Compensation

Human Resource/Compensation

Answer 1)

Compensation and Reward Strategy

The role of compensation and benefits has experienced an increasing role, from being an unknown issue to be one of the significant challenges and tasks within the Human Resources Department.

The subjects addressed in an integrated manner, taking into account tax implications and the impact on the income of the company. Compensation costs have risen sharply in recent years, primarily because of escalating benefit costs. Employers now spend more than $1 trillion on employee benefits. An organization must contain these spiraling costs if it is to get a proper return on its human resource investment, and thus gain a competitive advantage. When compensation-related costs escalate, the organization must find a way to offset them. In the past, companies passed along these increases in costs to the customer in the form of higher prices. The performance of effective management facilitates greater integration of human resource function in the strategy of the company. It is essential for new start ups to consider that employees relate satisfaction with pay, because the socioeconomic benefits, present in the collective agreement or individual contract, play a significant role in the workplace. A company's compensation system operates in terms of cost/benefit that is, the expected result of an investment in return to incentives. It means that an organization must contain these spiraling costs if it is to get a proper return on its human resource investment, and thus gain a competitive advantage. (Gilmore, 2009).When compensation-related costs escalate, the organization must find a way to offset them. In the past, companies passed along these increases in costs to the customer in the form of higher prices. From this perspective, the question that should be asked when any compensation program is being considered is as follows: "does the incremental investment in this plan contribute to the company's financial success?"  There are really two potential dimensions to the answer: One has to do with hard dollars - more revenues, profits, cash flow, stock value, etc.  The other is terms of soft dollars - increased productivity, turnover reduction, improved client service, etc.

Answer 2)

Job Point System

Objectively evaluating jobs allows the classification and ranking of employment levels and job titles. Ranking can help develop compensation tiers, an organizational structure or calculate the internal value of a position. Use a job evaluation to establish the chain of command within your company. Accomplish a job evaluation using a point system by applying the Hay job grading scheme or other analytical measurement method. Establish the point value of each position within your company where the largest point value is assigned to the most critical and important job in the company.

A point value-based job evaluation system that measures the relative worth of jobs based on factors that include job knowledge skills, work complexity, accountability and working condition hazards.

The purpose of the system is to objectively measure the content of each job; determine its relative worth; and establish equitable pay relationships among all jobs within an ...