Assignment: Compensation Structure Exercise
1. Using the O-Net database write down the 5 essential Knowledge areas, Skills, and Abilities for the following occupations: 1) Accountant, 2) Bookkeeping, Accounting, and Auditing Clerk and 3) Treasurers and Controllers (3 very commonly used benchmark jobs for designing a compensation structure for the financial area of a company). Note there will be significant overlap between the 3 occupations, so you should have significantly fewer than 15 factors in each KSA dataset.
2. Continuing with the O-Net database find the average of the occupation's Importance and Level score for each of the Knowledge areas, Skills, and Abilities on your list from #1.
3. Using the following information calculate the Job Evaluation score for each occupation.
The company wishes to give a bonus 200 points to jobs where the bachelor's degree is the most common education level and a bonus 400 points to jobs where the master's degree is the most common education level. They also want to use a weighted system with a 20% bonus for the following compensable factors:
Economics and Accounting Knowledge
Administration and Management Knowledge
Critical Thinking
Judgement and Decision Making
Complex Problem Solving
Mathematical Reasoning
Deductive Reasoning
Inductive Reasoning
4. The company wishes to use a low-cost strategy and lag the market by setting internal mid-point salaries at the 40th percentile level when compared to market data using the East-Central Illinois compensation survey data. Using the information from the O-Net determine the company's salary mid-point for the three occupations.
5. The company also wants to have a salary spread of +/- 15% from the midpoint for each occupation to recognize the work of individual employee's in the occupation. Determine the salary range for each occupation.
6. Prepare a graphical chart with the market and company pay line, salary ranges, and job evaluation scores for each occupation. This should look similar the chart we went over in class and in your text.
7. How and when might you use linear regression in setting up a compensation structure?
8. Feel free to contact me if you have any questions. Note there may be a brief open-note quiz over the data you've obtained/calculated.