Relationship between compensable factorsUse the article for essay,.Dessler, G. (2015). Human resource management. (14th ed.) Upper Saddle River, NJ: Pearson.Contemporary Topics in CompensationHow employers pay employees is evolving. In this final section, we’ll look at six importantcontemporary compensation topics: competency-based pay, broadbanding, talent management,comparable worth, board oversight of executive pay, and total rewards.Competency-Based PaySome managers question whether job evaluations that slot jobs into narrow cubbyholes(“Machinist I,” “Machinist II,” and so on) might not actually be counterproductive. For example,high-performance work systems depend on flexible multiskilled job assignments and on teamwork,and there’s no place here for employees to say “That’s not my job.”Competency-based pay (and broadbanding, explained later) aims to avoid that problem.90With competency- generally skill or knowledge-based pay, you pay the employee for the skillsand knowledge he or she is capable of using rather than for the responsibilities or title of the jobcurrently held.91 Experts variously call this competence-, knowledge-, or skill-based pay. Withcompetency-based pay, an employee in a class I job who could (but may not have to at the moment)do class II work gets paid as a class II worker, not a class I. Competencies are demonstrablepersonal characteristics such as knowledge, skills, and personal behaviors such as leadership.Why pay employees based on the skill levels they achieve, rather than based on the jobs they’re????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????to get and to use the skills required to rotate among jobs.In practice, competency-based pay usually comes down to pay for knowledge or skill basedpay.92 Most such pay programs generally contain five elements. The employer defines specificrequired skills and chooses a method for basing the person’s pay on his or her skills. A trainingsystem lets employees acquire skills. There is a formal competency testing system. And, the workis designed so that employees can easily move among jobs of varying skill levels. As an example,review Chapter 4’s Figure 4-12 on page 114. For this job, BP lists the minimum level for eachskill (such as Technical Expertise and Problem Solving) someone holding this job must attain.As an employee achieves each level of each skill, he or she would receive a bump in pay. Theaccompanying JLG program feature shows another example.A recent survey found that only about 12% use what they call skill-based pay and 13% usecompetency-based pay.93 In challenging economic times, perhaps the efficiencies of job evaluation.2. Employers use two basic approaches to setting payrates: market-based approaches and job evaluationmethods. Many firms, particularly smaller ones, simplyuse a market-based approach. Job evaluation methodsinvolve assigning values to each of the company’s jobs.This helps to produce a pay plan in which each job’spay is equitable based on its value to the employer.• Job evaluation is a systematic comparison done inorder to determine the worth of one job relative toanother based on compensable factors.• Compensable factors refer to compensable elementsof a job such as skills and efforts.• Popular job evaluation methods include ranking,job classification, the point method, and factorcomparison.• With ranking, for instance, you conduct a jobanalysis, group jobs by department, and haveraters rank jobs.3. We said the process of creating a marketcompetitivepay plan while ensuring external,internal, and procedural equity consists of 16 steps asfollows: 1. Choose Benchmark Jobs; 2. Select CompensableFactors; 3. Assign Weights to CompensableFactors; 4. Convert Percentages to Points for EachFactor; 5. Define Each Factor’s Degrees; 6. Determinefor Each Factor Its Factor Degrees’ Points; 7. ReviewJob Descriptions and Job Specifications; 8. Evaluatethe Jobs; 9. Draw the Current (Internal) Wage Curve;10. Conduct a Market Analysis: Salary Surveys;11. Draw the Market (External) Wage Curve;12. Compare and Adjust Current and Market WageRates for Jobs; 13. Develop Pay Grades; 14. EstablishRate Ranges; 15. Address Remaining Jobs;16. Correct Out-of-Line Rates• Salary surveys may be informal phone or Internetsurveys, or formal surveys conducted by the employeror utilizing commercial, professional, and/orgovernment salary surveys.• Once the committee uses job evaluation to determinethe relative worth of each job, it can turn to the taskof assigning pay rates to each job; it would usuallyfirst want to group jobs into pay grades to streamlinethe process.• The team can then use wage curves to price eachgrade and then fine-tune pay rates.4. Pricing managerial and professional jobs involvessome special issues. Managerial pay typically consistsof base pay, short-term incentives, long-term incentives,and executive benefits and, particularly at the top levels,doesn’t lend itself to job evaluation but rather to understandingthe job’s complexity, the employer’s abilityto pay, and the need to be competitive in attracting toptalent.5. We addressed several important special topics incompensation. More employers are moving frompaying jobs based on their intrinsic duties toward payingjobs based on the competencies the job requires.The main reason for doing so is to encourage employeesto develop the competencies they need to moveseamlessly from job to job. Broadbanding meansconsolidating several rates and ranges into a few widelevels or “bands,” each of which contains a relativelywide range of jobs in salary levels. Broadbandingencourages employees to move freely from job tojob and facilitates implementing team-based highperformancemanagement systems. Comparable worthrefers to the requirement to pay men and womenequal pay for jobs that are of comparable rather thanstrictly equal value to the employee. With manystockholders concerned with excessive executiveremuneration, board oversight of executive pay hasbecome an important issue, and boards of directorsshould use qualified advisors and exercise diligenceand independence in formulating executive pay plans.Total rewards encompass the traditional compensationcomponents, but also things such as recognition andredesigned more challenging jobs.Discussion Questions11-5. What is the difference between exempt and nonexempt??????????11-6. Should the job evaluation depend on an appraisal of the????????????????????????????????????????????????????????????????????????????11-7. What is the relationship between compensable factors??????????????????????????????????????????????11-8. Define and give an example of how to conduct a jobevaluation.11-9. The average pay for most university presidents is