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(Organization Management)

This document provides guidelines on compensation practices including base pay determination, job analysis, pay structures, and performance-based pay such as bonuses and incentives. It discusses determining base pay based on job descriptions and market data, conducting job analyses to evaluate task responsibilities, and establishing pay structures with salary grades or bands linked to internal job rankings. The document also covers pay increases, bonus plans, and incentive programs to supplement base compensation based on goals, commitments, and individual or organizational performance.

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Zaimin Yaz Marchessa
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15 views

(Organization Management)

This document provides guidelines on compensation practices including base pay determination, job analysis, pay structures, and performance-based pay such as bonuses and incentives. It discusses determining base pay based on job descriptions and market data, conducting job analyses to evaluate task responsibilities, and establishing pay structures with salary grades or bands linked to internal job rankings. The document also covers pay increases, bonus plans, and incentive programs to supplement base compensation based on goals, commitments, and individual or organizational performance.

Uploaded by

Zaimin Yaz Marchessa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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IDENTIFY THE

GUIDELINES ON
COMPENSATION/WAVES
AND PERFORMANCE
EVALUATION/APPRAISAL
• COMPENSATION

• COMPENSATION IS A FUNDAMENTAL COMPONENT


OF EMPLOYMENT AND ONE OF THE MOST CRITICAL
HR MANAGEMENT POLICIES. WHILE
COMPENSATION TRADITIONALLY REFERS TO
EMPLOYMENT WAGE, BEST PRACTICE IN TODAY'S
WORKPLACE CONSIDERS TOTAL COMPENSATION TO
INCLUDE BASE SALARY, BONUS OR INCENTIVE
PLANS, BENEFITS, AND NON-CASH COMPENSATION.
• APPROACHES AND TECHNIQUES TO
DETERMINING BASE PAY
• DETERMINING BASE PAY IS DIRECTLY LINKED TO YOUR
COMPENSATION PHILOSOPHY. HAVING A CLEAR UNDERSTANDING
OF WHAT ROLE THE POSITION PLAYS IN THE ORGANIZATION,
INCLUDING THE COMPLEXITY OF THE REQUIRED
RESPONSIBILITIES AND TASKS, IS FACTORED INTO THE EQUATION
ALONG WITH DATA ON MARKET AND SECTOR COMPARATIVES.
ORGANIZATIONS THAT TAKE THE TIME TO ENSURE THEY HAVE
FACTORED IN ALL OF THE FOLLOWING COMPONENTS WILL BE
MORE EFFECTIVE IN MANAGING THEIR COMPETITIVENESS
EXTERNALLY AS WELL AS THEIR CONSISTENCY AND CREDIBILITY
INTERNALLY.
• CREATE JOB DESCRIPTIONS

• JOB DESCRIPTIONS DEFINE THE REQUIREMENTS AND


RESPONSIBILITIES OF A JOB THAT HAS BEEN CREATED TO MEET
AN ORGANIZATIONAL NEED. JOB DESCRIPTIONS ARE AN
IMPORTANT ELEMENT OF YOUR ORGANIZATION’S OVERALL
COMPENSATION PHILOSOPHY WHEN THEY ARE USED TO
DEVELOP A CONSISTENT SALARY STRUCTURE BASED ON THE
RELATIVE LEVEL OF DUTIES, RESPONSIBILITY AND
QUALIFICATIONS OF EACH POSITION IN THE ORGANIZATION.
• CONDUCT A JOB ANALYSIS

• CONDUCTING AN ANALYSIS OF EACH JOB BY


GROUP/DEPARTMENT TO DETERMINE WHICH TASKS ARE
BEING DONE AND BY WHO WILL HELP BOTH IN
DETERMINING IF YOU HAVE THE MOST EFFECTIVE
ALIGNMENT OF TASKS TO ROLES AND IN DEVELOPING
YOUR JOB DESCRIPTIONS. THIS IS IMPORTANT AS
COMPENSATION STRUCTURES ARE BUILT BASED ON THE
LEVEL OF SKILL AND EXPERIENCE REQUIRED FOR A
CERTAIN ROLE TO PERFORM CORE FUNCTIONS.
• PERFORM JOB EVALUATION

• JOB EVALUATION IS THE PROCESS FOR ASSESSING THE RELATIVE


WORTH OF JOBS WITHIN AN ORGANIZATION. PAYING FAIRLY
BASED ON INTERNAL RELATIVE WORTH IS CALLED INTERNAL
EQUITY. A COMPREHENSIVE ANALYSIS OF EACH POSITION’S
TASKS, RESPONSIBILITIES, KNOWLEDGE, AND SKILL
REQUIREMENTS IS USED TO ASSESS THE VALUE TO THE
EMPLOYER OF THE WORK PERFORMED AND PROVIDE AN
INTERNAL RANKING OF THE JOBS.
• REVIEW PAY STRUCTURES

• PAY STRUCTURES ARE HELPFUL WHEN STANDARD YOUR


ORGANIZATION’S COMPENSATION PRACTICES AS THEY REFLECT
THE GROUPING OF JOBS BASED ON RELATIVE WORTH. TYPICAL
PAY STRUCTURES CAN HAVE SEVERAL GRADES OR LEVELS,
CAREER BANDS, OR JOB FAMILIES WITH EACH HAVING A
MINIMUM OR MAXIMUM SALARY ASSOCIATED. THESE COULD BE
IDENTIFIED BY HOURLY WAGES OR ANNUAL SALARIES.
• A NUMBER OF LEVELS MAY EXIST FOR A ROLE OR TYPES OF
ROLES LINKED TOGETHER, AND FOR EACH, A DOLLAR VALUE
WOULD BE ASSOCIATED. CREATION OF PAY STRUCTURES ARE
BASED ON INTERNAL AND/OR EXTERNAL DATA.

• THE MOST BASIC SALARY STRUCTURE IS ONE IN WHICH EACH


JOB CLASS IS A LEVEL WITH A SINGLE SALARY FOR ALL
INCUMBENTS WITHIN THE LEVEL.
• THIS IS SEEN AS SOMEWHAT LIMITED AS EMPLOYEES (OR
POTENTIAL EMPLOYEES) COME WITH A VARIETY OF
EXPERIENCE AND SKILLS AND THEREFORE SHOULD NOT ALL
BE COMPENSATED AT THE SAME RATE.
PAY INCREASES, BONUS
AND INCENTIVE PLANS
• PAY INCREASES

• BASE PAY IS A FIXED REGULAR PAYMENT MADE TO AN EMPLOYEE IN EXCHANGE FOR


PERFORMANCE OF THE DUTIES AND RESPONSIBILITIES OF THEIR ROLE. WHEN AN
EMPLOYEE RECEIVES AN INCREASE TO THEIR BASE PAY, IT IS CONSIDERED A PAY
INCREASE. THERE ARE VARIOUS REASONS AND METHODS FOR DETERMINING AN
INCREASE, BUT THE COMMON FACTOR IS THAT THE INCREASE CHANGES THE LEVEL OF
ONGOING BASE PAY.

• EXAMPLE
1. A COST OF LIVING INCREASE
2. A MARKET ADJUSTMENT
3. A PROMOTIONAL INCREASE
• BONUS PAYMENTS
• BONUS PAY IS COMPENSATION OVER AND ABOVE THE AMOUNT OF
PAY SPECIFIED AS WAGES OR SALARY AND IT IS ONLY DISTRIBUTED
AS THE ORGANIZATION IS ABLE TO PAY OR AS OUTLINED IN AN
EMPLOYMENT CONTRACT.
• BONUS PAY IS USED BY MANY ORGANIZATIONS TO IMPROVE
EMPLOYEE MORALE, MOTIVATION, AND PRODUCTIVITY OR AS A
THANK YOU TO EMPLOYEES WHO ACHIEVE A SIGNIFICANT GOAL.
• AS LONG AS BONUS PAY IS DISCRETIONARY BY THE EMPLOYER, IT
IS NOT CONSIDERED TO BE A CONTRACT. IF THE EMPLOYER
PROMISES A BONUS, THEY MAY BE LEGALLY LIABLE TO PAY IT OUT.
• INCENTIVE PLANS

• INCENTIVE PLANS HAVE NOT TYPICALLY BEEN POPULAR IN THE NONPROFIT


SECTOR. HOWEVER, LEADERS ARE STARTING TO SEE A CHANGE IN PERSPECTIVE
REGARDING THE USE OF INCENTIVE PLANS. PROVIDING INCENTIVE PLANS,
ESPECIALLY TO SENIOR LEVEL STAFF, CAN ENABLE ORGANIZATIONS TO COMPETE
FOR TALENT THEY WOULD OTHERWISE HAVE NOT BEEN ABLE TO PURSUE.
• INCENTIVE PLANS ARE ESTABLISHED TO REWARD EMPLOYEES FOR IMPROVED
COMMITMENT AND PERFORMANCE AND AS A MEANS OF MOTIVATION

• AN INCENTIVE PLAN IS DESIGNED TO SUPPLEMENT BASE PAY AND FRINGE BENEFITS


• A FINANCIAL INCENTIVE PLAN MAY OFFER A PERCENTAGE OF BASE SALARY OR A
CASH BONUS WHEREAS A NON-FINANCIAL INCENTIVE PLANS OFFER BENEFITS SUCH
AS ADDITIONAL PAID VACATIONS OR INCREASED PROFESSIONAL DEVELOPMENT
PREPARED BY:

• LENLLY ANN TUGADO


• RENALYN O. NALUPANO
• GARY VHON BURGOS

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