HRM590: Compensation Decisions

Your job now is to pull together all the information youve completed so far in class and make salary decisions for your team. You have completed Cathys
evaluation and received assignment feedback. This is the first year that youve made salary decisions for this team. Be sure to carefully review the information
provided. You may simply type in the cells as the text will automatically wrap. You are required to:
1. Enter Cathys appraisal rating (she is last on the list);
2. Within your budget dollars, make your salary decisions based on performance for your team taking into consideration their Salary Grade and the Pay
Ranges identified for the Salary Grades (fill in the Salary Decision Column);
3. Within your budget dollars award bonus money (fill in the Bonus Dollars Column);
4. In the green line areas, provide your substantiation and risk analysis for the salary decisions made; and
5. Identify any items from this scenario in whole you may want to address.
Evaluation ratings are 1 = Needs Improvement to 5 = Exceeds Expectations
Salary Budget: $9,000
Bonus Budget: $5,000
Company Designated Salary Pay Ranges
A2 = $12,750 17,000
A3 = 16,500 22,000
A4 = 21,000 28,000
Employee Information

Salary
Grade
A4

Current
Salary
$27,900

% at Pay
Scale*
99.6%

Appraisal
Rating
5

Salary
Decision
$100.00

Bonus
Dollars
$1500.00

John is a white male, 58YO, with 31 years service. John is a good worker
and you like him. You dont want to lose his skills and experience as hes
been talking about retiring, but you realize his skills are too valuable to lose.
Substantiation and Risk Analysis: The decision to give John only $100 for a salary increase was made due to his current salary and the room left before he would
max out at his designated pay grade. With that in mind, I chose to give him a larger bonus due to his excellent appraisal rating.
Alice is a Hispanic female, 42YO with 17 years service. Alice is a good
A4
$22,500
80.4%
3
$1850.00
$200.00
worker. She has a lot of potential, which netted her the higher rating. She
needs some more skills and experience at this level though.
Substantiation and Risk Analysis: Alice was given a fair salary increase due to her appraisal rating and the amount of room that she had available at her current
pay scale as well as an incentive to tap into the potential that she has. Her bonus amount was lower due to the appraisal rating, but her contributions were to still
be recognized.
Calvin, 28YO black male with 9 months service. Calvin is a real go getter.
A4
$26,500
94.6%
4
$1350.00
$500.00
He hasnt been with the company long enough to earn a higher rating, but
his work is outstanding, high skill set and is looking to stay with our
company for a career.
Substantiation and Risk Analysis: Calvin was given an increase in salary due to the exceptional work that he has been doing and his appraisal score and we
have hopes that this will be an incentive for him to continue with our organization. His bonus amount being reflective of his appraisal rating.
Jane is a 32YO white female with 12 years service. Jane joined the
A3
$19,100
86.8%
3
$1700.00
$200.00
company as an A3. Her work is satisfactory, nothing to brag about, but
shes been with the company awhile and can be dependable.
Substantiation and Risk Analysis: Jane was given her salary increase because of her dependable service to the organization after many years of service. Her
bonus amount is reflective of the appraisal rating that she was given.

Beth is a 64YO Asian female with 41 years service. Beth stated she would
A3
$19,700
89.5%
3
$1000.00
$200.00
probably retire this year, but has yet to turn in her paperwork. Shes had a
history of higher ratings, but her ratings have slipped over the last 6 years.
Substantiation and Risk Analysis: Beth has been a solid employee for us and her salary increase is to reward her for her contributions and in hopes that if she
continues to stay with the organization, that we can help bring her performance back to that of years past. This is also reflective in her bonus amount.
Ben is a 47YO white male with 27 years service. Hes a good worker, been
A3
21,000
95.5%
4
$800.00
$500.00
with your group for a couple years. Hasnt yet expanded his skills, which
you thought hed do even though hired for a specific job. What he does, he
does outstandingly.
Substantiation and Risk Analysis: Ben has been a solid employee and has been rewarded for that with his salary increase. We have hopes to be able to train him
in other areas as well and fully utilize his skills. His bonus amount also is reflective of his appraisal rating.
Alex is a 30YO white male with 9 years service. Hes quite a guy, performs
A2
$15,800
92.9%
5
$1200.00
$700.00
well at his job. Started as an occupational worker and has worked his way
into management.
Substantiation and Risk Analysis: Alex has been a consistent and solid employee that has progressed within the organization. His salary increase will bring him
to the maximum of his pay grade as well as his bonus amount being reflective of his appraisal rating. We have hopes of being able to increase Alexs
responsibility and potentially his salary grade as well.
Ken is a 20YO Hispanic male with 1 year service. Ken is young and fresh.
A2
$17,000
100%
4
$0.00
$1000.00
You think he should have been hired at a higher level because his skills are
so good. You dont want to lose him because he adds value to the
business. Youll probably jump him to an A4 position soon.
Substantiation and Risk Analysis: Ken has done a remarkable job so far in the position he was hired for and we have hopes to move him within the company to
fully utilize his skills and abilities. He was unable to receive a salary increase due to the fact that he was at his maximum salary for his pay grade, however his
bonus amount is reflective of his appraisal rating and we hope will serve as an incentive for his continued work.
Cathy is your 19YO (ethnicity unknown) female HR Receptionist. She has
A2
$12,000
70.6%
3
$1000.00
$200.00
been with the company for 1 year. You recently completed her performance
evaluation.
Substantiation and Risk Analysis: Cathy is a new addition to our team and her salary increase is to bring her in to the range for her pay grade and reward her for
her dedicated service so far. We have hopes to be able to build on her knowledge with the company and her bonus is reflective of her appraisal rating.
*This shows the pay scale range for each employee by percentage. Formula is current salary top salary range. This percentage range should be between 75% - 100%.

Overall Comments: In determining the salary increase for each employee, I first figured out how much they would still be allotted within their specific salary grade.
From that point I made adjustments due to their appraisal ratings and the comments within their performance reviews. In the case of John and Ken, they were
both at the top of their specific salary grade, so I chose to compensate them with their bonus to still be able to reward them for their hard work and service. In the
case of Cathy, giving her the salary increase that she was given, brought her within the amount of her pay grade as she was below it when she was hired on with
the company. The determinations for the bonuses after giving them to John and Ken, was based on the remaining balance and the appraisal ratings of each
employee with $800 being given to Alex who had a 5 rating, $500 being given to those with a 4 rating and $200 being given to those with a 3 rating. Each
employee was deserving of recognition and reward for their service and performance, the amount was determined by the score of their review.