* Internal Equity—assure that jobs are objectively and consistently valued in relation to one another
* External Equity—assure that the company is able to attract and retain the knowledge and skills needed to meet its objectives
* Individual Equity—assure that individual employees are compensated in a manner that is fair in relation to the work they do and value they bring to the organization
* Strategic impact—maximize productivity and effectiveness in achieving organization’s strategic goals
There are three key components of developing job-based compensations plans: achieving internal equity, achieving external equity, and achieving individual equity. This illustration ...view middle of the document...
Performance versus Membership Will compensation emphasize performance and tie pay to individual or group contributions, or will it emphasize membership in the organization —logging in a prescribed number of hours each week and progressing up the organizational ladder?
Monetary versus Nonmonetary Awards Will the compensation plan emphasize motivating employees through monetary rewards like pay and stock options, or will it stress nonmonetary rewards such as interesting work and job security?
Market Salary Data for Selected Benchmark Office Jobs
Job based versus skill based compensation
* Skill based establishes pay grades for acquisition of specified skills
* Develops more flexible work force
* Encourages personal skills development
* Can increase costs if excess of skills develop
* Skills may become rusty
* May attract/retain employees who are better at playing the game than applying the skills
* Used by less than...