Setting the Stage for Strategic Compensation and Bases for Pay HR Practices
January 30, 2011
Describe the three main goals of compensation departments
The three main goals of the compensation departments are internal consistency, market competitiveness and recognizing individual contributions. When companies set the pay for jobs they want to be consistent with pay grade in regards to the job description. Higher pay is given to jobs that have greater responsibilities and greater qualifications than jobs that have lower expectations and responsibilities. Doing evaluations and analysis of jobs you can attain consistency internally, and establish the correct pay amount for each job.
There are many qualified individuals for jobs and companies have to be competitive in compensation to attract the most talented employees in the field. To achieve this market and compensation surveys are conducted to determine the rate of pay for a certain field. Many indicators are used to determine pay competitiveness such as competitors, marketability and long term growth prospects and the company’s strength in their field.
Recognizing individual contributions helps determine pay structures. Every employee is different and employees don’t do the same job alike. One may have more knowledge or more experience and because of such disparity that is why HR professionals assign pay grades or assign pay grades within pay structures for a job. Companies understand this want to compensate the employee for what they contribute to the job. Pay grades are in ranges that allow for the minimum qualifications to the highest and also allows for incentives when dealing with a prospective employee and their qualifications.
Describe the contextual influence that you believe will pose the greatest challenge and the contextual influence that will pose the least challenge to companies’ competitiveness and explain why.
Labor unions will pose the least challenge to companies’ competitiveness...
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