Compensation and Benefits programs begin with a philosophy & leadership.

 Extra pay for extra work/promotion/training.

The step in formulating a compensationplan/compensation programme are as below :

1. Job analysis
2. Job description
3. Job specification
4. Compensation factors and value of all jobs
5. Job clasification and title
6. Marketing survey to determine external rates of pay for comparable positions and grades.
7. Establish pay range based on:
 Performance
 Experience
 Senistry

Job analysis

 is a process that tries to presemt a picture of how the world of working for a specific job.
 Breakdown of one job clasification into units.
 Identifying the rask that make up each unit.

Job description

 Describe what the job is?

 Explain in what the employee is suppose to do?
 How to perform job dutties.

Job specification

 Knownledge,skills,abilities,work experience,education,training.

Two component.

1st direct compensation

 Base amount for a particular job that maybe incrementory increased. (wages/sales/fixed
pay)

2nd direct compensation

 Pay incentive (reward employees for good performance example like bonus & profit sharing.
)

*both compensation decide by Human Resource Professional and managers.