University of Cebu

Cebu City
Graduate School

Course Title : Human Resources Development

Assignment No 5
Course No. : BM 212
Schedule : Fridays, 5:31PM to 8:31pm
Professor : Dr. Ily Abella
Reported by : Guendolen H. Maraño

Compensation and Benefits

1. Discuss the role of HR in compensation and benefits ?

Ans:

Human Resources (HR) plays a crucial role in managing compensation and benefits within an
organization. HR professionals are responsible for designing, implementing, and administering
compensation and benefits programs that align with the company's overall strategy and
objectives.

In terms of compensation, HR ensures that employees are fairly and competitively compensated
for their work. This involves conducting market research to determine appropriate salary ranges
for different positions, considering factors such as industry standards, job responsibilities, and
geographic location. HR also manages the process of setting individual employee salaries, taking
into account factors like performance, experience, and tenure.

Additionally, HR oversees the administration of employee benefits programs. This includes

providing information and guidance to employees regarding available benefits, such as health
insurance, retirement plans, paid time off, and other perks. HR professionals also handle the
enrollment process, manage employee records, and ensure compliance with legal requirements
related to benefits.

Furthermore, HR plays a role in evaluating and adjusting compensation and benefits programs
over time. They monitor market trends, assess the effectiveness of existing programs, and make
recommendations for improvements or changes. HR may also conduct surveys or gather
feedback from employees to understand their needs and preferences, ensuring that the
compensation and benefits offerings remain competitive and attractive.

Overall, HR's involvement in compensation and benefits is essential for attracting and retaining
talented employees, promoting employee satisfaction and engagement, and ensuring
compliance with relevant laws and regulations.

2. What are the methods in determining compensation and benefits?

Ans:

a. Job Evaluation: This method involves assessing the relative value of different jobs within the
organization. Job evaluation considers factors such as job responsibilities, required skills and
qualifications, and the level of decision-making authority. It helps establish a hierarchy of jobs
and determines appropriate compensation levels based on job worth.

b. Market Analysis: Conducting a market analysis involves researching and comparing

compensation levels and benefit offerings for similar positions in the external job market. This
helps organizations understand the prevailing market rates and ensure their compensation
packages are competitive to attract and retain talent.

c. Performance-Based Pay: Performance-based pay links compensation directly to an employee's

performance. This method may involve setting individual performance goals, conducting
performance evaluations, and rewarding high performers with bonuses, incentives, or merit-
based salary increases.

d. Salary Surveys: Organizations often participate in salary surveys conducted by industry

associations or consulting firms. These surveys provide benchmark data on compensation levels
for various job roles and industries, helping organizations make informed decisions about their
compensation structures.

e. Cost of Living Adjustments (COLA): COLA is a method used to adjust compensation based on
changes in the cost of living. It takes into account factors such as inflation rates and regional
cost-of-living differences to ensure that employees' purchasing power is maintained over time.

3. What are the factors to consider in determining compensation?

Determining compensation involves considering several factors to ensure fairness and

competitiveness. Here are some key factors that organizations typically take into account:

a. Job Responsibilities: The nature of the job and its level of complexity, required skills, and
responsibilities are important factors in determining compensation. Jobs that require specialized
knowledge or expertise may warrant higher compensation.

b. Market Research: Conducting market research helps organizations understand the prevailing
salary ranges for similar positions in the industry and geographic location. This information helps
ensure that compensation remains competitive and attractive to potential candidates.

c. Internal Equity: Internal equity refers to ensuring fairness and consistency in compensation
within the organization. Factors such as job levels, hierarchies, and internal pay structures are
considered to maintain a sense of fairness among employees in similar roles.

d. Employee Experience and Performance: An employee's experience, qualifications, and

performance are often taken into account when determining compensation. Those with more
experience or exceptional performance may be eligible for higher compensation.
e. Organizational Budget: The financial health and budgetary constraints of the organization play
a role in determining compensation. The organization's ability to allocate resources towards
compensation is considered to ensure sustainability.

f. Industry and Economic Factors: Economic conditions, industry standards, and market demand
for specific skills can influence compensation decisions. Organizations may adjust compensation
based on these external factors to attract and retain talent.

g. Legal and Regulatory Requirements: Compliance with labor-laws, minimum wage regulations,
and other legal requirements is crucial when determining compensation. Organizations must
ensure that their compensation practices align with applicable laws and regulations

4. What is your stand on whether or not compensation shall be transparent or

confidential?

Transparency in compensation can promote fairness and trust within an organization. When
employees have access to information about salary ranges and how compensation decisions are
made, it can help reduce perceived inequalities and foster a sense of equity. Transparent
compensation practices can also encourage open conversations about pay and provide
employees with a better understanding of how their contributions are valued.

On the other hand, maintaining confidentiality in compensation can be important for various
reasons. Some organizations believe that confidentiality protects employee privacy and prevents
potential conflicts or resentment among colleagues. Confidentiality can also be necessary in
industries where salary information is highly sensitive or competitive, such as in sales or
executive positions.

Ultimately, the decision to have transparent or confidential compensation practices is up to

each organization. It is important for companies to carefully consider their unique
circumstances, legal requirements, and the potential impact on employee morale and trust.
Striking a balance between transparency and confidentiality may involve finding ways to provide
employees with a clear understanding of how compensation decisions are made while
respecting privacy concerns.

5. How do you assess your organization s' compensation and benefits administration in
promoting equal opportunities?

Ans:

Assessing an organization's compensation and benefits administration in promoting equal

opportunities requires a comprehensive and systematic approach. Here are some key steps that
can be taken:

a. Review policies and practices: Evaluate the organization's compensation and benefits policies
to ensure they are fair, transparent, and free from any discriminatory practices. This includes
examining factors such as pay equity, job evaluation methods, and promotion criteria.
b. Conduct pay equity analysis: Analyze compensation data to identify any potential disparities
based on gender, race, or other protected characteristics. This analysis helps to identify any pay
gaps that may exist and allows for corrective measures to be taken.

c. Ensure diversity and inclusion: Assess the diversity and inclusion efforts within the
organization to determine if they are effectively promoting equal opportunities. This includes
examining recruitment and hiring practices, career development opportunities, and employee
resource groups.

d. Provide training and education: Offer training programs to HR professionals and managers on
topics such as unconscious bias, diversity, and inclusion. This helps to raise awareness and
ensure that decision-making related to compensation and benefits is unbiased and equitable.

e. Seek employee feedback: Conduct surveys or focus groups to gather feedback from
employees regarding their perceptions of compensation and benefits fairness. This feedback can
provide valuable insights into areas that may need improvement and help identify any potential
issues or concerns.

f. Regularly review and update policies: Continuously monitor and review compensation and
benefits policies to ensure they remain aligned with best practices and legal requirements. This
includes staying updated on changes in legislation related to equal opportunities and making
necessary adjustments to policies and practices accordingly.