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Bus 409

In: Business and Management

Submitted By kyreed01
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Assignment #1: Setting the Stage for Strategic Compensation and Bases for Pay
Katilia Y. Reed
Professor: Kristin Araujo
BUS-409
April 30, 2012

1. Describe the three main goals of compensation departments. Internal consistency- Compares all jobs with in a company and defines the relative value of each individual job establishing job structure or hierarchy. This ensures that the workers are being paid in relative comparison to the amount of skill, knowledge, training and ability the worker has as well as in relation to the level of each needed to be applied in order to perform the jobs proficiently Job analysis and job evaluations have to be done systematically in order to determine the levels needed and the wage amount comparable to work amount. Recognition of individual contributions- Establishes pay structures and identifies pay rate differences for jobs of unequal worth and the framework or recognizing differences in employee contribution. This will help to ensure that employees are paid according to their credentials, knowledge or job performance. Pay grades and pay ranges are structural features to the pay structure. Jobs are grouped for pay policy application. There is no single formula to determine what is sufficiently similar in terms of content and value to warrant grouping in to a pay grade. Pay ranges build upon the pay grades establishing minimum, maximum, and midpoint pay rates. Market competitiveness- This is the aspect that attracts new employees as well as makes it possible to retain the employees, Market-competitive pay system. The company will examine its external market context and internal factors in order to perform a strategic analysis which compares the industry profile, long-term growth aspects and information about competitors. Internal factors that encompass company financial condition and its functional capabilities such as…...

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