Pricing Managerial and Professional Jobs

POWER POINT PRESENTATION POWER POINT PRESENTATION

CHALLENGERSCHALLENGERS

KAVIYARASU. CKUPPUSAMY. PSRINIVASULUVENUGOPALSRAVANI

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Compensating Managers Compensating Professional

Employees

The basic aims of the plan is to attract good employees and maintain their commitment. The basic methods of job evaluation- classifying jobs, ranking them, or assigning points to them. For Managerial and professional jobs, job evaluation provides answer to the question of how to pay the employees. There is also tendency to pay managers and professionals based on ability-based on their performances.

Basic compensation elements Managerial job evaluation

There are five elements in a manager’s There are five elements in a manager’s compensation package:compensation package:

Salary Salary Benefits Benefits Short-term incentivesShort-term incentivesLong-term incentivesLong-term incentivesperquisitesperquisites

Salary is cornerstone of executive compensation. Managers are paid depends on the value of the person’s work to the organization. It is on this elements that the others are layered, with benefits incentives and perquisites normal awarded some proportion to the manager’s base pay.

Benefit is the Indirect financial payments given to employee. They may include the off with pay, health care, employee services, survivor’s protection, life insurance, vacation, pension, education plans, retirement coverage and company products for instance.

Plans are that are designed to motivate short-term performance of managers and are tide to company profitability. Short-term incentives are designed managers for attaining short-term goals.

Types of three basic issues :• Eligibility•Fund-size determination•Individual awards.

Long term-incentives most often reserved for senior executives. Long-Term Incentives aimed at rewarding the person for long-term performance. In terms of increase market share and the like.

Types of Capital accumulation programs:

• Stock options • Stock appreciation rights• Performance achievement plans • Restricted stock plans• Phantom stock plans• Book value plans

Begin where benefits leave off and are usually given to only a select few executives based on organizational level and past performance perks include use of company cars, yachts, and executive dining rooms.

The executive compensation tends to emphasize incentives than do other employees pay plans since organizational results are little to reflect contributions of executives more directly than those of low echelon employees.

The level of executive responsibility as measured by total assets, total corporate profits . This is not an important variable in terminating executive compensation. That there are rational, acceptable and abiding principles that govern the total cash compensation of top executive in manufacturing firms.

The basic approach used by most large companies to ensure some degree of equity among various divisions and departments is to classify all executive and management positions into a series of grades, to which a series of salary ranges is attached.

Methods of managerial job evaluation:

• Ranking method• Classification method• Point method• Factor comparison method

Ranking method: 1. The various jobs in an enterprise will

be ranked in the order of their importance , responsibility and duties involved for the purpose of employees

Eg: The job of junior clerk may be compared with senior clerk

2. This method is unsuitable if the jobs to be compared are totally unrelated to dissimilar.

Eg: The job of machine workers and that department manager cannot be ranked.

Classification Method: In this case the various jobs in an organization are classified under certain catagories

Eg: In Banks there are clerks, probationary officers & Managers.

Point Method:In the case of the point method the requirement of the each job in terms of educational qualification, experience desired, physical requirements, duties and responsibilities involved in the first identified.

The job evaluation process begins with securing information about jobs.

Failure to secure complete job facts has been cited as a primary reason for job evaluation failure.

Information about jobs is obtained through a process called job analysis.

The goal of this process is to secure whatever job data are needed.

As with non managerial jobs, one alternative is to rank the executive and management positions in relation to each other, grouping those of equal value. The job classification and point evaluation methods are also used, with compensable factors like position scope, complexity, difficulty, and creative demands.

Compensating non supervisory employees like engineers and scientists presents unique problems. Analytical jobs put a heavy premium on creativity and problem solving, compensable factors not easily compared or measured.

The compensable factors here tend to focus on problem solving, creativity, job scope, and technical knowledge and expertise. Both the point method and factor comparison methods have been used, although the job classification method seems most popular.

It is simply not possible to identify factors and degrees of factors which meaningfully differentiate among the values of professional work.

“Knowledge and the skill of applying it,” as one expert notes, “are extremely difficult to quantity and measure.

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