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In defining what fair compensation is for my employer, I would begin by recommending to my organization the four forms of equity: external, internal, individual, and procedural (Dressler, p.353). Understanding these concepts are an important first step to understanding what fair compensation actually is. The main take away of this recommendation would be that a tiered pay system is in affect where lower ranking employees receive a lower wage than, let's say, managers. It is important that each employee is being compensated according to the pay structure assigned to his/her duties based on responsibility and position. After designing a pay tiered pay scale, we can then move to the web, sites like salary.com can help us identify what the fair wage for specific jobs is.
Several factors determine the design of any pay plan which helps us define fair compensation: company strategy and policy, equity, legal, and union. There are other items to consider, Direct Financial Payments (wages, salaries, incentives, commissions, and bonuses) and Indirect Financial Payment (financial benefits like employer-paid insurance and vacations) (Dressler, p352). The impression across the workforce has to be seen as fair pay for fair work, otherwise employees will become disgruntled and, at the very least, display behaviors that are not in line with our strategic aims (known as equity theory).
We should also try and simplify the process, don't make it difficult. Consider these three steps: pay a fair wage but normally never pay more than a 15 percent salary markup over companies with the same work; pay benefits in proportion to what they are getting paid in the first place; finally provide incentives for people who do more than what is expected of them or bring in new business as soon as possible, reward what you want to reinforce said the President of HRthatWorks, Don Finn.
To test my procedures I would recommend to use salary surveys, job analysis and comparison of each job to maintain internal equity, performance appraisals and incentive pay to maintain individual equity, we can administer surveys to see how employees feel about their wage, are they feeling that their wage is fair or not (Dressler, p. 353)"? Another option would be to just ask the employee during their reviews.© BrainMass Inc. brainmass.com April 4, 2020, 1:05 am ad1c9bdddf
Fair compensation should mandate an extensive review of industry practices to ensure that not only does the employee receive fair wages but the company also doesn't lose its place in the market because of over-compensation to employees. Employers should review their company's goals, market, and type of professionals or employees they ...
This solution discusses lead and lag pay scales.