George Raveling Views His Higher Salary As

In The Case Study George Raveling Views His Higher Salary As Justifia

In the case study, George Raveling views his higher salary as justifiable because he has alternative job offers; however, advocates of comparable worth argue that employers should not make compensation decisions based entirely on market considerations. Propose the method you would use, if you were the hiring manager, to determine the compensation an employee deserves. Suggest the key criteria you would consider when determining the worth of an employee, and justify your response.

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Determining appropriate employee compensation is a critical aspect of effective human resource management and organizational strategy. As a hiring manager, it is essential to implement a comprehensive and fair method for assessing an employee’s worth to ensure equitable pay, attract and retain talent, and minimize internal disparities that could lead to dissatisfaction or turnover. The approach combines both quantitative and qualitative criteria, balancing market factors with internal job evaluations and individual contributions.

One widely accepted method for determining compensation is a job-based evaluation system, often supplemented with market analysis. This approach involves systematically assessing the relative worth of jobs within the organization based on their responsibilities, required skills, complexity, and impact. The process begins with conducting a job analysis, which involves gathering detailed information about each role, including tasks performed, necessary skills and qualifications, and the scope of responsibilities. This information forms the basis for developing a job description and rating the job’s relative importance.

Afterward, a job evaluation technique, such as the point factor system, can be employed. The point factor method assigns numerical points to various job factors such as skill, effort, responsibility, and working conditions. Each factor is broken down into levels, with corresponding points reflecting the degree of each factor’s presence in a given role. Summing these points results in a job score, which ranks the position’s relative worth within the organization. This process provides an internally consistent and defensible basis for setting compensation levels.

Complementing internal job evaluations, market-based analysis is vital to ensure competitive pay. This involves benchmarking salaries against industry standards and geographic considerations by consulting salary surveys and compensation databases (Cascio & Boudreau, 2016). The market data helps establish a salary range, within which internal job evaluation scores are aligned to ensure external competitiveness. This dual approach minimizes the risk of overpaying or underpaying employees relative to the external labor market.

Key criteria I would consider when determining an employee's worth include the following:

1. Skills and Qualifications: The level of education, specialized training, certifications, and technical expertise directly influence an employee’s ability to perform the job effectively. Highly skilled individuals justify higher compensation, given their specialized knowledge (Milkovich et al., 2014).

2. Experience and Past Performance: Relevant experience and proven track record in similar roles demonstrate capability and reliability, thereby increasing an employee’s value (Werner & DeSimone, 2012). Past contributions, leadership, and problem-solving skills should also be considered.

3. Responsibility and Scope: The degree of responsibility, including supervision of others, decision-making authority, and the complexity of tasks, correlates with an employee’s contribution to organizational success. Positions with broader responsibilities typically command higher pay.

4. Market Conditions: Compensation trends within the industry and geographic region affect what the organization must offer to attract qualified candidates. Being competitive ensures access to top talent (Gerhart & Rynes, 2003).

5. Internal Equity: Ensuring fair pay across similar roles prevents resentment and enhances organizational cohesion. Employees with comparable responsibilities and skills should be compensated equitably.

6. Performance and Value Addition: An employee’s individual performance, innovation, and ability to add value to the organization can justify above-average compensation. High performers typically deserve higher rewards to motivate continued excellence (Cascio & Boudreau, 2016).

Justification for this multi-criteria approach lies in its fairness, transparency, and strategic alignment. Using job evaluation standards ensures internal consistency, making pay decisions defendable during audits or disputes. Market analysis anchors compensation levels to external realities, allowing the organization to attract and retain talent competitively. Considering individual performance and skills ensures that exceptional contributions are recognized, motivating continued high performance.

Furthermore, this comprehensive method aligns with the concept of equitable pay, balancing both equal treatment of similar roles and differentiation based on individual merit. It also reduces biases and subjective judgments, fostering a culture of fairness. Overall, combining job evaluation with market analysis and individual criteria ensures that compensation decisions are balanced, justified, and aligned with organizational goals.

In conclusion, as a hiring manager, employing a structured job evaluation framework complemented by external market benchmarks and individual performance considerations provides a balanced, fair, and strategic basis for determining employee compensation. Such a method ensures organizational competitiveness, fairness, and motivation, ultimately contributing to the organization’s success.

References

• Cascio, W. F., & Boudreau, J. W. (2016). Which HR practices influence performance? The International Journal of Human Resource Management, 27(9), 1234–1255.
• Gerhart, B., & Rynes, S. L. (2003). Compensation: Theory, Evidence, and Strategic Implications. Stanford University Press.
• Milkovich, G. T., Newman, J. M., & Gerhart, B. (2014). Compensation. McGraw-Hill Education.
• Werner, J. M., & DeSimone, R. L. (2012). Humanresource Management. Cengage Learning.