Determining Compensation Structure

Compensation is very important to every company. If an employee feels as if they are not being compensated enough for their input into the company then that will result in that person leaving in the company increasing the turnover rate. In order to make sure that every company has the lowest turnover rate they possibly can they need to look at their compensation and benefits to every employee. Before going into these meeting I would have to make the CEO aware that a 10 minute meeting may not be sufficient in giving a complete run down of everything the company will need to look at. A compensation system takes a lot of time and effort in evaluating because it is more than just pay they have to look at. They need to look at job structure, pay …show more content…
It is like pay structure in that they are basically ranking jobs based on employee output and determining the worth of the jobs. They can either evaluate these jobs by using the ranking method, categorization method, or point/factor systems. They can benchmark these jobs and use different analysis to find what the pay and job structure should look like for their company and if they are paying everyone the right salary for their position. When evaluating their company they need to look at what they want to motivate their employees to be doing. People do what they are incentivized to do, so this is a big step in evaluating their compensation. There are many things that a company can …show more content…
This again will rely on the job structure and who in the company can earn incentives for their output. You have to be careful of agency issues and discrimination laws; because either can be a factor if someone feels they are not getting an equal opportunity of compensation. The company needs to determine what they want employees to get out of their compensation practice. Are they trying to get more employees buy in for the company, increase productivity, or increase employee