Building A Pay Structure

The following in an analysis of the overhaul of the pay structure for the non-union jobs at HealthRx (the

CEO position is also excluded). Our method for doing so follows the "Pay Structure" outline. Job evaluation

points of relevant benchmark jobs at HealthRx are indicated in the column labeled (Points (X) on the attached

Excel document. Market rates, from a pay survey analysis conducted by HealthRx, for jobs not included in case

2, are indicated in the next column. Rates from case 2 to complete the column.

Job evaluation points were used as X data; survey rates were used as Y data. A regression analysis to

Determine a market pay line, or "pay policy line" (PPL) is also provided through the attached Excel document.

This PPL is a mathematical way to translate our points into dollars, based on the external labor market.

Using the pay policy line equation provides calculated grade midpoints (in dollars). Calculated

midpoints for each grade are provided as well by using the established middle point of each point range in the PPL

equation, by substituting this value for X.

Grade maximums and minimums are also provided by calculating pay ranges around the midpoints.

Typically, the size of a pay range is based on some judgment about how the ranges support promotions, career

paths, and other organization systems. Commonly, top management positions have ranges of 60 to 120 percent;

entry level to mid-level professional and managerial positions, between 35 to 60 percent; office and production

work from 10 to 25 percent. In smaller organizations, such as HealthRx it is sometimes difficult to get pay ranges

above around 35%- 40% without creating a great deal of overlap. It is appropriate to use different percentages for

different grades.

The attached Excel document displays grades 14 through 18, which are clerical type positions. These

Positions consist of the Mailroom Clerk, Billing Clerk, Center Secretary, Accounts Receivable Specialist, and the

Purchasing Agent. Grades 14- 18 are clerical type positions and therefore received a 35% range factor. No more

than a two grade overlap occurred amongst these positions, which is acceptable in these parameters.

Grades 19-24 were middle management type positions and therefore received a slightly higher percentage

range factor of 38%. The majority of the company falls in to this range. These positions consisted of the

Telecommunications Analyst, Programmer, General Accountant, Benefits Specialist, Tax Accountant,

Compensation Analyst, Human Resource Generalist, Regulatory Analyst, Purchasing Manager, Nurse Practitioner,

Reimbursement Manager, Accounting Manager, Compensation and Benefits Manager, and the Information

Systems Manager. An overlap of three to four grades occurred amongst these positions; the reason being because

jobs are much more specialized at these higher level positions creating a greater pool of talent ranges.

Grades 25-28 were higher-end management positions and therefore received the highest percentage of 40%

for the range factor. These positions consisted of the Center Administrator, VP of Finance, and the VP of

Marketing. No overlap