Delos Reyes, Justine Manuele S.

FM1A
Employee Compensation

Describe and explain the process involved in designing compensation. Explain the connection
of Job Evaluation and competitive compensation.

Compensation in business is an exchange for services, such as getting cash for a well-done job.
Compensation management is the activity of compensating or incentivizing employees for their
performance on the job. It is vital to utilize compensation as a tool to recruit and retain the
highest quality people. Employees are more inclined to work hard if adequately rewarded,
contributing to a friendly work environment. Employee compensation is used by management to
achieve various objectives, including ensuring the long-term viability of a company. The
organization's needs, goals, and resources may necessitate changes in compensation. Employees'
well-being and productivity are directly impacted by their pay, which is both a need and a source
of inspiration in the workplace. Creating a compensation plan that keeps workers happy and
engaged is always the firm's objective. Employees are happy when their remuneration plan meets
or surpasses their expectations. At the same time, it helps the organization realize its overall
goals.

The budget is the first thing that management needs to know. Before a company can pay
its employees, it has to figure out how much money it has to spend. Another thing that
management needs to do is put someone in charge of the company. Many big companies have a
department that pays their employees and a management team that oversees everything. Third,
the jobs should be examined by management. Before you can pay your workers, you must first
determine how much their job tasks or position are worth. This may be discovered through
surveys and statistics from similar firms. The amount of money each job is worth is also
determined by the employee's responsibilities. The next step is to determine the levels. Because
many large corporations have several levels of staff, this is critical. Some of the people you could
recruit are executives, managers, or other firm employees. A wage scale may exist depending on
how many jobs a firm has. After determining how much you are willing to spend, you must
create a compensation package.
 A compensation plan is much more than a salary schedule. Compensation encompasses
work design features and comprehensive benefits such as insurance and vacation, and it provides
enterprises with a vital market tool. No compensation plan is ever created without a great deal of
effort. It must consider the organization's specific needs, the environment in which it operates,
and any applicable local, regional, or national regulations. Compensation schemes must be
reviewed regularly. They should also be designed so that significant adjustments are only
required once in a while. A job assessment is part of a well-balanced compensation package. A
company's compensation system must determine how much one position is worth in contrast to
another—this procedure aids in this regard. When done professionally, it aids in the elimination
of pay inequities that may be generated by illogical pay structures, such as those that may
develop over time if employees do not pay attention to how they are paid.

Many firms do not place a high value on their employees. They are taken for granted
until anything goes wrong with them. People are concerned about their employment. They
significantly influence the amount of money and other perks you receive. Organizations pay for
employees' value on specific activities, responsibilities, and job-related characteristics such as
the working environment. Job analysis, job descriptions, and position appraisal are commonly
used to determine the importance of each job. Job assessment uses work analysis and job
descriptions to determine what a job is like and how much it should pay when comparing
occupations and establishing compensation. It helps management consider how much they
appreciate employees and foster healthy human and corporate ties when done well.