Fair compensation doesn't seem like a one size fits all subject because not all workers value the same things. Some workers are attracted to higher pay while someone else is looking for indirect benefits such as health benefits, increased work-life balance, or overall job satisfaction. "Satisfaction is an evaluative term that describes an attitude of liking or disliking. Pay satisfaction, therefor, refers to an employee's liking for or dislike of the employer's compensation package, including pay and benefits." (Ivancevich,& Konopaske, 2013 p 309). Most workers feel that compensation is most fair when it is based on a set of systematic components. Various compensation systems have developed to determine the value of positions.
I thought the HR-Guide website had some good suggestions for figuring out what the components of a company's compensation system might want to include.
· Job Descriptions A critical component of both compensation and selection systems, job descriptions define in writing the responsibilities, requirements, functions, duties, location, environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs individually or for entire job families."
·Job analysis is the process of analyzing jobs from which job descriptions are developed.
·Job analysis techniques include the use of interviews, questionnaires, and observation.
·A job evaluation system is a system for comparing jobs for the purpose of determining appropriate compensation levels for individual jobs or job elements. There are four main techniques: Ranking, classification, factor comparison, and point method.
·Pay Structures Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining.
·Salary Surveys- like we read about in the assigned reading may include average salaries, inflation indicators, cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions.
·Policies and Regulations
Resources:
Ivancevich, J. M., & Konopaske, R. (2013).
Human resource management (12th ed.).
Boston: McGraw-Hill Irwin.