Foundations of a Compensation Strategy

In: Business and Management

Submitted By trise20
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Foundations of a Compensation Strategy
Datrise D. Boyd
Bus 434: Compensation & Benefits Management
Professor Furlong, J.
Sept 10, 2012

Foundations of a Compensation Strategy The sole purpose of a compensation strategy is to “develop a compensation program that recognizes the lifestyle and standard of living of all employees,” (Henderson, R., 2006, pg 3). To define a compensation strategy even simpler, organizations use this strategy to determine how rewards to their employees are distributed. Considering that, compensation is an excellent way to motivate those employees not performing well to do better and those that are working hard to work harder. It is critical that a good compensation strategy be developed and put in place so that companies have a fair process of rewarding each employee for their hard work and determination. “The most effective compensation strategy is one that develops a clear link between the following components: job description, performance evaluation, external salary survey, and internal salary comparison,” (assignment instructions). The position selected for this paper is Human Resource management but first let the discussion focus on the three links mentioned previously. The job description is where potential candidates learn the expectations of the inquired position such as general tasks, functions, and responsibilities. It can also include the position point of contact, specifications such as qualifications or skills needed, or a salary range. It affects the performance evaluation by supplying the manager with that individual’s job description to ensure that, that employee is accomplishing his/her required tasks or if he/she has exceeded those tasks. A company’s “compensation must be competitive with the market,” (Weinberger, T., 1984). A job description helps companies when they are accomplishing external salary surveys…...

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