Pay plan is concerned with assigning a monetary value to each job in the organization.
Steps:
1. Job Analysis: Process of describing the duties of a job, authority relationship, skills required, conditions of work and additinal relevant informations.
2. Job Evaluation: Systematically determining the value of each job in relation to all jobs within the organization. JE seeks to rank all the jobs in the organization & place them in a hierarchy that will reflect the relative worth of each job.
3. Wage & Salary Survey: Published surveys, consultant & agencies, advertisement, informal communication.
4. Compensation Structure: Ranking, market rates for similar job, creation of job grades