SUPPLEMENTAL SOFTWARE DIRECTIONS PHASE II
Before you go to the computer….
If you have created more than one job structure in Phase I, you will want to analyze the market for each structure separately. It will help if you have handy the “picture” of your structure that you created in Phase I, including the JE points or skill level for each job.
Read the survey job descriptions on pp. 58-60 before deciding on appropriate benchmarks. Use this information to decide which survey jobs match which FastCat jobs. For example, is FastCat’s Administrative Aide a good match for Office Support 1, or Office Support 2, or Office Support 3, or none of the above? Write down your potential job matches and discuss them with your teammates. NOTE: Not all survey jobs have a match at FastCat, and not all FastCat jobs have a match in the survey. If you match almost every FastCat job, you will have adopted a “market pricing” approach. Is that what you recommended in Phase I?
Look at the company descriptions on p. 60 prior to deciding on appropriate competitors. Decide what companies you want to include in each analysis. For example, do you want only software companies, or only small companies? Do you want the same (or different) companies for each job structure? Write down some preliminary decisions on which companies to use. NOTE: Both survey job matches and the company selections are easy to change. Just be sure to write down what you are looking at in each analysis so that you can include in your report what you tried and what you learned with each analysis.
You will want to do multiple analyses so that you are familiar not only with the pay levels at the companies in your survey but also with their pay mix. Do most of your competitors offer bonuses? To whom? This is the kind of information you can learn from the Salary Data reports in the software. Write down some potential analyses and why they will be useful. You can easily add to this list at the computer. But if you think about this ahead of time, you will have a better sense of what to do when you actually use the software. Be sure to use your analysis in the discussion in your report.
Try out several compensation metrics (see Exhibit 16 p. 50) so that you can get a more complete picture of pay practices at FastCat’s competitors.
Grades and Ranges Before you go on, be sure you understand your regression results and what they mean. Pages 51-53 in Cases in Compensation will help you.
Start the next part of the software by re-examining your Phase I results and look at how you might group jobs. Look for breaks in the work flow. Make some preliminary decisions on how many grades for each structure, and which jobs are in which grade. Remember that the grades will be drawn on the graphs based on JE points. So if you have 4 jobs with JE points 25, 40, 60 and 80, and you feel there is a break between the jobs at 40 and 60 JE points, you might start your first grade at 20 JE points and end it at 50 JE points. Look at the Phase I job descriptions and the work flow to guide you on how to group the jobs. Put in a percentage for the range, i.e., the percentage above and below the grade midpoint that will set the upper and lower wage for jobs in that grade.
Bands and Zones. Zones serve as reference rates, and are discussed in the Milkovich/Newman text Compensation on pp. 244-247. You can choose bands and zones as alternative to grades and ranges. For each band, one or more zone is possible. You must specify (a) the size of the band (in JE points and percentage, just as with grades), (b) the number of zones in each band, and (c) the point where you want the zone drawn (entered as JE point location), and (d) the zone minimums and maximums (entered as dollars).
Your decision for where to draw any zones (item c) inside the band is simply based on aesthetics. For example, if you have a band that runs from 20 to 50 JE points with 2 zones in it, you might put the zones at 25 and 40 points. It will make no difference to your results. It merely tells the computer where to draw the line for the zone.
After you enter the information for your first band, immediately move to the right of the screen to enter the information for the zones. You MUST have at least one zone per band. If you forget to do this, move your cursor back to the line where you entered the information for the first band. The cells for entering zones for that band will reappear.
Note that if you do use bands, you will also need to enter the dollar amounts for the minimum and maximum of each zone (item d in the above list). This information allows the computer to draw the zones. The zone should lie completely within its band.
The software program takes some time to draw the grades or bands. Be patient. You can use the “Copy to Clipboard” button to copy and paste the graphs into your report or to another file (Word or Excel) for further study and comparison.
You may also wish to Export either the salary data or the grades & ranges/bands & zones data to an Excel file to study it further or include it in a report. Here’s how:
To export a report:
- On the screen that shows the report you wish to export, go to the drop-down menu under File and click on Export.
- Name the resulting file and choose a location, then change the “save as type” box to an Excel file (not an Access file). Click on “Export All”
- Open the file, change the formatting to suit you, e.g., drop/resize columns, change size or color, relabel columns.
The resulting file can be pasted into your report if you wish.