Expert answer:Compensation Management
Answer & Explanation:Please show the calculations in your answers.
1. A company’s pay-grade for a
Systems Analyst has a minimum of $78,000 and a maximum of $105,000. John works
as a systems analyst and is paid a salary of $98,000. He received a job offer
from a competitor which pays $115,000.
a.
What is the scale midpoint for the above paygrade? What is the range? What is
the compa ratio for the employee?
b. Considering the
counter-offer received by John, what should the company do now to retain him?
What effects, if any, it will have on the pay structure of the company? Should
the company expand the pay-grade or deal with John’s issue in other ways? What
other ways would you suggest?
2. As the Compensation Manager
for a company, you are evaluating the company’s pay raise policies. You have
gathered the following data about the consumer price index (CPI) for your
metropolitan area:
Base Year: 1984 = 100.00
2014 = 138.70
2015 = 141.20
The average clerical wages in
your company (that is, the average salary of all the clerical employees working
in your firm in that particular metropolitan location) are as follows:
1984 = $18,000,
2014 = $25,000
2015= $26,200.
Many of your employees have
complained that the wages have not increased in real terms and they are worse
off than they were before. Has real wages increased or decreased? What
rationale would you advocate to the employees? Based on the CPI trends, if you
have to make adjustments to the wages, how much increase (or decrease) would
you recommend?
3. Based on the salary data
given in question 2 above, how much will be the contribution of this company to
Social Security (employer contribution only), Medicare, and unemployment
insurance? Show your calculations.
4. Assume that you are the
Chairman of the Board of Director for a company. You have to hire a new CEO for
your company that manufactures domestic appliances such as washers, dryers,
microwave ovens, cooking ranges, and refrigerators. You need to decide on the
pay package for the CEOs. Your company has had some problems in retaining CEOs
and many top managers as competitors have been grabbing your key executives.
Discuss how you would go about deciding on the compensation package for the
CEO. That is, what approach would you take to decide on the base salary, pay
policy for the CEO, mix of various incentives, etc.
compensation_management.docx
compensation_management.docx
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Please show the calculations in your answers.
1. A company’s pay-grade for a Systems Analyst has a minimum of $78,000 and a maximum of $105,000.
John works as a systems analyst and is paid a salary of $98,000. He received a job offer from a competitor
which pays $115,000.
a. What is the scale midpoint for the above paygrade? What is the range? What is the compa ratio for the
employee?
b. Considering the counter-offer received by John, what should the company do now to retain him? What
effects, if any, it will have on the pay structure of the company? Should the company expand the paygrade or deal with John’s issue in other ways? What other ways would you suggest?
2. As the Compensation Manager for a company, you are evaluating the company’s pay raise policies.
You have gathered the following data about the consumer price index (CPI) for your metropolitan area:
Base Year: 1984 = 100.00
2014 = 138.70
2015 = 141.20
The average clerical wages in your company (that is, the average salary of all the clerical employees
working in your firm in that particular metropolitan location) are as follows:
1984 = $18,000,
2014 = $25,000
2015= $26,200.
Many of your employees have complained that the wages have not increased in real terms and they are
worse off than they were before. Has real wages increased or decreased? What rationale would you
advocate to the employees? Based on the CPI trends, if you have to make adjustments to the wages, how
much increase (or decrease) would you recommend?
3. Based on the salary data given in question 2 above, how much will be the contribution of this company
to Social Security (employer contribution only), Medicare, and unemployment insurance? Show your
calculations.
4. Assume that you are the Chairman of the Board of Director for a company. You have to hire a new CEO
for your company that manufactures domestic appliances such as washers, dryers, microwave ovens,
cooking ranges, and refrigerators. You need to decide on the pay package for the CEOs. Your company
has had some problems in retaining CEOs and many top managers as competitors have been grabbing
your key executives. Discuss how you would go about deciding on the compensation package for the
CEO. That is, what approach would you take to decide on the base salary, pay policy for the CEO, mix of
various incentives, etc.
…
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