Compensation Administration: What you need to know

What is a compensation administration program? A formal compensation administration program is the basic management tool for ensuring that employees are satisfied, that both internal and external equity are maintained, and that control is maintained over compensation costs. Such a program will help attract top talent, retain core employees, and encourage longevity while efficiently using financial resources. Establishing an effective compensation administration program requires job analysis, job evaluation, and job pricing. Once established, it is important to maintain and update the following aspects of the program: salary banding, employee classification, salary increases, performance appraisals, and longevity increases.
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Each job in the organization should be thoroughly analyzed and described. Your job description should state clearly and simply:
• Who does the work (including the qualifications, education, and job skills required)
• What the work entails
• Where the work is performed
• When the work is done (hours, how often, or what times of year)
• Why the person does the work (why is the job essential to the company)
• How the job is accomplished
For the purposes of the Americans with Disabilities Act, it is appropriate and necessary to list the essential and nonessential functions of the job in case someone asks for a job accommodation for a covered disability.
Here are five job description summaries in the engineering series, for discussion purposes:
Job Title Job Description
Junior Engineer Performs routine engineering tasks using standard procedures. Applies limited judgment under direct supervision.
Engineer B Designs and develops major ...

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Redi2 Use Library Compensation Checklists
Compensation Management is complex but using checklists to monitor and implement policies will make it easier. "
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