The following in an analysis of the overhaul of the pay structure for the non-union jobs at Health Rx (the CEO position is also excluded). Our method for doing so follows the "Pay Structure" outline. Job evaluation points of relevant benchmark jobs at Health Rx are indicated in the column labeled (Points (X) on the attached Excel document. Market rates, from a pay survey analysis conducted by Health Rx, 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 Health Rx 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 can be achieved at these levels because it is the highest level of attainment listed, except for the Center Administrator where a three grade overlap is possible. Given the market pay survey information that is established and our other reasonable assumptions, we are overall satisfied with the pay structure that has been created, except for two positions. The median (or mean) market pay rates of all jobs fell well within the proposed range of the grades except for the Programmer and the Nurse practitioner. The market rate does not fall within our proposed range for grade 19, because the market rate is higher than our rate. This may have occurred because a shortage of a particular skill set, such as that of the programmer, may have driven up the market rate.

This can also be said for the Nurse Practitioner. Health Rx may not have the same needs for a programmer as other companies may. Also, our evaluation system rates a programmer fairly low in comparison. But if a reclassification occurs with a market-sensitive position into a higher salary grade, where it will remain long after the disparity has been corrected, creates additional problems. A special range that is distinctly determined to as market responsive is a better approach to this problem.

The market rate for the Nurse Practitioner also falls well below the minimum for level 23. The Nurse Practitioner is a highly skilled position in relation to the business aspect of a company. To correct this problem, we will begin with job analysis and the job description for this position. We will then re-evaluate the labor market analysis as well as market pricing for this position. The final step is to compare the value of the Nurse Practitioner position to Health Rx in comparison to the Health Rx jobs already priced in market.

Internally, the use of ranges is consistent with variations in the discretion present in jobs. Some employees perform better than others do; some employees are more experienced than others are. Pay ranges permit employers to value and recognize these differences with pay. No single "going rate" for a position is displayed in the market; instead, a variety of rates will occur.