Human Resources Management (HRM)

You are the human resources (HR) manager for a technology company that provides technical support for hospitals using computer systems that share information. Your company has just been awarded a new contract that is requiring a huge increase in the organization’s workforce. The contract will involve providing technical support for several large hospital systems in the Midwest. As a result, you have been asked to outline the process that you will use to develop an internally consistent compensation system and present it to the owners of the company for approval.
Create a two-page essay in which you address the following issues:
Describe the reasons why an internally consistent compensation system is necessary.
Outline the process involved in creating an internally consistent compensation system.
In the introduction to your essay, create a fictional name and location for your company.
Make sure that your essay includes enough information to convince the owners that the time, effort, and manpower that this process will take will be worth it to the company in the long run. Adhere to APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed.

ANSWER

Internally Consistent Compensation System

Introduction

Internally Consistent Compensation System clearly describes the comparative value for each occupation among all positions within the corporation. The internal consistent compensation system approach leads to the development of job structure and hierarchy which is grounded on the comparison of each job against the other within the company (Al-nasser, 2016). Lone Tunes Corp will build an internally consistent compensation system that will be used to determine the worth of each job within the company. The system may cut or downsize expenses through merging jobs which will be done after gaining insight into the responsibilities and qualifications that are required for each job. Implementing this system will enable the company to effectively understand the pay structures, compensable factors, and pay grade definitions.

The internally consistent compensation system ensures that all jobs are well specified and clearly defined with a hierarchy structure. The compensation system will enable the company to realize the working conditions and differences in job characteristics within the company. Internally consistent job structures validly categorize the different job characteristics which allow the compensation managers to set pay consequently. For instance, the compensation managers generate internally consistent job arrangements through using job evaluation and job analysis.

The job analysis reveals the duties as well as the compensation factors such as effort and skill which are needed to sufficiently perform a task (El-Hajji, 2011). The outcomes of the job analysis are essential in conducting the job evaluation. Ideally, the job evaluation develops the pay differentials for jobs within a company. The results of the job analysis enable the compensation managers to set pay rates through quantifying and examining the main differences and similarities between jobs.

An internally consistent compensation system has the capability of reducing the flexibility of the company to react to changes in pay structures and practices of rival companies. This is because the job analysis develops structured job structures and job descriptions. The compensation system enables fair benefits and compensation (Buller and McEvoy, 2012).  For instance, job positions that demand extensive qualifications need to be compensated higher than the positions that demand fewer qualifications. Through having the compensation system, the company will ensure that fairness is achieved which will directly influence the performance levels, employee conduct, financial performance, productivity, and turnover rates.

Various steps need to be followed to create an effective internally consistent compensation system. The first step is to conduct an internal analysis for the company to determine the needs and satisfaction of the employee’s compensation with the current system. The second step entails conducting an external evaluation which includes understanding other companies and industry compensation plans. The third step includes identifying and deciding on the company’s desired goals, outcomes and objectives in terms of the compensation system. The fourth step is creating a compensation plan which may involve conducting a job analysis, creating a new pay scale, setting the criteria for salary increment. The final step will be approving the internally consistent compensation system. This will enable the company to achieve its goals through compensating employees effectively in a way that they are competitive and align with the objectives of the organization.

Conclusion

In summation, the company will rely on the internally consistent compensation system to guarantee that employees with similar experience, qualifications, and compensable factors are compensated equally. Considerably, the system will promote fairness among employees and acknowledge the variation in job hierarchy and structure which will enable the compensation managers to set pay rates accordingly.

References

Al-nasser, A. (2016). The effective compensation system in organizations. IOSR Journal of Business and Management, 18(11), 85-88.

Buller, P. F., & McEvoy, G. M. (2012). Strategy, human resource management, and performance: Sharpening line of sight. Human resource management review, 22(1), 43-56.

El-Hajji, M. A. (2011). Wage consistency in the context of job evaluation: An analytical view. International Journal of Business and Social Science, 2(10).