Compensation Planning

Better Essays
Features of Compensation Planning and Decision Support Organizations design compensation plans that are competitive, fair, and motivate employees. There are several analytic features that are needed for compensation planning and decision support in e-compensation systems. Three analytic features used for compensation planning are job analysis, job evaluation, and bench marking. First, job analysis is the process of getting detailed information about jobs. This process is key for developing job descriptions. Job descriptions are a list of the responsibilities and duties of a job. Managers use job descriptions in performance appraisals to compare employees’ results with the requirements of the job. Moreover, job descriptions help HR …show more content…
Ensuring fairness in pay for employees working similar jobs is referred to as internal equity (Kokemuller, n.d., para. 1). Organizations use job analyses and job evaluations to ensure that compensation structures are fair. Moreover, organizations user e-compensation tools to ensure internal equity. However, there are potential barriers that prevent organizations from realizing the potential of Web-based internal equity tools. First, organizations should select e-compensation tools that integrate with their existing system and compensation plan needs. Moreover, organizations should ensure that the software is web-enabled. According to Gueutal and Stone, “while there are a growing number of software programs in the market that support the design and maintenance of internal equity policies and practices, relatively few are currently both integrated and web-enabled” (Gueutal & Stone, 2005, p. 173). It is imperative that the project team chooses a software vendor that is familiar with its organization and type of industry. Choosing the wrong software provider can result in an inadequate or incompatible software solution. However, to mitigate this risk the project team should send software vendors a request for proposal (RFP). An RFP lists the company’s critical needs of the compensation system (Kavanagh et al., 2012). This allows vendors to align their services …show more content…
E-compensation tools assist companies with the retrieving and processing critical data that ensures internal and external equity. Moreover, HR and functional managers can access critical data at any time through the use of web-based tools. This provides senior leaders the information needed for compensation planning and decision support in e-compensation systems. However, organizations need to manage risks and avoid barriers that prevent organizations from realizing the potential of Web-based tools. Strategies to avoid barriers include integration, training, and ensuring that data received from external web-based sources are accurate and up-to-date. Overall, e-compensation tools give companies the technological advantage to improve efficiency and ensure equitable

Related Documents

  • Decent Essays

    Job Analysis Paper

    • 922 Words
    • 4 Pages

    How do we get the best person for the job and how do we keep that person? Those are the two major focuses for public HRM and it often depends on a thorough job analysis. Job analysis is defined as “the collection and collation of information regarding the tasks performed in various positions in an organization and assessments of the knowledge, skills, and abilities necessary to perform those tasks successfully” (Dresang & Huddleston, 2008, p. 182). The information generated from a job analysis can be connected to all four fundamental human resources management (HRM) functions; planning, acquisition, development, and sanction (PADS). Moreover, any program or activity related to organizational personnel must be based on this information in…

    • 922 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Internal equity is based on education, experience, physical demands, responsibilities, and working conditions. Ranking jobs within the organization need to be consistent with job descriptions. It is important to the organizations design and the compensation structure. To achieve internal equity the pay needs to be related to the value of the work being performed. Internal equity is about the pay relationships between different jobs, skills, and competencies within the organization (Milkovich, 2014).…

    • 772 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    In this approach, there is a job characteristic model that identifies five job dimensions and three psychological states that affect motivation and satisfaction within an employee (Lepak & Gowan). An employee’s experience in finding meaningfulness of work challenges their skills, identifying tasks and the significance of understanding what the job implies for them and the company. Next is the experience of responsibility for outcomes of the work, which allows employees’ freedom scheduling to work to perform their tasks and lastly, employees who are knowledgeable of their work are given feedback, which allows them to receive any information on their performance that may help them in the future. Thus, these psychological states help companies motivate their employees to be the best they can be for themselves as well, which can assist the competitiveness of the…

    • 934 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    ERP is very important in businesses, and its implementation should be carefully considered. ERP implementation has various benefits that all point to effectiveness and success of business operations. ERP focuses on the core operations of the business. When implementing ERP the company should be ready for complications, ensure proper management and understand the operations of the software. The best practices to consider in ERP implementation are selecting the best ERP plan for the business and focusing on early planning.…

    • 1233 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Performance management is a process of assessing the key abilities of the employees of an organization and thereby to create a work environment which employees are able to perform to the best of their ability. Performance management is a documented workflow system that begins its assessment when an employee starts work in an organization. It therefore also ends when the employee leaves the organization. factors it…

    • 1316 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    The organization will, therefore, gain insight into the employees’ motivation factors such as job security, praise and acknowledgment, public recognition, and financial rewards. In addition, employees should be empowered by giving them job descriptions that awards them autonomy and hence enable them find solutions in their job activities. The company should research on the gaps that exist in the current motivation schemes to identify patches. The organization should also ensure that the enterprise's internal image aligns to the external image (Thomas, 2009). The image should be reflected in the manner n=in which the employees are rewarded, treated, and their problem…

    • 2283 Words
    • 10 Pages
    Decent Essays
  • Decent Essays

    Examples of fundamental qualities human resource management are extensive industry knowledge, leadership and give and take effective skills. There are two things HR does. They select an employee from within the organization or outside the organization. Human resource manager has to hire a person who has the capability to do that particular job. Human Resource Management provides knowledge about goals and objectives for employees.…

    • 1541 Words
    • 7 Pages
    Decent Essays
  • Decent Essays

    It is a useful HR system. Motivation behind employment investigation: Job Analysis assumes an imperative part in enlistment and determination. Job analysis help in the preparation and improvement of the representative. job investigation helps in fitting the right sort of ability at the perfect spot and at the opportune time. Work investigation assumes essential part in execution assessment.…

    • 858 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    The appraisal can help assess the knowledge, skills and attributes of an employee so that organizations can determine where employees would best serve the organization. Mishra (2013) explains that “communicating to employees about their performance is known to have a wide spectrum of organizational benefits, such as enhancing employee productivity and organizational commitment” (p. 31). Organizations can pull valuable information from employees using the performance appraisal system to determine an employee’s personality traits, productivity, and the ability to adapt to various working conditions as well as understand the employee’s strengths or flaws. All of these aspects of an employee will help the organizations strategic objectives. Organizations can use this information from performance appraisals to conduct succession planning as well, another strategic objective of an…

    • 797 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Ao Supply Chain

    • 3237 Words
    • 13 Pages

    c. participation in the integration should be evaluated in the 360-degree feedback to help evaluate the obstacles to coordination, the coordination of the tyoturvallisuustason process. It is important to obtain a commitment for a larger and participation which will improve performance. On.com improve its process of supply chain management performance measurement key performance indicator, the best time for the participation of all parties involved in the many - and the top. Conclusion Supply chain is an vital way in business organization dealing with cross-cutting measures and simple activities such as production, obtaining, marketing, sales, , supply and activities of supply as well as support for the development of the role of the information technology. It is significant that all tasks and activities of the supply chain is bound to and connected to the high level of integration in order to have a good performance is based on the measurement of key performance indicators.…

    • 3237 Words
    • 13 Pages
    Decent Essays