Describe the three main goals of compensation departments.
The three main goals of a compensation department are internal consistency, market competitiveness, and recognition of individual contributions. Internal consistency defines the relative value of each job among all jobs within a company. This ordered set of jobs represents the job structure or hierarchy. Companies rely on a simple, principle for building internally consistent compensation systems. Compensation professionals use job analysis and job evaluation to achieve internal consistency. Job analyses describe content or job duties, worker requirements, and sometimes the job context or working conditions. Based on job evaluation and the firm’s priorities, managers establish pay differentials for virtually all positions within the company (Martocchio, pg. 22, 2011). Market competitiveness plays a significant role in attracting and retaining the most qualified employees. Compensation professionals build market-competitive compensation systems based on the results of market surveys and compensation surveys. A strategic analyses permit business professionals to see where they stand in the market based on external and internal factors (Martocchio, pg. 22, 2011). 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 (Martocchio, pg. 22, 2011).
Describe the contextual influence that you believe will pose the greatest challenge and the contextual influence that will...
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