A worldwide compensation system must strike a delicate balance between suitably paying and motivating staff and keeping corporate ' expenses under control.
Developing a comprehensive worldwide pay system for staff is one of the most essential difficulties confronting global human resource management due to the significant expenditure required.
Companies must design employee pay plans that align with their business strategy. Companies that build comparable compensation systems and define a clear global pay philosophy are better positioned to effectively implement their strategy. An efficient compensation approach ensures pay management consistency and supports worldwide employee mobility.
Compensation Plan
1. Develop a program outline.
Set an objective for the program.
Establish target dates for implementation and completion.
Determine a budget.
2. Designate an individual to oversee designing the compensation program.
Determine whether this position will be permanent or temporary.
Determine who will oversee the program once it is established.
Determine the cost of going outside versus looking inside.
3. Develop a compensation philosophy.
Decide what, if any, differences should exist in pay structures for executives, professional employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus no contingent pay).
Determine whether the company should set salaries at, above, or below market.
Decide the extent to which employee benefits should replace or supplement cash compensation.
What are the regulations that affect the compensation program? (FLSA)
4. Conduct a job analysis of all positions.
Conduct a general task analysis by major departments. What tasks must be accomplished by whom?
Get input from head of departments to determine the organizational structure and primary functions of each.
Decide which job classifications should be exempt and which should be nonexempt.
Finalize and document all job descriptions.
5. Determine grades.
Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and assign a grade to each level.
Determine the number of pay grades, or monetary range of a position at a particular level, within each department.
6. Establish grade pricing and salary range.
Establish benchmark (key) jobs.
Review the market price of benchmark jobs within the industry.
Establish a trend line in accordance with company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).
7. Determine an appropriate salary structure.
Verify the purpose, necessity, or other reasons for maintaining a position.
Meet with the compensation committee for review, adjustments, and approval.
8. Develop a salary administration policy.
Develop and document a strategy for merit raises and other pay increases, such as cost-ofliving adjustments, bonuses, annual reviews, and promotions.
Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit raise schedule).
9. Obtain top executives' approval of the basic salary program.
Present data to the compensation committee for review, adjustment, and approval.
Present data to the executive operating committee (senior managers and officers) for review and approval.
10. Communicate the final program to employees and managers.
Develop a plan for communicating the new program to employees, using slide shows or movies, literature, handouts, etc.
Make presentations to managers and employees. Implement the program.
Design and develop detailed systems, procedures, and forms.
11. Monitor the program.
Monitor feedback from managers.
Make changes where necessary, find problems in the program and adjust where necessary.
Project Guidelines o The project should be a minimum of 10 pages.
o Plagiarism is not allowed at all. o A Final written assessment will be required.
