The most common way to arrange a pay structure is by defining pay associated with particular jobs. However, this encourages bureaucracy and can reduce flexibility, a real handicap in today's environment. As a result, some companies are experimenting with "banding," or making wider groups of jobs with similar pay. This reduction in the specificity of the structure increases the adaptability of the organization, but can cause some problems.

In this exercise, please read the mini-case and answer the questions that follow.

Ray Wilson is Quality Manager of the Tiffin, Ohio plant of North-West Electric, a manufacturer of electrical components. Some North-West locations have implemented various forms of broad-banding and delayering in response to job-based pay structures. He heard about the experiences of Tiffin's sister plant in Kinston, North Carolina at a recent quality conference. This made him consider his own situation. His staff is generally effective, but they do not always do well in the highly ambiguous environment of the plant because their defined responsibilities do not incorporate a great deal of flexibility, and many of them are reluctant to step outside their roles. There are four levels of employees between him and his hourly staff; Ray sometimes feels overly insulated from the happenings on the shop floor. Now, Ray has to decide whether or not to try this approach with his own staff, and what specifically to do if he does make changes.

3a. If Ray decided to delayer his organization, what would he ...

If Ray decided to delayer his organization, what would he be doing?

Reducing the number of job levels to achieve flexibility in assignments

Listening to his people more

Taking more of an active role in managing his people

Broadening everyone's job descriptions

References

Multiple ChoiceDifficulty: 2 Medium

3a. If Ray decided to delayer his organization, what would he ...Learning Objective: 11-05 Describe new developments in the design of pay structures.

19.

value: 10.00 points

3b. One advantage of the delayering approach at North-West ...

A major advantage of the delayering approach at North-West will be

Better budgetary control over labor costs

More discretion to reward top performers

Better clarity around job tasks

Increased opportunity for promotion

References

Multiple ChoiceDifficulty: 2 Medium

3b. One advantage of the delayering approach at North-West ...Learning Objective: 11-05 Describe new developments in the design of pay structures.

20.

value: 10.00 points

3c. Why might having broader bands help Ray attract better ...

Why might having broader bands help Ray attract better talent?

Increased emphasis on promotions will attract ambitious applicants

Good applicants feel comfortable in a hierarchical structure

He will have more flexibility to meet market pay demands

More detailed job descriptions give applicants a better idea of what they are doing

References

Multiple ChoiceDifficulty: 2 Medium

3c. Why might having broader bands help Ray attract better ...Learning Objective: 11-05 Describe new developments in the design of pay structures.

21.

value: 10.00 points

3d. How will broad-banding help Ray with the fact that his ...

How will broad-banding help Ray with the fact that his employees are reluctant to step outside their roles?

He can be a more "hands-on" manager

Having fewer, broader job descriptions and less emphasis on jobs makes the roles more flexible

The possibility of getting paid more motivates employees

The broadbanding will make the employees feel more comfortable

References

Multiple ChoiceDifficulty: 2 Medium

3d. How will broad-banding help Ray with the fact that his ...Learning Objective: 11-05 Describe new developments in the design of pay structures.

22.

value: 10.00 points

3e. If Ray decides to implement less-defined ...

If Ray decides to implement less-defined job responsibilities, what challenge will he have to manage carefully with regard to performance evaluation?

He will need to handle more paperwork for more complex evaluations

A more informal culture will make evaluation more difficult

With less defined responsibilities, he will have to make sure that everyone understands what's expected of them

Having fewer managers will make that process more difficult

References

Multiple ChoiceDifficulty: 2 Medium

3e. If Ray decides to implement less-defined ...

If Ray decides to implement less-defined job responsibilities, what challenge will he have to manage carefully with regard to performance evaluation?

He will need to handle more paperwork for more complex evaluations

A more informal culture will make evaluation more difficult

With less defined responsibilities, he will have to make sure that everyone understands what's expected of them

Having fewer managers will make that process more difficult