BBCM4103 Compensation Management Assignment Sample
For information and reference only – not to be submitted as your own work.
This extract shows how Part I of the BBCM4103 Compensation Management assignment at Open University Malaysia (OUM, September 2026 semester) on internal pay equity and fairness perceptions can be answered. It follows the five tasks in the brief: introduce an organisation, analyse its pay structure against equity factors, explain fairness perceptions and their effects using journal articles, give four recommendations, and summarise. More OUM briefs are listed on the OUM questions hub, and our guide to analysing internal pay equity for BBCM4103 explains how to choose an organisation and collect information ethically.
The original assessment brief is available on our question page: BBCM4103: Salary Market Surveys are tools used to determine the median or average compensation paid to employees: Compensation Management Essay, OUM, Malaysia.
Important: the organisation below, Selaras Logistik Sdn Bhd, is hypothetical and illustrative. It is not a real company, and none of its pay figures describe any real employer. In your own assignment you must use an organisation you know and describe its real practices carefully.
1. Introduction to the organisation (extract)
Selaras Logistik Sdn Bhd is an illustrative Malaysian freight forwarding and warehousing company in the logistics industry, with about 650 employees across a head office, two warehouses and a customs brokerage unit. Its services include sea and air freight forwarding, warehousing, last-mile delivery coordination and customs documentation. The workforce ranges from warehouse assistants to senior managers, and about one third have more than eight years of service.
2. Current compensation structure and internal pay equity
Selaras uses six grades (G1 to G6) with a minimum, midpoint and maximum for each. Pay ranges below are illustrative monthly basic salary in RM. The minimum wage was set at RM1,700 per month under the Minimum Wages Order 2024, which took effect on 1 February 2025 for employers with five or more employees (Bernama, 2025). The G1 minimum sits above that floor, which is consistent with the Ministry of Human Resources view, reported in the same article, that the minimum wage should not be treated as a benchmark for entry-level pay. Students should check the current order before submitting.
| Grade | Example role | Minimum (RM) | Midpoint (RM) | Maximum (RM) | Range spread | Midpoint step | Overlap with lower grade |
|---|---|---|---|---|---|---|---|
| G1 | Warehouse assistant | 1,900 | 2,375 | 2,850 | 50% | – | – |
| G2 | Operations executive | 2,600 | 3,250 | 3,900 | 50% | 1.37 | 26.3% |
| G3 | Senior executive | 3,600 | 4,500 | 5,400 | 50% | 1.38 | 23.1% |
| G4 | Assistant manager | 5,000 | 6,250 | 7,500 | 50% | 1.39 | 22.2% |
| G5 | Manager | 7,000 | 9,100 | 11,200 | 60% | 1.46 | 20.0% |
| G6 | Senior manager | 10,500 | 13,650 | 16,800 | 60% | 1.50 | 16.7% |
Calculation notes: spread = (maximum – minimum) / minimum, so G3 is (5,400 – 3,600) / 3,600 = 50%. Midpoint step = midpoint of grade / midpoint of the grade below, so G3 is 4,500 / 3,250 = 1.38. Overlap = (maximum of lower grade – minimum of this grade) / width of lower grade, so G2 is (2,850 – 2,600) / (2,850 – 1,900) = 26.3%.
Equity factors in practice
| Factor | Current practice (illustrative) | Equity concern |
|---|---|---|
| Job responsibilities and complexity | Grades set years ago from job titles; no formal job evaluation | Similar jobs sit in different grades; complexity changes after digitisation are not reflected |
| Skills and qualifications | Degree holders start higher in the range; licences (such as customs) earn a fixed allowance | Skills gained on the job are not rewarded equally |
| Experience and seniority | Annual increment of about 3% of basic pay | Long-serving staff are paid close to newer hires after market adjustments |
| Performance | Annual rating drives a bonus pool; managers differ in rating style | Same performance can receive different outcomes by manager |
| Job level or grade | Six grades with wide overlap at lower levels | Overlap above 20% blurs differences between levels |
| Other factors | Market hot-skill premiums and negotiated offers for new hires | Negotiated starting pay creates perceived favouritism |
A worked example shows the compression problem. Two senior executives in G3 have the same performance rating. Employee A has nine years of service and earns RM4,650, while Employee B joined last year at RM4,300. Their compa-ratios (salary / midpoint) are 4,650 / 4,500 = 1.03 and 4,300 / 4,500 = 0.96. The gap is RM350, or 8.1% of B’s pay (350 / 4,300), which is only about 1% for each of the eight extra years of experience. Employee A may reasonably see this as unfair.
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3. Perceived fairness and its effects
Theory
Adams (1965) argues that people compare their ratio of outcomes to inputs with that of a referent. When the ratios differ, tension arises and people try to restore balance, for example by reducing effort or leaving. Colquitt (2001) separates organisational justice into distributive, procedural, interpersonal and informational justice. For pay, distributive justice concerns the fairness of the amounts, procedural justice the fairness of how pay is decided, and the other two the respect and the explanations given during decisions.
Evidence from journal articles
| Study | Finding | Relevance to Selaras |
|---|---|---|
| Abdin et al. (2020) | In a Malaysian public audit agency, procedural and distributive fairness in the pay system predicted job satisfaction and organisational commitment | Unclear grading and rating differences weaken satisfaction and commitment |
| Mohamad et al. (2025) | Among Malaysian public doctors, distributive justice reduced turnover intention directly and through organisational citizenship behaviour (OCB) | Perceived unfair amounts may reduce extra-role effort and raise exits |
| Stofberg et al. (2022) | Pay transparency had a weak negative link with turnover intention, explained by perceived organisational support and justice; organisation type mattered more | Transparency helps only when paired with credible practices |
| Alterman et al. (2021) | The effect of pay secrecy on turnover depended on distributive justice | Secrecy at Selaras is risky while compression and rating differences exist |
Together, these studies show that fairness perceptions shape three outcomes: job satisfaction, turnover intention and OCB. At Selaras, long-serving staff such as Employee A may reduce discretionary help to colleagues, while new hires who learn of higher offers elsewhere may leave. Because the evidence comes from different sectors and countries, conclusions must be applied with care.
4. Four recommendations
| No. | Recommendation | Justification | Feasibility and timing | Success measure |
|---|---|---|---|---|
| 1 | Introduce point-factor job evaluation (responsibility, skill, effort, working conditions) and regrade jobs | Builds an objective basis for distributive and procedural justice (Colquitt, 2001) | 6 to 9 months with an evaluation committee; moderate cost | Percentage of jobs with evidence-based grade; fewer grade appeals |
| 2 | Review the grade structure: reduce overlap, consider broadbanding where roles are similar, and fix compression with targeted adjustments | Restores the experience-to-pay link that Adams (1965) equity ratios imply | Phased over two budget cycles | Compa-ratio spread by tenure; fewer inversions between new hires and incumbents |
| 3 | Publish a transparent pay policy and explain decisions (grade ranges, rules for starting pay) | Transparency supports justice and support perceptions, though it works best with fair practices (Stofberg et al., 2022; Alterman et al., 2021) | 3 months; low cost; needs manager training | Pay fairness survey scores; fewer pay queries |
| 4 | Calibrate performance-pay: manager calibration sessions, rating guidelines and a clear merit matrix | Improves procedural and interpersonal justice and links to satisfaction and commitment (Abdin et al., 2020) | Next appraisal cycle; low cost | Rating distribution consistency across managers; turnover among high performers |
The order matters. Job evaluation comes first because it gives objective evidence for the later steps. Communication should start early to avoid rumours, but details of individual adjustments should remain confidential. Mohamad et al. (2025) support the expected pay-off: if distributive justice improves, turnover intention can fall, partly through higher OCB.
5. Summary (extract)
Selaras Logistik’s pay structure is orderly but reflects old job titles, wide grade overlap and uneven rating practice. These features create compression and uncertainty that harm perceptions of fairness. Four linked actions, namely job evaluation, grade structure review, transparent communication and performance-pay calibration, offer a realistic path to stronger internal equity.
Need help applying this structure to the organisation you know? Our management assignment help and essay writing service pages explain how support works.
About the expert
Amirul Azam holds an MBA from the University of Malaya and works in management, organisational behaviour, marketing and international business. His profile lists over a decade in managerial roles and six years of academic assistance, with 2,341 completed orders.
References
Abdin, F., Ismail, A., Muhamad, N. S., & Nor, A. M. (2020). Effect of perceived fairness in pay system on work-related attitude. International Journal of Management Studies, 27(2). https://doi.org/10.32890/ijms.27.2.2020.7792
Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 2, pp. 267–299). Academic Press.
Alterman, V., Bamberger, P. A., Wang, M., Koopmann, J., Belogolovsky, E., & Shi, J. (2021). Best not to know: Pay secrecy, employee voluntary turnover, and the conditioning effect of distributive justice. Academy of Management Journal, 64(2), 482–508. https://doi.org/10.5465/amj.2019.0231
Bernama. (2025). [News report on the RM1,700 minimum wage taking effect on 1 February 2025]. https://www.bernama.com/en/general/news.php?id=2388340
Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86(3), 386–400. https://doi.org/10.1037/0021-9010.86.3.386
Mohamad, A. R., Ali, K., & Noor, K. M. (2025). Distributive justice’s direct and indirect linkages to turnover intention: A structural equation modelling approach. International Journal of Business and Society, 26(2), 386–406. https://doi.org/10.33736/ijbs.10681.2025
Stofberg, R., Bussin, M., & Mabaso, C. M. (2022). Pay transparency, job turnover intentions and the mediating role of perceived organizational support and organizational justice. Employee Relations, 44(7), 162–182. https://doi.org/10.1108/ER-02-2022-0077
