Celestial Azul Holistic Healing & Wellness

Sample of my writing and research from my Master's Project in Industrial Organizational Psychology

Master’s Project Document 3: Theoretical Substantiation

Caprice Simms

University of Phoenix

Table of Contents

Introduction ………………………………………………………………… Page 3

Developing the Current Skill Base Pay System……………………………. Page 3

Skill Base Pay Systems…………………………………………………….. Page 4

- Depth-Oriented……………………………………… Page 5

- Breath-Oriented……………………………………… Page 5

- Teacher Competency……………………………….. Page 5

- Competency Blocks…………………………………. Page 6

Areas for Improvement ……………………………………………………… Page 6

Rationale for Each Section

- Market Based System Review…...…………………… Page 7

- Job Position Review……...…………………………... Page 8

- Skill Level Review……………………………………. Page 9

- New Skill-Based Pay Structure……………………….. Page 10

- Training………………………………………………. Page 10

- Payout Strategies……………………………………… Page 11

- Implementation………………………………………. Page 12

- Measurement of Plan Effectiveness…………………. Page 13

Conclusion …………………………………………………………………… Page 14

References …………………………………………………………………... Page 15

Introduction

The contents of this paper are designed to create theoretical substantiation for the proposed approaches in Document 2, the RFP Response to the City of Missoula (CITY). This document is not designed to be given to the CITY, but is created only for academic purposes to support Document 2. Some of the basic outline content has remained the same for both Document 2 and Document 3 to create a flow of continuity and organization between both documents.

Developing the Current Skill Based Pay System

The CITY uses a Skill-Based Pay System (SBP) to reward its employees for completing training and certifications. A portion of the current SBP is also used for promotion purposes. Incentives were based on three types of reward; 1) rewards for employees whose work exceeded their normal job duties, 2) service pins for years of service, and 3) City-wide recognition for employees who retired from the CITY (City of Missoula, 2008). This provided a base for SBP. SBP is a system that is used reward employees based on their mastery of skills, knowledge and/or competencies. It is a difficult system to implement especially into an organization that has never been introduced to the SBP system. When creating an SBP system there are six determinates or steps that are involved:

1. Identification of jobs in which skill depth and/or breadth is possible to develop.

2. Identification of specific skills of either breadth or depth within each job level.

3. Evaluation of costs and benefits to determine if the SBP program benefits will outweigh the costs.

4. The development of appropriate techniques used in the new skills, knowledge and competencies which will be gained or developed through the program.

5. The establishment of the certification standards and processes for each employee which should be demonstrated once training and/or certification is completed.

6. The determination of the amount of money in dollars that will be rewarded for payout in either a bonus or a pay increase.

(Ledford & Heneman, 2011)

The CITY has a baseline criteria set in the first incentive program of rewarding employees who exceed their required job duties. Additional development would be based on and incorporate the current incentive plan as it helps to lay a foundation for what the employees are used to in terms of rewards for work services. Determination of appropriate rewards for current systems is also considered in the development of the SBP system to ensure a sense of continuity when other training and certification compensation processes are implemented. The SBP system works to increase hourly rates while leading to lower labor costs. This achieved through the increase of average pay rates as the employees learn new skills and competencies. As the employees do more additional employee costs are offset through a leaner staff with higher performance. Caution is used for the more highly labor intensive portions of the organization as an SBP program could be too risky to fully adopt into these sections (Ledford & Heneman, 2011).

Skill-Based Pay Systems

There are several different types of systems within the SBP system which allow an organization to create bonus and pay incentive systems for each of the many different kinds of jobs that are within an organization. Job categories such as the police and fire department have much different requirements and department structures than that of the finance office. In turn the job category for secretaries and personal assistants vastly differ from either of the aforementioned job categories. With this in mind the depth-oriented, breadth oriented, teacher competency, and the competency block systems were reviewed for the CITY to use so to develop all divisions and departments in the SBP system.

Depth-Oriented System

The depth-oriented system is used for skilled trade systems, academic careers, and dual career ladders. The goals of the depth-oriented system is to deepen the expertise of the employee. It works best in employment conditions that have a competitive demand for specialized expertise, that are based on multi-year training cycles that incorporate key skills, and for jobs that are in need of making employee retention very desirable (Ledford & Heneman, 2011). The concern with the depth-oriented system is that employees can overly-specialized in their craft/profession rather than with the mission of the organization (Ledford & Heneman, 2011).

Breadth-Oriented System

The breadth-oriented system is based on self-management skills. This SBP system supports high involvement with lean systems and competency pay for professionals. The goals of the system are to create better employee flexibility and capability, create a broader perspective for the employees, increase employee self-direction, and create new/deeper skills. The best employment conditions for this type of system are lean organizations with high involvement in which the employee is required to be versatile and capable, and organizations that require deeper/new skills for professionals and managers (Ledford & Heneman, 2011).

Teacher Competency

Teacher competency pay systems were created as the teaching profession uses single salary schedules to determine the base for pay progression and new hires. This program is set up as teachers do not move up in their individual grade levels for promotion. Teachers will traditionally choose certain grade levels to teach and stay within those grade levels for the length of their career. The competency based program helps teachers to develop additional skills to improve the quality of teaching as well as the pay rate for the teacher (Ledford & Heneman, 2011). This type of compensation was reviewed for the CITY for jobs that did not fall into either the breadth or the depth pay systems. Many jobs such as secretarial or personal assistant positions mimic the restrictions of teacher style jobs.

Competency Blocks

Competency blocks were created for the teach competency system as a way to reward the teachers for mastering skills (Ledford & Heneman, 2011). The CITY wants to cover the departments and divisions of the Mayor’s Office, Development Services, Parking Commission & Redevelopment Services, Finance Office, Fire & Police Departments, Municipal Court, HR Office, Parks & Recreation, Public Works, and the Attorney’s Office (City of Missoula, 2013). When reviewing the idea of competency blocks the system was diverse enough to use across all parts of the SBP system. Competency blocks can be used to create groupings of certifications to justify bonuses ranging from $300 to $3,000. This will give individual employees a certain number of competencies to finish before they can receive certification. This allows employees to make bonuses over time and limits the amount of bonuses the CITY will pay out annually. The annual budget was taken into strong consideration when deciding to create competency blocks as economies rise and fall over time. Being able to ensure that the CITY can maintain the SBP system in times of economic prosperity as well as times of economic insecurity are equally important as the CITY wants to use the SBP program for the longevity with small annual updates to the system.

Areas for Improvement

The CITY’s current SBP incentive program is small and not well detailed creating vast room for improvement. Considerations when creating improvement is to improve only to that which the organization can handle to limit the amount of employee conflict. The SBP system should create excitement and possibility rather than stress and dread. The SBP system should also complement the needs of the social responsibilities of the organization such as the economy, environment, society, customers and all stakeholders involved with the CITY. The CITY represents the people and has to be reflective of the people’s needs in order to continue to be successful (Hult, 2011). This opens doors for improvement for both inputs and outputs for the CITY when focusing on which training and certification programs to use with the SBP system. In providing sufficient value to the direct population, the CITY will continue to replenish itself and grow as a whole (Blanchard & Thacker, 2007).

Other areas of improvement that the RFP response focused on were those of the CITY’s future developments. The CITY made room for 499 FTE’s while it currently employs 272 employees. This showed that the CITY was looking to grow significantly from 272 employees to the possibility of 499 employees. The CITY is focused on a Green Initiative, Energy and Climate Action, and Energy Efficiency. The CITY is also looking for ways to improve the local river as well as developing neighborhoods and expanding the CITY to attract more professional people to live in it (Missoula, 2014). Understanding the upcoming expansions and developments as well as understanding that this SBP system is updated annually, the SBP system to be developed for this RFP has to be inclusive of the current SBP system, the new SBP system and the future SBP system.

Rationale for Each Section

Market-Based Review System

The SBP seeks to reward higher skilled employees by offering them fair market-based wages that are within the budget of the CITY. A market-based review system is when an organization benchmarks similar organizations to see what they are paying their employees. This number is cross-referenced with the Bureau of Labor Statistics base pay rate (Blanchard & Thacker, 2007). Pay rates vary based on the cost of living for each location as well as the need for qualified employees (Blanchard & Thacker, 2007). In the case of the CITY three college based towns with similar populations were evaluated to determine fair market rates for creating salaries for each job position. The corporate social responsibility (CSR) is considered when developing each rate of pay within the job categories. CSR is a system that works to lower social concerns such as poverty, unemployment and lower living standards (Hopkins, 2006). This same approach can also be used for payouts such as bonuses and pay increases to ensure that the employees are adequately compensated, while also ensuring that the CITY is not overpaying which could result in an unstable market rate (Hopkins, 2006).

Job Position Review

A review of the current job positions and their descriptions for knowledge, skills and abilities (KSA) help to match the person to the job. Online sites such as the one for Veteran’s Affairs teach applicants to match their KSAs to the needs of the organization (VA, 2014). First an organization has to create KSAs for their organization. In the case of the CITY KSAs have been developed for each job position based on the requirements needed for an individual to successfully perform their job. KSAs are not only used to develop individual job descriptions but they can be used to develop the personality and cognitive abilities required for teamwork performance (Kickeul & Neuman, 2000). The CITY’s divisions and departments work on individual aspects from a team perspective. An example of this is the Municipal Court system. Individual employees work to process high volumes of paperwork that then gets submitted to other departments such as the Attorney’s Office or the Finance Office. Each is a system working within a system to create a whole, but is functional through individuals working as a team in separate divisions and departments.

When reviewing each job positions KSAs the criteria needed to perform at different levels within each individual job position was evaluated as well as the ability to cross-train to assist other departments with their workload. This will create a checklist of possible training and certifications that each job position can achieve for the SBP program. The job position review would also set the groupings for categories of competency blocks for bonus payouts. Specific certification achievements would result in higher pay. An example would be if a clerical worker achieved the competency requirements for being able to write specific attorney documents they would receive higher pay as they would assume additional responsibilities that would lighten the workload of the attorney’s office without becoming a paralegal.

Skill-Level Review

Skill-level review and job position review complement each other and are symbiotic. Skill-level review refers to the levels of skills needed to perform the job. While this can be covered in KSAs, it was written into the RFP response separate using a 360 degree multi-rater tool to obtain feedback about what the employees felt are the skills needed for each job position. In an organization the employees have hands on knowledge of what works within that organization and what is needed to perform a job. While every city is created on a base idea each city runs differently. The 360 degree feedback tool is based on a system that allows the employees to rate the qualities and skills needed to successfully perform each job category (Hensal, Meijers, van der Leeden, & Kessels, 2010). The feedback tool can be used in departments that have more than 6 employees in each section to ensure quality and reliability. The information gathered will be used in conjunction with the mainstream KSAs and the observed KSAs based on interviews and research. All information gathered will be used to create the skills needed for each job level/position.

New Skill-Based Pay Structure

The new SBP program is based on two types of incentive programs. The first incentive program was developed based on the breadth-oriented base pay system for job classifications with high room for advancement. These job positions were defined as the jobs found in the fire and police departments. The second incentive program was based on the depth-oriented pay system and was created for job classifications with low room for advancement such as jobs found in the Attorney’s and Mayor’s offices. The new system used teacher competency pay structures for jobs that did not fall into either the breadth or the depth oriented categories. The new system considered all job positions for SBP rewards even if they were not as expansive in some departments as they are in others. This was done to help reduce the feelings of resentment between employees from one division to another that could reflect the feeling of being undervalued and underpaid (hr.com, 2001). Competency-based evaluations divided into four domains would be used to determine pay raises and replace performance evaluations. The two consistent domains would be office/self-management and professional responsibilities. These domains would be used in all job categories as they are important to the success of each division and department (Kokemuller, 2014).

Training

Training was created with three goals in mind, 1) individual needs, 2) team needs, and 3) organizational needs. The CITY is a multifunctional unit of many divisions and departments that create an organizational whole. All functions are needed to work individually on their perspective applications while also being able to work as a team within their divisions and departments and then as a team as the organization that is the CITY. In some cases the individual functions of each department or division will have nothing to do with each other such as the Finance Office collecting property taxes. Yet in the same instance the office will have to call upon the Police Department to collect the property tax. In another situation the Municipal Court will make a ruling on a property that will affect the paperwork for the Finance Office, which will have to be given to the Police Department for service of paperwork to the property owner.

It is for these reasons of complexity that the focus for the CITY training was based on the three concentrations. In considering the needs of the employees and the organization the way training and certification was approached was also considered. Employee sabotage and office politics can create misplaced certifications and progress each employee makes towards competencies (Zeiger, 2014). Using external sources to process training programs will reduce the amount of employee sabotage and office politics that affect SBP incentive programs.

Payout Strategies

SBP systems are not made to be new forms of payment for an employee, but rather an incentive. Keeping this in mind the payout strategies were created to allow employees the ability to progress overtime while keeping within a budget and an advancement process that would not allow the employee to exceed their work level too quickly, but still reach levels of advancement that made the employee feel as if they were still growing within the organization. Looking at the teacher model the competency blocks created a way for both the employee and the organization to benefit. Skill blocks were set based on bonuses of $300 to $3,000 (Ledford & Heneman, 2011). Bonuses were set separate from pay increases. The number of certifications for pay increases were being considered to give employees higher pay while keeping them within specific ranges of pay for each job category. An example of this is that a secretary working for the Attorney’s office would receive a base pay with cost of living increases based on the economic standing. The secretary could earn between $14 and $17 for the year of 2014. The certifications and training for this job position would not exceed the ability to earn more than $17 an hour. The secretary would still be able to earn bonuses throughout the year with no cap. There would not be a need for a cap because there is only so much training a person is qualified to do as well as the limit of time constraints for achievement of categories. While salary caps are mostly used in the sports world, they are designed to restrain the highest possible incomes for short-term outcomes (Moran, 2010).

Implementation

The implementation process was designed based on the perimeters of the contextual outline of the RFP from the CITY. The CITY wanted a program that was applicable within a one year timeframe. Three phases were created for the implementation process. The first phase was created to evaluate the needed information from each division and department to create training and certification programs for the SBP system. During this time cataloging of information needed to process phase two was designed to be gathered. Although it was not stated the idea of the implementation process was based on the balanced-score card approach of tracking and implementation. In particular the idea of strategic mapping was the fundamental thought in the creation of the implementation process (Kaplan & Norton, 2007). The idea for the CITY implementation was to use questionnaires and checklists to determine the needs of each job category and then devise a system of required and advancement training and certification programs for the SBP system.

With this in mind the first and second phase complimented each other and worked symbiotically to reduce the amount of time it would take to accomplish during the implementation process. Phase three was a little more complex as the company would have to implement the programs for this reason a business coach was suggested to answer questions and assist the departments with the implementation of the SBP system as the ability to help implement falls outside of the context of what an I-O professional requirements.

Measurement of Plan Effectiveness

After the third phase had been completed the follow ups through surveys and employee performance would determine the effectiveness of the SBP program. Surveys and employee performance were chosen as they could produce both qualitative and quantitative reflections of how well the program was working. Surveys and employee performance can remain confidential when put into group reflections allowing each department and division to be weighed for success as a whole. When considering an approach for the measurement of plan effectiveness the 360 degree tool was considered again. The 360 degree tool was used to measure KSAs from multiple views. The same idea of gathering multiple views was needed to review the success of the implementation of the SBP system. The same questionnaires could not be used for this part of the process, but a questionnaire was needed to gather the qualitative data needed to consider how the employees felt about the new program.

Anytime something is implemented it needs to be reviewed to determine how well it is performing. This information is measured in quantitative data and qualitative data (Emery & Stone, 2013). It is important to not just know how well something is doing based on performance numbers, but it is also important to understand how well the people are receiving the program. The choice of surveys allows for the employees to discuss how they feel about the program while the employee performance will show how well they are performing with the new program. Time frames of 8 months, 10 months, and 12 months were used to show progression over time and give more information to weigh the statistical information against when deciding whether the SBP system is a success for the CITY.

Conclusion

The CITY wanted to develop its SBP system to make it more inclusive using the training and certifications of employees to create bonuses and pay increases. When looking at the current program and developing it into a more effective program each department and division had to be reviewed to determine what the basic KSAs were. The information was used to create training and certification programs for each job classification. Using the breadth-oriented, depth-oriented, teacher competency, and competency block methods found within the SBP system a process was able to be developed for every job position and classification regardless of the amount of growth that was found within the classification. Surveys and 360 degree feedback tools were used to gain knowledge about the KSAs for each job classification and for gaining qualitative and quantitative information to determine the success of the SBP program for the CITY. Careful consideration was given to the CSR through creating training that would benefit both the goals of the organization and the external CITY functions. Caps were set within each job classification for the year to ensure that the employee payouts did not exceed the budgets set for each department, while allowing each employee to feel valued for their services.

References

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Moran, A. (2010). Are salary caps a problem? Institute of Public Affairs, 62(2), 18-19.

VA. (2014). What are ksas? Retrieved September 8, 2014, from: http://www.vacareers.va.gov/application-process/navigating/ksas.asp

Zeiger, S. (2014). The impact of power and politics in organizational productivity. Retrieved August 24, 2014, from: http://smallbusiness.chron.com/impact-power-politics-organizational-productivity-35942.html