Setting the Base Pay Level Based on the Market

Why this assignment?

This assignment supports Course Objective 4 listed on our syllabus.

Instruction

To do this assignment, you need to first know how you can obtain the market pay data of a given job in a given area from the Bureau of Labor Statistics webpage (www.bls.gov/oes/data.htmLinks to an external site.). So, watch the video Bureau of Labor Statistics (BLS) Pay Data (provided with this instruction file in Canvas). But you were also required to watch this video for Discussion #5. So, if you have already watched this video, you do not need to watch it again.

Watch the video How to obtain pay data from Glassdoor (also provided with this instruction file in Canvas). You also need to have a clear understanding of the contents of this video.

Let’s assume that you plan to open a large family restaurant in Killeen, TX. You are in the process of hiring employees for your restaurant. In this process, you need to decide on the standard base pay level of various jobs within your restaurant. And one of the jobs that you need to set the standard base pay level for is the Restaurant Manager job. You are planning to hire three Restaurant Managers, considering the work hours for rotation and smooth operation. The base pay of each Restaurant Manager is likely to differ from one another, considering the experience and other factors. However, you do want to have a clear picture of the overall standard base pay level that you are willing to pay for this job. You believe the three major competitors in this market are TGI Fridays, Outback Steakhouse, and Red Lobster. You want to position your restaurant as a place that a family can enjoy at a lower price than these three restaurants. So, you plan to maintain the overall operating costs and labor costs as low as possible. As a result, you want to set the base pay level of the Restaurant Manager job lower than that of the Restaurant Managers at these three restaurants at the national level. However, you do want to pay at a higher level than the 25 percentile wage level of Restaurant Managers in the Killeen area.

So, you first have decided to research the pay level of your competitors (at the national level). Using the data from Glassdoor (www.glasdoor.comLinks to an external site.), fill in the below table (Table 1).

Table 1. Average Annual Base Pay of Restaurant Managers in the Three Restaurants

Job

TGI Fridays

Outback Steakhouse

Red Lobster

Average

Range1)

Average

Range1)

Average

Range1)

Restaurant Manager

1) For the “Range,” please use the “Most Likely Range” (or the “25% to 75% Range”) you see on the Glassdoor webpage.

* To see the pay level estimate on the Glassdoor website (www.glasdoor.comLinks to an external site.), follow the below steps.

To do this, you’ll need to sign up for the Glassdoor account. (Students get 12 months of free access to all the contents on the website.)

Step 1: Go to the web page (www.glasdoor.comLinks to an external site.).

Step 2: On the main page, click the ‘Salaries’ tab on the top.

(You may need to sign in first to see the ‘Salaries’ tab.)

Step 3: In the search box, type in the company name. And for the purpose of this assignment, delete the location on the right side of the search box. Then, click the search icon (the green magnifying glass icon on the right side of the location box).

Step 4: Among the search results, click the company of your choice.

Step 5: Now, you’ll see the pay level estimates of the jobs within the company that you had chosen. Examine the estimate for the job of your choice.

The video demonstrating this process (How to obtain pay data from Glassdoor) is also provided with the assignment.

Now, you need to research the pay level of Restaurant Managers in the Killeen area. Using the data from the Bureau of Labor Statistics (BLS) webpage (www.bls.gov/oes/data.htmLinks to an external site.), fill in the below table (Table 2). Unfortunately, the BLS webpage does not have the data on Restaurant Managers. The data for the closest job the website has is the Food Service Managers job (119051). Use the data for this job in the Killeen-Temple, TX area.

Table 2. Average Annual Pay of Food Service Managers in the Killeen-Temple, TX Area

Area: Killeen-Temple, TX

Occupation (SOC Code)

Annual

mean wage

Annual

10th percentile wage

Annual

25th percentile wage

Annual median wage

Annual

75th percentile wage

Annual

90th percentile wage

Food Service Managers (119051)

* To see the pay level data of a given job on the BLS webpage, follow the below steps.

Step 1: Go to the United States Bureau of Labor Statistics website (www.bls.gov/oes/data.htmLinks to an external site.). In the database Occupational Employment Statistics, click on the one-screen data search.

Step 2: Inside the ‘Select a search type’ box, click Multiple occupations for one geographical area, then click Metropolitan or Non Metropolitan Area.

Step 3: Choose the area Killeen-Temple, TX.

Step 4: Select the occupation Food Service Managers.

Step 5: Select annual mean, 10th percentile, 25th percentile, median, 75th percentile, and 90th percentile wages.

Step 6: Select an output type.

Step 7: Based on your output, fill in the above table.

The video demonstrating this process (Bureau of Labor Statistics (BLS) Pay Data) is also provided with the assignment.

Based on the numbers that you have filled in on the above two tables, and considering your targeted pay level that was described on page 1 (bolded and italicized), what would be the appropriate pay level (or range) for your Restaurant Managers? Why?

In sum, what you need to do for this assignment are the below three things.

1) Fill in Table 1 (on page 1 of this document).

2) Fill in Table 2 (on page 2 of this document).

3) Answer the question “What would be the appropriate pay level (or range) for your Restaurant Managers?” (on page 3 of this document).

This is also summarized and outlined in the ‘Answer Format’ that was provided with this assignment. Use the format in submitting your assignment.

Important Notes

In writing your answers, NEVER copy-and-paste any part of the textbook or any other sources. Write the answers in your own words. If more than seven consecutive words are identical to a writing from another source (including the textbook, your past works, and any other sources), it will be considered plagiarism, and you will receive a failing grade “F” in this course. You will also be referred to Students Affairs.

See Appendix for the grading rubric.

In the past, some students said that the BLS website does not work. They explained that they clicked the radio buttons, but the webpage did not advance. Sometimes, the website can be slow. But, if you click the radio buttons back-and-forth and multiple times, it will eventually work. If you watch the video Bureau of Labor Statistics (BLS) Pay Data (provided with this instruction file in Canvas), you’ll see that Professor Yoon runs into the same problem described here. But you’ll also see in the video that the webpage eventually advances when Professor Yoon clicks the radio buttons back-and-forth and multiple times.

As Professor Yoon also mentions in the video Bureau of Labor Statistics (BLS) Pay Data, the data from BLS and Glassdoor websites may not be as sophisticated as for the companies to utilize in making pay level decisions. And many companies will actually use more detailed data provided by consulting companies or organizations specialized in pay level research. But the main point of this assignment is to go over the pay level decision-making process based on the market, which can be the process that some organizations may go through. And although the data may not be that sophisticated for organizational use, it may provide valuable information to job seekers to evaluate whether the job offer that they have received is a good one or not in terms of pay level. So, you may want to bookmark these webpages. They may become handy since we all are likely to be a job seeker at some point in our lives.