1.

Financial measures that you would use to classify the companies into A,B,C,D
categories based on the following criteria:
 Their scale and financial performance
 Financial performance measures that employees could directly impact.

Companies can be classified as micro, small, medium and large, Micro will
have less than 10 employees, small businesses have 10 to 49 employees,
medium-sized businesses have 50 to 249 employees and large businesses
employ 250 people or more. A company can measure its financial performance
by doing Working capital Analysis, financial structure Analysis ,Activity
Analysis and Profitability Analysis .All this will impact the employee either
directly or indirectly .Normally firms will be concentrating more on profitability
which will impact the employees pay out directly through bonus and variable
pay .The factors needs to be analysed are Individual performance/output, Group
or team performance/output, Workplace-based measures, Organization-based
measures. Also needs to think about Financial Perspective ‘Funding and the
financial health’ and also earnings-before-interest-and-taxes (EBIT) will
directly impact the compensation structure .

A detailed pay structure for executives at three levels (junior, middle, top
management) reflective of the company classification.

We have to consider the labour regulations and components as per the law while
devising a pay structure in all the categories

Pay structure will consist of the following

1. Structure and components as per Law + As per HR policy +Variable as

per Rating Scale +Incentive multiplier
What information are essential and where would you get it for designing this
pay structure?

The most important factors which are essential for creating a pay structure is to
have a Market competitive Pay plan .In order to have a market competitive
pay plan we should do benchmarking which will help to attract best talents
and remain with the company. This information can be obtained from sites like
Glassdoor , Pay check Job star etc or we can do survey to get the pay grade and
salaries and we can have a min max structure based on this and salary can be
fixed on this . We should select compensable factors across location / across
country. Then give weightage to this factors . We should also have Rating
scales to match employee performance with what have been decided and take
measures to avoid Halo effect , rating issues etc .We have to consider the
complexity of the organisation and type of work force needs to be analysed a
proper weightage needs to be provided based on problem solving, creativity etc
for the jobs . A job complexity weight needs to be assigned