PRAYAG UNION1

Satyendra Pandey and Sushanta Sarma wrote this case solely to provide material for student assignment and
class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial
situation. The authors have disguised certain names and other identifying information to protect confidentiality

Sushma was worried whether she had been compensated adequately by the Prayag
Union. She is not sure how much her job was worth. She was wondering whether
the Assistant Manager (Procurement) deserve twice of her compensation. In order
to resolve the confusion, she decided to meet the head of the personnel department.
She asked for appointment and met the head at his office. Without mincing words,
Sushma asked “How do you decide how much I should be paid? And why the
Assistant Manager should be paid twice of my salary? In my view I am the one who
is running around in the field; he is merely sitting at the office and taking to people
over the phone. Does he deserve more salary merely because he is an old-time
here?”

The head of personnel department was taken aback at this emotional outburst of
Sushma. He paused for few moments before responding. He explained to Sushma
about how the differential compensation was decided in the union. He also shared
about the compensable factors forming the basis for Sushma’s compensation.
Although Sushma was not sure of her performance rating; but she was relieved to
learn on how the union arrived at her compensation.

 If you are the head of personnel, how would you decide the compensations of
different employees at the union?
 Based on the job description and performance appraisal of Sushma, identify
two compensable factors relevant for Sushma. Design a table depicting the
point values and degree definitions for the two compensable factors.
 Make a deck (maximum four slides) covering the two above-mentioned
points.
 One member for the group will be uploading the deck on the LMS
 Please follow the naming convention copied below
o GroupXX_SectionA/B/C/D

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Part 3 of Continuing Case for PRM 42 – HRM Class Assignment
Job Evaluation Method: Ranking
Obtaining Job Information:
Evaluate job specifications and descriptions which later forms the basis for
ranking.
Select & Group Jobs:
Grouping of different jobs based on departments.
Select Compensable Factors:
Fundamental compensable factors are selected such as skills, responsibilities,
roles, working conditions and efforts.
Rank Jobs:
The ranking of jobs is done on the basis of “Alternation Ranking Method”
Combine Ratings
The ratings by different raters (HR, Line managers, etc.) are combined together.
Compare Current Pay with what Others are Paying
Conduct salary survey and obtain the market rates to ensure external equity.
Assign a New Pay Scale
On the basis of the above evaluation and comparison, revise the current pay scale

Job Evaluation Method of Compensation will ensure Internal, External,

Individual & Procedural Equity.

 The compensation of different employees at the Prayag Union should be

done by evaluating the jobs using point method of evaluation and also
using competency based pay. This will help in ensuring fair pay to all
employees and will also make it easy to understand different pay for
different jobs as each will have its own compensable factors
 This method is a quantitative technique through which the job can be
broken down into simple compensable factors which are identified
during job analysis.
 First, we identify these compensable factors that are present in job,
this can be done by looking at the job description.
 Here, we have assumed that there are three degrees of the two
compensable factors (behavioural and operational).
 Points have been allotted to each degree of each compensable factor
and degree definitions are also given
 An evaluation committee should determine the degree to which the
compensable factor is present in the job and then arrive at a total point
value for the particular job and the pay structure for the job is
established.