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Internal Alignment

This document discusses internal alignment and compensation management strategies within an organization. It provides examples of Lockheed Martin's engineering job structure and pay levels. It describes how internal pay structures are determined based on factors like job analysis, skills, responsibilities, and qualifications. Different options for designing internal pay structures are outlined, including tailored versus loosely coupled, egalitarian versus hierarchical, and tournament theory approaches. The consequences of various compensation structures on efficiency, fairness, and compliance are also covered.

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Prashant Singh
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336 views

Internal Alignment

This document discusses internal alignment and compensation management strategies within an organization. It provides examples of Lockheed Martin's engineering job structure and pay levels. It describes how internal pay structures are determined based on factors like job analysis, skills, responsibilities, and qualifications. Different options for designing internal pay structures are outlined, including tailored versus loosely coupled, egalitarian versus hierarchical, and tournament theory approaches. The consequences of various compensation structures on efficiency, fairness, and compliance are also covered.

Uploaded by

Prashant Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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COMPENSATION MANAGEMENT

INTERNAL ALIGNMENT

GROUP MEMBERS
Abhijeet Singh - 1 Girish Kamath - 14 Prashant Singh - 30 Darshan Sawant - 56 Tanaji Survase - 58 Mansi Bhopatker - 57

DEFINATION

Internal Alignment often termed as Internal Equity refers to the pay relationships bettween the jobs/skills/competencies within a single organisation.

ENGINEERING JOB STRUCTURE AT LOCKHEED


Engineering Limited use of Basic Principles..close supervision Senior Engineer Full use of standard principles and concepts. Under General Supervision. Systems Engineer Wide Application of principles and concepts plus working Under knowledge of other related Disciplines.

CONTD
Lead Engineer Applies extensive knowledge as a genralist or a specialistExcercises wide lattitude. Advisor Engineer Applies advanced principles,theories and conceptsself initiated. Consultant Engineer Exceptional Degree of inggenuity ,creativity & resourcefullness.

PAY STRUCTURE
It refers to the array of pay rates for different work or skills within a single organisation.The Number of levels,differntials in pay bettween the levels and the criteria used to determine those differences create the structure.

INTERNAL CONSISTANCY
Internal Pay Structure Engineer ($40,000) Senior Engineer ($58,500) Systems Engineer ($73,000) Lead Engineer ($93,000) Advisor Engineer ($120,000) Consultant Engineer ($162,000)

WHAT SHAPES INTERNAL STRUCTURES ?

ILLUSTRATION OF INTERNAL LABOUR MARKET


HIRE PROMOTE

PROMOTE

PROMOTE

PROMOTE HIRE PROMOTE HIRE

STRATERGIC CHOICES IN DESIGNING INTERNAL STRUCTURES


Tailored versus Loosely Coupled Egalitarian versus Hierarchical Equity Theory Tournament Theory : Motivation and Performance Institutional Model : Copy Others

CHOCIES AMONG STRUCURED OPTIONS

WHICH STRUCTURE HAS THE GREAEST IMPACT ON PERFORMANCE ? ON FAIRNESS ?

STRATERGIC CHOICE

Consquences of Internally Alligned Structure

CONSEQUESNCES OF STRUCTURES

Efficiency Fairness Compliance

DEFINATION
Job Analysis is a systematic investigation of tasks,duties & responsiblities necessary to do a job. Job analysis is a process of collecting job related information.

OBJECTIVE OF JOB ANALYSIS

PROCESS OF JOB ANALYSIS

TYPES OF JOB ANALYSIS INFORMATION


Work Activities Machines,Tools Equipments and Work Aids Used Personal Requirment Job Context

Outcomes of Job Analysis


The information obtained from job analysis is classified into three categories Job description Job specification Job evaluation

Job Description
A job description is a written statement of the duties, responsibilities, required qualifications and reporting relationships of a particular job. The job description is based on objective information obtained through job analysis. Job description acts as an important resource for Describing the job to potential candidates Guiding new hired employees in what they are specifically expected to do Providing a point of comparison in appraising whether the actual duties align with the stated duties

Job specification
Job Specifications Specify The Minimum acceptable qualificationsrequired by the individual to perform the task efficiently. Based on the information obtained from the job analysis procedures, job specification identifies the qualifications, appropriate skills, knowledge, and abilities and experienced required to perform the job. Job specification is an important tool in the selection process as it keeps the attention of the selector of the necessary qualifications required.

Job Evaluation
Job evaluation provides the relative value of each job in the organization. It is an important tool to determine compensation administration.
If an organization is to have an equitable compensation program, jobs that have similar demands on terms of skills, education and other characteristics should be placed in the common compensation groups.

Methods of Collecting Job Analysis Data


Observation Performing the Job. Critical Incidents Interview Individual & Group Dairy Method Questionnaire Structured,Unstructured

Methods of collection Job description data


Diary/log books Observation Interview Questionnaire: Structured Unstructured

Which method to use ?


Factors to be considered before choosing the method of collecting data are: No. of job/employees to be considered. Time Limit Which method to use ? Cost factors Education levels of incumbents Type of data required

Questionnaires
Unstructured format is more useful when: Questions are open ended. Questions that probing Questionnaires The number of incumbents is less Roles are unclear

Which questionnaire to use ?


An optimum combination of structured as well as unstructured questions can lead to the best questionnaire. A questionnaire is the best alternative to interviewing a large number of employees. It is much more cost effective.

WAYS TO CREATE INTERNAL STRUCTURE

Skill Based Structure


Skill Based structure link pay to depth or breadth of the skills, ability or knowledge a person acquires that is relevant to work. In contrast a job based plan pays employees for the job which they are assigned to regardless of the skills they posses.

Types of skill Plans

Specialist : In depth Generalist/Multi Skill Based : Breadth

Purpose of Skill Based structure

Support Work Flow Fair to Employes Directs behaviour towards organisation objectives

SKILL ANALYSIS
Skill Analysis is a systematic process to identify and collect information about skills required to perform work in an organisation.

HOW IS SBP DIFFERENT FROM JBP ?


Skills or skill units rather than job are compensable. Mastery of skill units is measured and certified Pay changes do not necessarily accompany job changes There is little emphasis on seniority in pay determination.

Why Use a Skill Based Pay system ?


Encourage employe flexiblity Reinforce High involvement organisation design Support compensation stratgies in ways that hold down costs

EFFECTS OF A SKILL BASED SYSTEM


Higher Productivity Lower costs High quality Lower staffing levels Lower absenteeism Lower turnover

DISADVANTAGES OF A SKILL BASED SYSTEM


Average pay of employee likely higer SBP systems more complex SBP systems require a major investment in training

Purpose of competensy Based System

Support Work flow Fair to employes Directs Behaviour towards organisation objectives

DISADVANTAGES OF A SKILL BASED SYSTEM


Average pay of employee likely higher SBP systems more complex SBP systems require a major investment in training

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