Designing Compensation Systems and Employee Benefits
Designing Compensation Systems and Employee Benefits
Tameka Clark
Compensation Management/BUS 409
February 26, 2012
Professor Munro
Designing Compensation Systems and Employee Benefits
A compensation system has an important role in a company. An ideal compensation system can motivate employees to enhance their job performance. An organization can use adequate compensation to retain talented employees. Retaining talented employees is important because they help organizations grow and earn high profits. A well-constructed compensation system is the key to an organization being successful and prosperous (“Importance of Compensation,” 2007). To further elaborate on the importance of compensation, the differences amongst job analysis and job evaluation and how these practices aid in creating internally consistent job structures will be described, and details will be given on the challenges that occur when creating compensations that are both internally consistent and market competitive. Also, the fairness of merit increases based upon quartiles will be discussed, the fundamental concept of insurance and how this concept applies to health care will be discussed, and the changes in the business environment and society that may affect the importance of legally required benefits will be described. Describe the Differences Between Job Analysis and Job Evaluation and How These Practices Help Establish Internally Consistent Job Structures Job analysis and job evaluation are the key to creating internally consistent job structures. An internally consistent compensation system will define the relative worth of each job amongst all jobs in a company. Companies use a basic principle when creating internally consistent compensation systems, which is jobs that require higher abilities, more responsibilities, and more intricate job tasks should be compensated more than jobs that require lower abilities, lesser responsibilities, and fewer
Tameka Clark
Compensation Management/BUS 409
February 26, 2012
Professor Munro
Designing Compensation Systems and Employee Benefits
A compensation system has an important role in a company. An ideal compensation system can motivate employees to enhance their job performance. An organization can use adequate compensation to retain talented employees. Retaining talented employees is important because they help organizations grow and earn high profits. A well-constructed compensation system is the key to an organization being successful and prosperous (“Importance of Compensation,” 2007). To further elaborate on the importance of compensation, the differences amongst job analysis and job evaluation and how these practices aid in creating internally consistent job structures will be described, and details will be given on the challenges that occur when creating compensations that are both internally consistent and market competitive. Also, the fairness of merit increases based upon quartiles will be discussed, the fundamental concept of insurance and how this concept applies to health care will be discussed, and the changes in the business environment and society that may affect the importance of legally required benefits will be described. Describe the Differences Between Job Analysis and Job Evaluation and How These Practices Help Establish Internally Consistent Job Structures Job analysis and job evaluation are the key to creating internally consistent job structures. An internally consistent compensation system will define the relative worth of each job amongst all jobs in a company. Companies use a basic principle when creating internally consistent compensation systems, which is jobs that require higher abilities, more responsibilities, and more intricate job tasks should be compensated more than jobs that require lower abilities, lesser responsibilities, and fewer
References: Importance of compensation. (2007). Retrieved from http://payroll.naukrihub.com/compensation/importance-of-compensation.html Martocchio, J. (2011). Strategic compensation: A human resource management approach: 2011 custom edition (6th ed.). Upper Saddle River, NJ: Prentice Hall. Understand the concept of health insurance. (2012). Retrieved from http://www.calhealth.net/california_health_insurance_concept.htm Williams, J. (2012). The definition of job evaluation. Retrieved from http://www.ehow.com/print/about_5378853_definition-job-evaluation.html