4 Universal Compensable Factors: Skill, Effort, Responsibility, & Work Conditions - Essay Sample

Introduction

There exist four universal compensable factors, namely, skill, effort, responsibility, and working conditions. Skills involve the experience, training, ability, and education needed to perform a specific job. Capabilities refer to education level, years of experience, technical knowledge, specialized knowledge, specialized training, and interpersonal skills of the candidate. The effort involves the extent of physical and mental energy required while executing a job (Amadi, 2016). It refers to the diversity of duties, complexity of responsibilities, the creativity of thinking, analytical problem solving, physical application of skills, and degree of assistance accessible to the employee. Besides, accountability refers to the level to which a worker expects an employee to carry out a job with a greater focus on the job requirements. Aspects of responsibilities include decision-making authority, the scope of the organization, level of integration of work with other coworkers, the influence of failure or the risk of the job, and the ability to execute without supervision. Furthermore, working conditions refer to the difficulties or unhealthy aspects of the working environment, such as hazards and physical surroundings of the job. The purpose of this paper involves the analysis of compensable factors in compensation management.

Compensable Factors Based on Benchmarks Jobs

The benchmark jobs have specific characteristics, such as equitable pay (not overpaid or underpaid) and range of factors (since every element defines whether the situation occurs at the low end or the high end of the factor). The jobs get priced, and the total wage divided into remuneration for each element (Amadi, 2016). The process determines the rate of pay for each component for each benchmark job. Slight modifications of the matrix ensure equal dollar weighting of the factors. Other occupations should compare from the model to determine the rates of pay for each element and summed to establish the rates of pay for each of the different jobs. The table below illustrates compensable factors based on benchmarks jobs.

Table 1: Job Evaluation: Factor Comparison

Compensable Factor Degree

In quantitative job evaluation schemes, compensable factor degree describes procedures employed to measure and recognize specific levels of the remuneration factor. Echelons within a compensation element that defines a range from the minimum amount of remuneration factor that occupation requires the highest amount of compensable factor needed for the job refers to the degree level. For example, a position that requires someone to execute supervisory duties over others receives a lower degree level rating than an occupation that needs supervision of a particular unit or department (Amadi, 2016). Besides, a career that requires general management over numerous groups obtains a higher degree level rating than a work that entails supervision of a small number of permanent workers. Each degree level within a compensable factor has an associated number of job evaluation points that, when summed for each occupation, builds an internal hierarchy of jobs and, utilized in combination with salary survey information, helps in establishing the salary range of a job. The degree factor ruminates only the minimum necessities and vital tasks and responsibilities of the situation, not the aspects of the individual in the post.

Determining Compensable Factor Weight

In a job assessment scheme, compensable weight factor refers to the percentage, weight, or impact that every compensation factor in an occupation gets allotted. Most programs have extra precise weighting. All elements cannot have a similar amount of levels since some aspects have a more considerable distinction than others. The result means more weighting in favor of such features with more levels, which may require modification. Organizations also put various standards on diverse factors, subject to the nature of the company. The weighting framework consists of a maximum of 1,000 points (Kahya, 2018, pp. 720-729). The number of points obtainable for each element gets spread between the levels on an ascending whole number basis.

Point Value for the Compensable Factors

Point value evaluation refers to the organized bureaucratic way for determining a relative score for a job. Classification of various occupations using point value helps in determining remuneration. Point value compensable factors involve categorizing the elements, such as 'knowledge.' Further subdivisions ensure the distribution of the points (Kahya, 2018, pp. 720-729). Each consideration and sub-factor get allocated a weight, which influences the input made to the general tally by that factor. Factors get weighted according to their importance to the company. The company's strategy, therefore, associates closely with the compensation scheme.

Verification of Factor Degrees and Point Value

A compensation strategy outlines a company's perspective on how employees' compensation gets calculated. It aligns the entire compensation packages to the organization's goals and operations. The compensation framework forms the basis of the company's plan. With a robust scheme in place, the firm can easily make better decisions regarding compensation. In the modern world, with high competition for talent, workers have more negotiating command and greater access to payment data (Kahya, 2018, pp. 720-729). The organization must, therefore, get compensation right since what the firm pays, how it pays, and why it pays the way it does influence the capacity to maintain and entice top talent. Compensable factors thus impact on the organization's culture, staff contentment with their jobs, and the overall performance of the company. The hierarchy of the task, therefore, influences the company's strategic plans.

Job Evaluation Committee

The purpose of the Job Evaluation Committee involves providing a proper and neutral assessment of all positions offered to the Committee. The Committee oversees the job assessment procedures. The Committee maintains comprehensive information of the identified job assessment methodology and ensures the facilitation of training to vital shareholders on the job assessment methodology (Kahya, 2018, pp. 720-729). Besides, they keep the confidentiality of material received and addressed by the Committee. Furthermore, they carry out an oversight role to ensure that a suitable job assessment procedure and practices are functional, and guide and supervise any other issue concerning job appraisal. The Committee members consist of the head of the human resource department (chairperson), department representatives, and Committee secretary.

The company appoints the Committee members for one year. The process of job evaluation consists of a clarification on the purposes and uses of the program to executives, focusing more on the benefits. The job evaluation process also requires the establishment of a job evaluation committee to assess critical jobs in the company (Kahya, 2018, pp. 720-729). The job evaluation committee must identify the tasks that need evaluation by ensuring that the job suits the kind of work carried out in the specified department. Besides, the job evaluation committee must then prepare an active job description. Furthermore, the Committee must then identify the method of job evaluation through the consideration of company culture, and the capacity of the compensation and benefits.

Conclusion

Compensation refers to the logical tactic employed to offer financial value to workers in exchange for duties undertaken by them. Benefit enhances recruitment, job satisfaction, and employee productivity. Job evaluation involves an orderly manner of establishing the worth of a job concerning other jobs in the company. Job evaluation assists in designing a compensation strategy, and it differs from job analysis. The ever-shifting employment environment, such as in technology, products, and services, among other aspects, requires constant and continuous review of jobs

References

Amadi, U.B., 2016. Job Evaluation: A Tool for Wage/Salary Determination in Orgarnizations (Doctoral dissertation). Retrieved from http://196.222.5.9/handle/123456789/2811

Kahya, E., 2018. A wage model consisted of job evaluation employee characteristics and job performance. Pamukkale Universitesi Muhendislik Bilimleri Dergisi, 24(4), pp.720-729. Retrieved from https://dergipark.org.tr/en/pub/pajes/issue/38891/454107