SHRM case: “Designing a Pay Structure”
You will prepare the SHRM case analysis on “Designing a Pay Structure,” which consists of your completion of Tasks A–J that simulate the creation of a compensation system for an organization in meeting its goals and supporting its mission. In your analysis, respond to the following tasks found in the case study by using Excel.
Your case analysis should consist of:
Task A: Use research to create a complete job description for the benefits manager position. Cite and reference your sources paraphrasing your sources.
Task B: Calculate the job evaluation points for the administrative assistant, payroll assistant, operational analyst, and benefits manager jobs. Provide a rationale for assigning specific degrees to the various jobs.
Task C: If there were any outliers (i.e., extreme data points) in the data, what would you recommend doing with them? From this point forward, assume no extreme data points exist in the dataset.
Task D: Conduct a simple regression in Excel to create a market pay line by entering the job evaluation points (on the X axis) and the respective weighted average market base pay (on the Y axis) for each benchmark job.
Task E: What is your R squared (variance explained)? Is it sufficient to proceed?
Task F: Calculate the predicted base pay for each benchmark job.
Task G: Because your company wants to lead in base pay by 3%, adjust the predicted pay rates to determine the base pay rate you will offer for each benchmark job.
Task H: Create pay grades by combining any benchmark jobs that are substantially comparable for pay purposes. Clearly label your pay grades and explain why you combined any benchmark jobs to form a grade.
Task I: Use your answer to Task H to determine the pay range (i.e., minimum and maximum) for each pay grade.
Task J: Given the pay structure you have generated, consider the following: Does this pay structure make good business sense? Do you think it is consistent with the organization’s business strategy? What are the implications of this pay structure for other HR systems, such as retention and recruiting?
Your analysis of this case and your written submission should reflect an understanding of the critical issues of the case, integrating the material covered in the text, and present concise and well-reasoned justifications for the stance that you take. You are to complete this case analysis using Excel in a spreadsheet analysis format.
You may discuss your case analysis assignment with the class, but you must submit your own original work.
Case analysis tips: Avoid common errors in case analyses, such as:
Focusing too heavily on minor issues.
Lamenting because of insufficient data in the case and ignoring creative alternatives.
Rehashing of case data — you should assume the reader knows the case.
Not appropriately evaluating the quality of the case's data.
Obscuring the quantitative analysis or making it difficult to understand.
Typical “minus (–)” grades result from submissions that:
Are late.
Are not well integrated and lack clarity.
Do not address timing issues.
Do not recognize the cost implications or are not practical.
Get carried away with personal biases and are not pertinent to the key issues.
Are not thoroughly proofread and corrected.
Sample Solution
SHRM Case Analysis: Designing a Pay Structure
This analysis simulates creating a compensation system for an organization using the SHRM case "Designing a Pay Structure." We'll utilize Excel to complete Tasks A-J, focusing on key aspects of job evaluation and pay structure design.
Important Note: While I can guide you through the process, I cannot complete the tasks in Excel for you. You'll need to perform the calculations and data entry yourself.
Task A: Job Description - Benefits Manager
Job Title: Benefits Manager
Department: Human Resources
Summary:
The Benefits Manager is responsible for overseeing all aspects of the company's employee benefit programs. This includes researching and selecting benefit providers, designing and administering benefit plans, communicating benefits information to employees, and ensuring compliance with relevant regulations.
Duties and Responsibilities:
- Conduct market research to identify and evaluate different benefit providers. (Source: Society for Human Resource Management: [invalid URL removed])
- Design and implement employee benefit plans, including health insurance, dental insurance, vision insurance, life insurance, retirement plans, and paid time off. (SHRM: [invalid URL removed])
- Develop and maintain clear and concise communication materials to explain benefit options to employees. (SHRM: [invalid URL removed])
- Administer benefit programs, including processing enrollments, claims adjudication, and resolving benefit-related issues. (SHRM: [invalid URL removed])
- Stay up-to-date on relevant laws and regulations governing employee benefits. (SHRM: [invalid URL removed])
- Maintain accurate records of employee benefits data. (SHRM: [invalid URL removed])
- Analyze benefit utilization data and recommend changes to benefit plans as needed. (SHRM: [invalid URL removed])
- Provide ongoing support and guidance to employees regarding their benefits. (SHRM: [invalid URL removed])
Qualifications:
- Bachelor's degree in Human Resources, Business Administration, or a related field. (Rationale: A bachelor's degree provides a strong foundation in HR principles and prepares the candidate for complex benefit program management.)
- Minimum 3-5 years of experience in employee benefits administration. (Rationale: Experience ensures familiarity with various benefit programs and their administration.)
- Certified Benefits Professional (CBP) or Certified Employee Benefits Specialist (CEBS) designation preferred. (Rationale: These certifications demonstrate expertise in employee benefits.)
- Strong analytical and problem-solving skills. (Rationale: Analyzing data and finding solutions to benefit-related issues are crucial.)
- Excellent communication and interpersonal skills. (Rationale: Effective communication is essential for explaining benefits to diverse employees and interacting with vendors.)
- Proficient in Microsoft Office Suite and benefits administration software. (Rationale: These tools are essential for data analysis, communication, and program administration.)
Task B: Job Evaluation Points
| Job Evaluation Factors | Administrative Assistant (Points) | Payroll Assistant (Points) | Operations Analyst (Points) | Benefits Manager (Points) |
|---|---|---|---|---|
| Education | High School Diploma (20) | Associate's Degree (30) | Bachelor's Degree (40) | Bachelor's Degree (40) |
| Experience | 1-3 years (10) | 3-5 years (15) | 5-7 years (20) | 3-5 years (15) |
| Job Knowledge | Basic office skills (10) | Payroll processing procedures (15) | Data analysis techniques (20) | Benefits regulations & programs (25) |
| Skills | Typing, filing, communication (15) | Data entry, accuracy, attention to detail (20) | Problem-solving, analytical skills (25) | Communication, negotiation, HR knowledge (30) |
| Supervision | Receives close supervision (5) | Receives moderate supervision (10) | Works independently (15) | Manages benefit vendors |