Compensation specialists generally have knowledge of compensation and employee benefits, which is why human resources departments at time merge compensation and benefits into one departmental function.
Fremont, CA: Industry 4.0 is the ongoing fourth revolution of automating traditional manufacturing and industrial practices using smart technology. It connects physical production and operations with machine learning, big data, and smart digital technology to develop a comprehensive and improved connected ecosystem for companies in the human resources space.
Compensations are financial payments like wages, salary, bonus and incentive payments, raises, and company stock awarded to employees. Compensation specialists generally have knowledge of compensation and employee benefits, which is why human resources departments at time merge compensation and benefits into one departmental function.
Here are four challenges of compensation management
Human Resources Budget
It has been claimed that the HR budget allocation is low because it is not a revenue-producing department, and as such human resource compensation specialists and HR department leaders sometimes have to work within budget limits. To warrant for a budget increase, proof of ROI in the HR department activities is needed.
Competency-based pay is a system that rewards according to the use of competence without consideration for results. This system focuses on individuals as individual performance depends on having relevant competencies and higher competence levels, which results in higher performance.
Job-based compensation structure
A job-based compensation structure is where the job becomes part of the determining base pay. Human resource professionals maintain minimum and maximum payment amounts for each job and compensate employees according to their performance, determined by employee job evaluation. It is an easy structure to manage as it emphasizes on assigning the pay systematically and making sure that the most critical jobs are paid more.
Salary and Wage Levels
To attract qualified candidates, organizations need to provide a significant competitive wage as the base amount primarily appeals to job seekers. Potential applicants want fair wages, one where a job offer comes with an attractive benefits package. Compensation specialists examine competitors’ wages, labor market trends, and employment levels to create compensation policies.