NAMA : DICKY DWI HERLAMBANG

KELAS : 3ID12
NPM : 31417668

1. JAWAB :
The JC Penny compensation system, prior to the current plan, is viewed as an entitlement
philosophy. According to Mathis & Jackson (2008) this philosophy assumes that employees are
entitled to pay increases for each year of work regardless of performance (p. 361). The current
system is reflective of a Total rewards approach, where compensation, which includes base pay,
bonuses, incentives among others, along with benefits, an indirect reward, according to Mathis &
Jackson (2008) are combined with Performance and Talent Management (p. 361).
This new performance based system has enabled the company to link compensation to specific
business strategies of the company. The base compensation system developed using current job
descriptions and job specification links pay structure to individual performance (Mathis &
Jackson, 2008, p 375). By having employees create goals that are aligned with the business
strategies and objectives performance can then be measured for each individual. Goal setting is
an important skill to learn as it will give clear direction to achieve desired outcomes. If you aim
at nothing you will hit it every time.
The creation of Career bands or better known as Broadbanding has allowed the organization to
become more flexible by creating a flatter organizational structure with jobs that are multi-
dimensional. Career bands have created an environment to strengthen career and competency
development for its employees (Mathis & Jackson, 2008, p. 381). Employees now have to think
about and plan for success in the work place rather than just going through the daily routine and
expecting a pay raise. Developing life-long strategies is a key component of success or failure.
This strategy applies to both individuals and businesses.
When developing job performance appraisal systems, several key items must be considered. A
thorough analysis of the job has recently been completed. The performance standard is based on
job analysis. The system is implemented throughout the entire company, and is monitored for
consistency among managers. Is there an extensive training system to ensure that the
performance appraisal system conducts according to written procedures? These are some key
points to remember to avoid discrimination lawsuits according to (Are Your Performance
Appraisals Setting You Up for a Lawsuit, 2010).
2. JAWAB
In the case for chapter 12, JC Penney underwent some changes in order to make themselves
more competitive. The two changes they underwent included developing a new compensation
system, and developing “career bands.” The new compensation system would “develop and
implement; focusing heavily on market value, using survey data that specifically matched job
responsibilities” (Human Resource Management). “Career bands,” “grouped jobs together based
on survey data and job responsibilities and resulted in fewer grades with wider ranges” (Human
Resource Management). The “career bands” represented a broadbanding approach that was
based on benchmark jobs for which market pricing data was available” (Human Resource
Management). The “career bands” were designed to identify career paths throughout the
company, and better link compensation to all jobs.
Within this case, the company’s new compensation system focuses mainly on market value, and
using pay surveys and its data. A pay survey is, “a collection of data on compensation rates for
workers performing similar jobs in other organizations” (Human Resource Management).
However, because jobs differ from company to company, it is important to use and identify those
jobs that are benchmarked. By JC Penney using this method, they are able to see the median of
the data given for each job, and use that information for their company’s compensation system.
Pay surveys are one way in which JC Penney’s changes reflect a total rewards approach, since
pay surveys are a way to evaluate the pay system as well as the compensation rates. The second
and greatest change JC Penney made is the “career bands”. The most important tool for “career
bands” is broadbanding, or rather, “a practice of using fewer pay grades with much broader
ranges than in traditional compensation systems” (Human Resource Management). By
implementing the broadbanding practice, the company is encouraging movement, and skill
acquisition.
The two ways in which JC Penney uses total rewards is reflected in the changes it underwent.
The overall change JC Penney underwent was developing a new compensation system. This then
broke off into two sections, pay surveys and broadbanding, both of which reflect back upon
developing a new pay system, as both are used in the total rewards approach.
In the article, “To Pay or Not to Pay: Wage and Hour is Heating Up,” found in the Daily HR
Advisor (Category/Compensation), one particular section discusses why employees are having
problems with pay. Classification. This section discusses how classification of an employee’s job
will determine their pay. “Many people just aren’t doing the same job they were doing or even
the same type of work, although the organization charts and titles haven’t changed”(To Pay or
Not to Pay: Wage and Hour is Heating Up). In order to fix the pay/compensation system,
companies need to correct their classification of jobs, since for example both methods JC Penney
used are determined by what the classification of each particular job is.