COMP- INTERNAL EQ I

COMP- INTERNAL EQ I - INTERNAL EQUITY AND JOB EVALUATION...

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HOW CAN A FIRM ALLOCATE ITS COMPENSATION BUDGET TO DIFFERENT JOBS IN PROPORTION TO HOW IMPORTANT EACH JOB IS TO THE FIRMS BUSINESS UNIT OBJECTIVES, AND ALSO BE FAIR TO THE EMPLOYEES IN THOSE JOBS? 1. Compensable Factors (CF): Those attributes of a job (Not a person within the job) that the organization decides that it values (helps them achieve their organizational objectives). Therefore the organization wants to allocate its compensation budget in proportion to how much of the CF exist in each job. CF include both KSAs and TDRs. 2. Job Evaluation is a means of allocating compensation dollars among jobs within a given pay system. Job evaluation also relates the firm’s jobs and its compensation structure to relevant external labor markets. 3. Internal Equity (Fair or consistent pay) is based on a constant ratio of $/Job Evaluation Points (Amount of Compensable Factors) A TYPICAL JOB or PAY STRUCTURE Pay ($) Firm Pay Line Max Min. Concept: Amount of C. F.
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COMP- INTERNAL EQ I - INTERNAL EQUITY AND JOB EVALUATION...

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