Building Internally Consistent Compensation Systems
Student Name
Institutional Affiliation
Building Internally Consistent Compensation Systems
Introduction
Compensation systems define the importance of a given job in an organization. Job structure or hierarchy characterizes set of tasks (Larkin, 2019). Organizations believe that jobs with higher qualifications and complex duties should be paid more than those described by fewer complexities, responsibilities, and lower qualifications.
DT 1 (Designing Compensation Systems)
Job Analysis (JA)
JA is a systematic process that gathers, documents, and analyzes information to describe jobs. JA ensures that employee’s requirements, duties, and working conditions are available for anyone who comes knocking the door. Worker requirements are the minimum qualification for one to perform a particular job (Larkin, 2019). These requirements usually include education experience. On the other hand, working conditions are the physical day to day encounters at the workplace.
While most organization believes that those with higher qualification should receive higher compensation, in my opinion, it should not be so. However, the payment metrics should figure in the efforts and the output of an individual worker. The more an individual gives to the organization, the more they should be compensated.
Fundamentally, JD and JA influence compensation structure such as exempt, non-exempt, ranking, and grading because people would choose a job with overtime hours or that which an individual receives a better compensation (Larkin, 2019). For instance, exempt compensation structures allow people only to earn what is due within the stipulated hours, while non-exempted ensures that people are paid for overtime services offered.
DT 2
Crucially, laws and regulations affect organizations in designing their entire compensation plan. Total compensation includes wages, benefits as well as other non-monetary recognition, compensation, and benefits. When these components are put together, they amount to what keeps workers on board and happy. Fairness and adherence to laws and regulations as well as pay equity, ensure the total compensation. One of the laws is the Fair Labour Standard Act which stipulates the minimum dollars an employer can pay and the maximum number of hours an employee must work.
Reference
Larkin, I. (2019). Strategic compensation: a critique and research agenda. In Handbook of Research on Strategic Human Capital Resources. Edward Elgar Publishing.