Reasons for Internally Consistent Compensation System

Employee Compensation Programs
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Employee Compensation Programs
Reasons for Internally Consistent Compensation System
Internally consistent compensation systems are necessary for every organization by ensuring that the relative value of every job is defined within an organization. Martocchio (2017) notes that a job structure or hierarchy is created when the relative value of every job among all jobs in a company is defined. Additionally, having internally consistent job structures that officially distinguish the differences in the characteristics of each job allows compensation managers to set employee salary accordingly. Internal consistency enables compensation managers to offer more pay to jobs that require higher qualifications, more complex skills, and have more duties and responsibilities than jobs that require less-qualified personnel, simpler work skills, and have few duties and responsibilities (Martocchio, 2017, p.120). Establishing internally consistent compensation systems enables compensation experts and HR professionals to create internally consistent job structures for the benefit of every employee.
Creating an Internally Consistent Compensation System
Creating internally consistent job structures involves the processes of job analysis and job evaluation. Job analysis is a process that consists of collecting, recording, and analyzing data with the aim of describing jobs. Job analysis involves describing job responsibilities and specifications, as well as the working conditions. Job responsibilities refer to the content of the job which involves defining the actual activities that workers are required to perform on the job (Martocchio, 2017, p.122). Job specifications detail the least qualifications, knowledge, skills, and abilities needed by employees to perform a given job. Working conditions refers to the physical environment or the social setting where the job will be conducted (Martocchio, 2017,...