Stages For Strategic Compensation And Bases For Pa

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Running head: SETTING THE STAGE FOR STRATEGIC COMPENSATION AND BASES FOR PAY Stages for Strategic Compensation and Bases for Pay Business 409 Strategic Compensation October 28, 2011 SETTING THE STAGE FOR STRATEGIC COMPENSATION AND BASES FOR PAY Describe the three main goals of compensation department. The three main goals of a compensation department is Internal Consistency, Individual contributions and Market competitiveness. Internal consistency is the extent to which tests or procedures assess the same characteristics, skill or quality. It defines the relative value of each job among all jobs within a company (Martocchio pg 22). Effective internal consistency relies upon the job analysis and job evaluations. In compensation; a job analysis is used to identify or determine skill levels, compensable job factors, work environment and required level of education. Job evaluation is used to determine the value of each job in relation to all other jobs within the organization. The process is useful because sometimes job titles can be misleading thereby making it difficult to know each job in detail. Market competitiveness on the other hand focuses its attention on gaining the best qualified employee and retaining them. A company must be customer focus and watch its competitors as well as develop suitable resources. Pay structures are vital to an organizations compensation department. It recognizes the importance of individual contributions by developing pay grades and ranges that promote the retention of their valued employees. Describe the contextual influence that you believe will pose the greatest challenge and the contextual influence that will pose the least challenge to companies’ competitiveness and explain why. Labor Unions pose the least challenge to a

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