Group 3

Compensation and Benefits

COMPENSATION – Refers to any payment given by an employer to an employee during their period of employment. In return, the employee will provide their time, labor,
and skills. This compensation can be in the forms of a salary, wage, benefits, bonuses, paid leave, pension funds, and stock options and more.
DECISIONS ABOUT PAY – Organizations need to plan what they will pay employees in each job, as an unplanned approach can lead to unfairness, dissatisfaction, and
rates that are too expensive or too low, making it difficult to fill positions.
PAY STRUCTURE – Helps the organizations achieve goals related to employee motivation, cost control, and the ability to attract and retain talented human resources.

TWO ASPECTS OF PAY STRUCTURE

Job Structure - Consists of the relative pay for different jobs within the organizations. It establishs relative pay among different functions and different levels of responsibility.
Pay Level – Is the average amount including wages, salaries, and bonuses the organizations pays for a particular job.

LEGAL REQUIREMENTS FOR PAY – Pay policies and practices in the United States are subject to government laws and regulations, such as equal employment
opportunity, minimum wages. All decisions about pay should comply with the applicable laws.
EQUAL EMPLOYMENT OPPURTUNITY – Employers must not base pay on an employee’s age, sex, race, or other protected status, but instead on job responsibilities or
performance, job descriptions, job structures, and pay structure can help organizations demonstrate that they are upholding these laws. Recent public outcries over the
treatment of women in the workplace have renewed attention to the issue of equal psy.
Closing the Pay Gap
years, accusations against high-profile individuals drew attention to the problem of workplace harassment, especially as experienced by
women. The #TimesUp hashtag on social media signaled that women and men were determined to see change. And along with respectful
treatment, women indicated that they expected equal pay Here are some actions that companies can take to close the pay gap between male
and female workers:

Review pay structures and
payroll data to find any pay gaps
that exists. Good intentions alone
do not ensure that pay is equal. If
the HR department is unaware of
pay disparities and employees
discover them, the situstion is
awkward, because the employees
might suspect that they have
been treated unfairly or that the
company discriminates.
If there are pay gaps, investigate
the reasons. Gaps related to
differences in education,
experience, job duties, and so on
may explain a legitimate pay gap.
Managers should understand and
be prepared to explain such gaps.
They also should ensure they are
doing enough to give employees
proper encouragement to
participate in development
activities. In this way. employees
become eligible for higher pay
because of their growing skills.
Be more transparent about pay
decisions. Most companies are
hesitant to disclose what each
employee earns. For those
reluctant about full disclosure, an
intermediate step would be to
disclose the range of pay for each
type of job
During employee recruiting and
selection, avoid asking candi-
dates about their pay history
These questions, which some
states have outlawed, can have
the effect of locking in past dis-
crimination by building job offers
on existing pay levels, rather than
the new hire's value to the
organization. An alternative is to
disclose the organization's pay
ranges and the criteria for placing
an individual within the range, so
that the candidate can consider
whether the pay is acceptable pay
for each type of job
Economic Influence on Pay
An organization cannot make spending decisions independent of the economy Organization economic must keep costs low enough that they
can sell their products profitably, yet they must ence decisions about be able to attract workers in a competitive labor market. Decisions
about how to respond to the economic forces of product markets and labor markets limit an organization's choices about pay structure.
A Majority of Workers Are Reluctsnt to
Negotiate
A survey by the Robert Half staffing firm
found that the majority of people receiving a
job offer don't try to engage in negotiations
for higher pay More than four in ten men tried
negotiating, but only about one-third of the.
women did. Younger workers were likelier to
negotiate than older ones.
Instinct to hold back makes sense at least start at the new organization. A p son who
some of the time, according to Suzy Welch, excels on the job can the negotiate a raise
writer and former editor-in-chief of Harvard from a position of greater strength.
Business Review. Welch recommends
accepting an offer that is within 10% or 15%
of the desired pay, in order to get off to a
positive
Crowdsourcing Pay Data
The idea of "crowdsourcing" information became well known with Wikipedia Social-media tools have enabled many
other ongoing group projects for gathering, editing, and sharing Information. Not surprisingly considering the
importance of earning money, some crowdsourcing projects focus on gathering data about employees' pay. Jobs
websites such as Glassdoor and PayScale offer crowd sourced pay data, and Indeed includes employee-supplied
salary data as one of its information sources. The primary advantages for users are easy access to the data at a low
cost Popular websites can collect a large volume of responses inexpensively and make the results available
conveniently at little or no cost to the user. Ensuring the quality of crowd- sourced data is difficult, however. If the
numbers come from a self-selecting group of employees, responses may reflect a subset of the population say
employees who are relatively young, come from regions with the most access to computers, or have strong feelings
about their earnings. Perhaps response will come from employees at just one or two companies in an industry. Data
users might not know how old the data are or whether data for a job title take into account other measures such as
years of experience or level of competency. A well-done survey by a professional service could address these
concerns Despite the drawbacks, the use of crowd sourced data is changing the role of pay data in the labor market.
Workers are informing them selves with pay data, so they do not read job offers or evaluate their cur rent pay in a
vacuum Furthermore, the very existence of crowd sourced data creates a climate of greater transparency. Employers
need to recognize that workers, especially in younger generations, expect at least some transparency from
employers Employers not only need to inform themselves about pay levels in the labor market (including the levels
job seekers are reading on crovid sourced websites), but also need to establish pay policies and be able to explain
how they use the policies and data to arrive at decisions about pay. These employer communication skills also are
important for addressing salary-related comments on social media sites if candidate or employee comments about
the company include misinformation, the company may be able to post corrections and clarifications and even flag
inaccurate content for review by the website
Employee Judgements About Pay Fairness
In developing a pay structure, it is important to keep in mind employee’s opinions about fairness. If employees perceive their pay as unfair they may experience
pay dissatisfaction and be less motivated to achieve organizational goals.
Employee Compare Their Pay And
Contributions Against Three Yardstick
1. What they think employees in other organizations earn for doing the same job.
2. What they think other employees holding different jobs within the organization earn for doing work at the same or different levels.
3. What they think other employees in the organization earn for doing the same job as theirs.

Why Pay Fairness is Important?

By ensuring employees are paid equitably, employers can increase efficiency, creativity and productivity by helping to attract the best employees, reduce turnover
and increase commitment to the organization.
Every worker deserves to have a voice and be properly represented and protected. All modern organizations have the responsibility to ensure that all of their
workers are valued and provided with tools and resources to feel secure.
Employee Doubt Their Pay is Fair
A recent survey by PayScale asked more than 500,000 employees about their experiences, and the results painted a dim picture of their
compensation-related perceptions. The survey asked about their pay and perceptions and also compared those responses with the
company's data on market pay. According to the responses, only about one-fifth (19%) believe they are paid fairly.
Many employees incorrectly believe they are underpaid. Often, a reason is that their job titles are inflated relative to work responsibilities, so they are
comparing themselves with the wrong set of employees. Employers are not helpless n. The PayScale survey further reported that only about one-fourth
of employees (23%) see a transparent process for setting pay rates in their organization. This suggests that employers can increase the perception of
fairness by ensuring that fair practices are in place and then communicating about pay more effectively. Employers also can address equity concerns
more broadly, alongside other sources of employee satisfaction. For example, they can provide clear career paths, recognition for accomplishments,
positive relationships with managers, and interesting, meaningful work
Pay Grade and Pay Range

What is Pay Grade?

• PAY GRADE OR SALARY GRADE is a method of categorizing different types of jobs into groups that have the same relative pay rate and
internal worth.
• they are used to determine a standard framework of monetary compensation for both private and public sector organizationsh.
What is Pay Range?
• Pay Range (Salary Range) is a span of numbers from low to high that represents the minimum or maximum wages employers can pay to
an employee.
• • Pay ranges are typically used during the interview or offer phase of the job search process. It is an approximate estimate to help
employers understand what you hope to receive and how you value your worth.
Why are Pay Grades and Pay Ranges
important?
• Pay Grades and Pay Ranges help companies set up fair compensation structures for all employees.

• Pay Grade and Pay Range ensures equal compensation for all employees by setting a standard for pay.
Pay Structure and Actual Pay
• Pay structures, also called salary structures, are organized levels, or grades, of employee salaries divided by job type
• Actual Salary means the regular basic compensation paid or payable to an employee during a calendar year by the Company or an Affiliate

Current Issues Involving Pay Structure

Issues affecting pay structure can hurt or help the organization's ability to recruit, motivate,and keep employees.
Many Employees Need Help to Undersand their
Benefits
In an attempt to entice and keep top talent, organizations are anticipating employees’ needs and offering more comprehensive benefits
packages and perquisites to complement the salary and other financial compensation. However, data shows that the majority of employees
do not understand their benefits or even read benefit materials: Up to 80% of companies reported that their employees do not open or read
benefit materials.