In: Business and Management

Submitted By ayeshashimu
Words 3124
Pages 13
A. Compensation & Benefit Package:
Competitive pay is the most recognizable part of a company's compensation and benefits package, and it's key in gaining and maintaining an advantage in the marketplace. Some of the first tools used to gain that advantage are market salary reports, which are used to determine the going market pay rate in similar companies and industries. When trying to keep up with market salary reports and the going market rates, small to medium-size businesses are sometimes at a disadvantage. Why is that? For one thing, the uniqueness of job roles within smaller companies can make it difficult to compare job responsibilities in the market and obtain suitable salary comparison data. A company's degree of competitiveness and ability to pay what the market bears can be another challenge. But the going market rate must be considered in an effort to achieve and maintain external equity. If a business owner concerned with retaining top talent, must consider the compensation practices of other companies in your industry as a tool for reducing both turnover and recruiting costs. Especially in a business where employees believe they can receive better pay for performing the same work somewhere else, there's little incentive to stay with an employer; therefore, you must be concerned with external equity. Factors within a company must also be taken into consideration when you're addressing compensation issues. Internal equity seeks to place the same value on jobs that are similar in nature, responsibility and requirements. Jobs requiring greater skills or more responsibility are seen as more valuable than lower-skilled jobs. But remember, how your employees view their compensation is just as important as the compensation package itself. The potential exists for pay programs to be misunderstood or characterized as unfair, subjective or downright unlawful. In…...

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