Total Rewards: Compensation Systems/Plan Design

Compensation Systems/Plan Design

Compensation for employees is generally an organization’s largest expense.  Among the typical concerns are:

Are employees paid fairly?
Is the company paying employees competitively with similar businesses?
Are the positions correctly ranked within our company?
Are company pay policies in compliance with laws and regulations?

  These issues relate to terms such as the following:

Internal and external equity
Classification of positions

 To address the issues and questions regarding compensation, HRGroup uses a number of techniques and tools.

 Job descriptions are usually the starting point.  Using an online Position Data Questionnaire (PDQ), employees provide the data needed to create quality job descriptions.

 Data relevant to determining FLSA (Fair Labor Standard Act) status is collected at the same time.

 Internal equity may be determined by point factor analysis which is also obtained by online questionnaire. 

 External equity is primarily obtained by comparison to other companies or published surveys.  This technique is called market pricing. 

 Developing a pay structure uses data obtained from each of these sources to meet client needs. 

 Ratio analyses are used in the performing this activity.  Among the items are:

Market index:  How closely does the client’s actual compensation agree with their market?
Compa-ratio:  How closely does the client’s actual pay agree with the published pay schedule?
Market-compa-ratio:  How closely does the client’s pay structure agree with their market?

Analyzing the large data sets is performed using statistical and graphical techniques to ensure client understanding of the underlying factors.

By using online data capture, HRGroup efficiently obtains objective data with the least disruption of your staff and employees.

Ask to see a demonstration of the tools and techniques, coupled with professional skill and experience, that can help your company reward employees and remain profitable.

information@hrgroup.com

 

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