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Compensation Management

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Companies use a simple but fundamental principle for building this system, it is the more an employee has whether more qualifications, responsibilities or more duties are and should be aid more than the employees that are less qualified, have less responsibilities and less job duties. Internal consistency compensation recognizes the differences in job characteristics and pay is based on that. Job analysis and job evaluation are used to define the value of jobs. Job analysis is a process used to gather, document and analyze information to describe the different jobs content, such as, duties, requirements, and sometimes working conditions.

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Job evaluation is used to recognize the differences in worth among the different jobs and to set pay accordingly. Job analysis is descriptive, job evaluations reflect the value and importance management places on a different positions. Market competitive pay systems play an important part in attracting and keeping the most qualified employees. Based on market and compensation surveys, compensation professionals build a market competitive compensation system.

Strategic analysis is used which is an examination of the external market context and internal factors of a company.

External market context is the “industry profile, information about competitors, and long-term growth prospects” (pig 22). Internal factors consist of the “company’s financial condition, their functional abilities” (pig 22). A strategic analysis lets professionals see where they stand against other professionals. Compensation surveys collect and analyze competitor’s information, mainly focused on wages and salary practices. Benefits are also surveyed because a company’s benefit package is a key part of an employee’s salary package.

Compensation surveys play an important part because they are used to get a good view of competitions wage practices which can help a company attract and keep an employee. Pay rate differences for jobs and the differences in employee contributions are represented by pay structures. Since no two employees have the exact same qualifications, credentials, or perform duties equally, they are recognized by differences in pay, this is recognizing individual contributions, pay based on knowledge, credentials and performance.

A well designed pay structure should show the value the company sees in their employees. Human resource professionals group jobs into pay grades based on similar factors and values, though there is no single formula to get pay grades. Pay ranges include the minimum to maximum value of a pay rate and is built on the pay grade. Describe the contextual influence that you believe ill pose the greatest challenge, and the contextual influence that will pose the least challenge to companies’ competitiveness and explain why.

The contextual influence that I believe to pose the greatest challenge to companies’ competitiveness is outsourcing jobs to other countries. When a company outsource jobs to another country the salary or wages paid are a lot less, and also the laws and restrictions are less but it takes away from people in the U. S. Being able to find a job and work. The competitiveness between companies that outsource compared to companies that hire workers in the U. S. Re the outsourcing company can take jobs at less money than the company in the U.

S because the company in the U. S has to pay at least minimum wage and has laws and restrictions to follow. The company outsourcing will be seen making a profit whereas the company in the U. S. Paying higher wages will be seen maybe making a profit but it would be small compared to the other company. The contextual influence that I believe to pose the least challenge to companies’ competitiveness, I think, would be the companies that run with very little competition, such as, the U. S. Defense industry and public utility companies.

These companies are the only ones that supply this product so they make more of a profit and also can up their prices for the product which increase their profits and can pay their employees higher wages. They also attract more people due to the higher wages and the fact there is little to no competition. Describe when subjective performance evaluations might be better (or more feasible) than objective ratings. Subjective performance evaluations might better than objective ratings when a person is working in the public service field, such as, customer service representatives, retail sales, cashiers, etc.

Subjective performance evaluations are measured by the quality of work of an employee and how they are with people or animals in their workplace or job. Objective ratings are numbered quantity; these ratings would be best used in manufacturing jobs, assembly jobs or production, where the number of items you have completed, sold or produced is the main part of the job. Describe under what conditions profit sharing plans are not likely to motivate employees. Profit sharing plans are not likely to motivate employees when an employee cannot or does not see a link between their efforts or duties and the profits add.

Hourly employees, which include assembly line employees, have the most problem seeing the link between them and the profits because they are on the bottom of the ladder, so to speak. They may feel they are such a small part of the whole and may feel like just another worker and that corporate does not think of them as an integral part of the process. Based on your knowledge of pay-for- knowledge pay concepts, describe three jobs for which this basis for pay is inappropriate and explain why. Three jobs for which pay-for-knowledge pay concepts are inappropriate for are: Anatolia, fast food and retail jobs.

Cite this Compensation Management

Compensation Management. (2018, May 26). Retrieved from https://graduateway.com/compensation-management/

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