel of the US and the General Schedule, which is the pay scale in which the US uses for the personnel in the white-collar civil service jobs. Private employers make use of pay scale associated with grades such as maximums, midpoints, and minimum in defining the available pay ranges to the workers in each grade. Even though certain employers have disputed the use of pay scale as an administrative burden, and being rigid, it should nevertheless be noted that all people should have a mandated pay scale because it ensures consistency, flexibility, competitive analysis, budgeting, internal alignment, and market benchmarking.

All people should have a mandated pay scale to ensure consistency. A mandated pay scale provides organizations with a kind of system through which employees consistently get paid for the work they have undertaken for a particular position in the company. The pay scale usually facilitates for differences in experience, education, and performance (Davis). Nevertheless, workers in the same type of job understand that their earnings are relatively the same as their coworkers. This, in turn, assists in the elimination of internal anger and conflict from the workers who might feel slighted in the organizations that lack a pay scale.

Also, having a mandated pay scale is significant in creating flexibility in an organization. Flexibility is one of the fundamental reasons a company should advocate for having a pay scale instead of a single set pay. This provides the organization with the opportunity of offering a little more money as a way of getting a worker with an excellent background. In the same manner, it facilitates the company to have the potential of realizing saving on the cost of labor during the hiring process, particularly with workers with less background (BCJobs.ca.).

At the same time, a pay scale would be recommended for budgeting purposes. The ability of budgeting for the cost of labor in an effective manner is significant in this regard. The human resource department in a company would have the capability of undertaking an analysis of different jobs at each pay scale and consequently come up with a reasonable approximation for the entire cost of labor by the organization, department, and job (Culpepper and Associates). This is important as organizational leaders would be able to assess the present labor about the requirement and anticipate the future needs for particular tasks. It should also be put into account that labor is one of the most expensive constituents of carrying out a business.

Moreover, mandating a pay scale plays a significant role as far as competitive analysis is concerned. Apart from enhancing internal consistency and equity, a pay scale provides organizations with an increased ability to compare with the other competing companies. Human resource professionals can gather resources or visit the websites of their competitors to compare the ranges of salaries. This is much more realistic when compared to assessing payment when it is customized for every employee or individual job. Therefore, a company can increase its minimum or maximum pay as a way of attracting better talent if it finds its pay scale is below its competitors (Coooney).

Besides, all people should have a mandated pay scale to facilitate decisions about internal alignment. When an organization establishes its pay scale, it will be using market data as a guideline for deciding which job falls to a given pay scale. Human resource validates job placement into a given pay scale with their understanding of the internal job alignment within their companies (Coooney). For example, if the accountant positions in an organization are valued at a similar level to that of HR generalist, and at the same time is having the same scope, for example, both being individual contributors, then the organization might want to make sure that those kinds of jobs are in the same level in the company. In some instances, data concerning the scope and market would illustrate that the two jobs are in different grades, but the organization may prefer them to be placed in the same grade for reasons of internal equity. Hence, it will be the choice of the human resource professionals to adjust appropriately. Pay scale facilitates companies in balancing the desire to being competitive externally and the objective of ensuring internal alignment (Coooney).

Lastly, ensuring all people have a mandated pay scale would facilitate job placements that lack market benchmark. Accounting for jobs that do not have benchmark data is a fundamental reason that a company would adopt a mandated pay scale for everyone. World at Work, a global association for HRM business leaders and professionals, suggested that ensuring not less than 70% of the positions in the company to have benchmark data is the best practice associated with benchmarking (Davis). It is also illustrated at PayScale, a compensation data and software company that assists employers in the management of the compensation of employees and knowing their worth concerning the job market, that most of the clients can utilize market data in benchmarking around 85 to 90% of their job positions (Davis). This means that some positions are still left without a comparable market position.

However, individuals who are opposed to all people having a mandated pay scale assert that it is an administrative burden. This is because an organization would require someone to get involved in the development of a pay scale and form an alignment of the present jobs and the workers to the scale. They also argue that a person would be required to monitor the market and organizational pay continuously to ensure consistent sensibility of the pay scale (BCJobs.ca.). At a minimum, the pay scale would require an annual evaluation to establish whether the individual jobs or grades require to be adjusted and by how much because of increases in the labor costs. Some work thus would be needed due to the consistent attention required yearly. At the same time, such individuals against the pay scale claim the rigidity of such a system, mainly when used in the high-tech industries or those particular industries requiring high talent (BCJobs.ca.). In such cases, they outline that a pay scale would be a challenge to recruitment and retention. This is because the pay is always moving upwards and at a much faster rate compared to the typically updated salary structures in such fast-moving sectors. Therefore, they conclude that a pay scale would be quite restrictive if the managers and recruiters lack the flexibility of making an additional payment to attract and retain fundamental talent.

However, it should be noted that with an adequate adjustment to the pay scale, the pay structure should not be a burden, and the high-tech companies would be able to still attract and retain crucial talent. Despite the burden experienced with its administration, it is still much easier to administer pay scale than the individual ranges. Even though it is essential to acknowledge that each job has a different pay scale for job-based ranges, it is crucial to understand that the difference in one range and the other could be minimal, and even inconsiderable. Therefore, taking all the individual ranges in the grade-based ranges and categorizing them into grades would be much easier to track and administer (BCJobs.ca.). Also, high-tech companies can exploit the application of attractive bonuses on top of the pay scale for positions requiring talent attraction and retention.

In conclusion, consistency, budgeting, flexibility, competitive analysis, benchmarking, and internal alignment are the fundamental reasons why all people should have a mandated pay scale. Even though there are challenges that could be associated with this kind of pay structure, such as being burdensome and inappropriate for high tech industries, the reasons for adopting this system still significantly outweigh the justification of not embracing it. In essence, the proper application of a pay scale eliminates the requirement of having market data for every single position in an organization.

Works Cited

BCJobs.ca. “Why Fair Salary Structures is Important | BCJobs.ca.” Blog, 11 Oct. 2019, www.bcjobs.ca/blog/why-creating-fair-salary-structures-is-important-for-your-organization/. Accessed 14 Apr. 2020.

Coooney, Samanth. “Should You Share Your Salary With Co-Workers? Here’s What Experts Say.” Time, 14 Aug. 2018, time.com/5353848/salary-pay-transparency-work/. Accessed 14 Apr. 2020.

Culpepper and Associates. “Salary Structures: Creating Competitive and Equitable Pay Levels.” SHRM, 11 Apr. 2018, www.shrm.org/resourcesandtools/hr-topics/compensation/pages/salarystructures.aspx. Accessed 14 Apr. 2020.

Davis, Paul. “What an Effective Salary Structure Can Do.” Helios HR | HR Outsourcing, Consulting & Recruiting, 26 May 2017, www.helioshr.com/2017/05/the-impact-of-having-an-effective-salary-structure/. Accessed 14 Apr. 2020.