Register now or log in to join your professional community.
Dear Mr. Surjani,
Greetings from Karachi Pakistan!
Million thanks for invitation.
I am the opinion that it is based on two components.
A=Core Job Competencies
e.g. Qualifications,Experience,able to convert knowledge into skills & command over tools & softwares required for any job.
B=Core job responsibilities.
e.g Based on job description.
Once these competencies & core job responsibilities are identified & established aligned with organizational Vision & mission statement ,Goal & objectives, on the bases of this we will set Key performance Indicators KPI's for each job & department.It will help us setting pay scales for each position in each department.
{Key Performance Indicator (KPI) will be the measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets.}
Regards
AGG
Elements before deciding salary scales:
Job Analysis/ Job Description: Prepares job description to assess primary objectives and figure out end result
Job Evaluation: Evaluate job base on KH, Problem Solving & Accountability
Pay Structure: Market Survey, internal and external equity
Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction.
Compensation is a tool used by management for a variety of purposes to further the existance of the company. Compensation may be adjusted according the the business needs, goals, and available resources.
Compensation may be used to:
Recruitment and retention of qualified employees is a common goal shared by many employers. To some extent, the availability and cost of qualified applicants for open positions is determined by market factors beyond the control of the employer. While an employer may set compensation levels for new hires and advertize those salary ranges, it does so in the context of other employers seeking to hire from the same applicant pool. Morale and job satisfaction are affected by compensation. Often there is a balance (equity) that must be reached between the monetary value the employer is willing to pay and the sentiments of worth felt be the employee. In an attempt to save money, employers may opt to freeze salaries or salary levels at the expence of satisfaction and morale. Conversely, an employer wishing to reduce employee turnover may seek to increase salaries and salary levels. Compensation may also be used as a reward for exceptional job performance. Examples of such plans include: bonuses, commissions, stock, profit sharing, gain sharing.
Compensation will be perceived by employees as fair if based on systematic components. Various compensation systems have developed to determine the value of positions. These systems utilize many similar components including job descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include
Different types of compensation include:
Develop a program outline.
Designate an individual to oversee designing the compensation program.
Develop a compensation philosophy.
Conduct a job analysis of all positions.
Evaluate jobs.
Determine grades.
Establish grade pricing and salary range.
Determine an appropriate salary structure.
Develop a salary administration policy.
Obtain top executives' approval of the basic salary program.
Communicate the final program to employees and managers.
Monitor the program.