Compensation and Benefit Systems: setting the stage for compensation

Name: University: Course: Tutor: Date: Compensation and benefit systems Compensation and benefit systems are significant components in human resource management (HRM) especially in the modern corporate world. The system used by a company to compensate its employees determines its ability to retain competitive advantage and attain organizational goals. Compensation pay allocations have to balance among bases for pay, active strategic analysis and contextual factors so as to establish coherent policies and relationships pertaining to how much a person is supposed to be paid and how well he performs. Bases of pay is influenced by the amount of salary which prevails at the labor market, the length of tenure and the ranges of salaries set by polices of the company (Martocchio 23). There are several contextual factors which have to be analyzed when determining compensation allocations. For instance, the amount paid to a CEO can be broken down to three categories. They include profitability and returns, r...