Osmosis Conglomerate's Job and Market Evaluations

The Chairman of Osmosis Conglomerate called a meeting to discuss the company$$s compensation system because there had been persistent complaints from employees about real or perceived inequities in pay. Various employees complained that some of their fellow workers were making more than they were for doing the same or similar work. Others complained that the rate of pay at Atlantic was much lower than at other companies in the community.

The Chairman started the meeting by saying that though he was aware of the complaints of workers, it was not the policy of the company to be a pay leader, nor was the company prepared to match the rate of pay that more profitable and larger companies were paying. He also felt that the company should not pay all workers the same pay for the same job since each worker$$s performance varied according to his or her capabilities and motivation.

Osmosis has been in existence since $1965.$ It has never conducted a pay survey or a job evaluation. The company has generally paid workers what it believes they are worth and what it feels it can afford. The company employs $50$ individuals. The average seniority in the company is about $15$ years. Until the current wave of complaints, employees were happy with the company. They felt that Osmosis was a very good employer that cared about its workers and that often went out of its way to help employees in times of difficulty.

Modi Singh, the Compensation, sat quietly during the Chairman$$s presentation. She was hesitant initially to respond to the Chairman. She is experienced with job evaluations and market surveys as methods of establishing internal and external equities in pay rates. Yet, based on what she heard, it became clear to her that the Chairman might not be receptive to information gathered through job evaluations and market surveys.

However, she told the Chairman that the company might benefit from the appearance of pursuing both methods. She said, $$Just because you conduct a job evaluation and market survey, it does not mean you have to change your pay structure. These methods generally provide information about where an organization stands in comparison to its competitors. They also assist in determining the fairness of a firm$$s compensation policies.$$

Requirements:

Given the information provided in this case, answer the following questions:

How can Modi convince the Chairman to authorize conducting a job evaluation and market survey?

Identify and discuss the various methods Modi can use to appraise the worth of various employees to determine the pay levels.

Explain the factors to be considered for fixing pay.

Assuming the Chairman authorized the market survey for compensation, identify and briefly discuss the third$-$party sources of compensation data.