Business & Finance Careers & Employment

5 Factors That Determine the Levels of Compensation in a Business

Workers need to meet acceptable performance levels to receive salary increases.
The clocking-in machines are normally used to determine the number of hours worked and after considering the number of hours worked, the levels of compensation can be determined.
Other factors used in determining the levels of compensation include: · Business needs This refers to the organizational, human and financial resource requirements that have a direct bearing on the agency's mission.
These include changes in the duties of the employee, abilities and responsibilities of the employee.
Management needs to focus on the impact and significance of the employee or position on the department and organizational unit.
Answers will need to be derived about the contribution of the candidate or position that helps the organization to meet its mission and goals.
Answers will also be derived about the organizational consequences in case the candidate is not hired.
Furthermore, an explanation will need to be given as to what makes the candidate a good choice.
· Education & work experience The education & work experience determine the compensation levels.
The education refers to the earned academic credentials (such as the high school diploma, bachelor's degree and specific advanced degree).
The work experience refers to the individual's employment history (i.
e.
the job title held, corresponding description of tasks performed, duties and responsibilities).
· Knowledge, abilities, skills & competencies The knowledge entails the acquired principles as well as practices of a particular job while the abilities refer to the acquired dexterity, observable behaviors or talent.
The skills refer to the acquired psychomotor behaviors, such as the operation of a personal computer while the competencies include the knowledge, underlying behaviors and knowledge that relate to the successful performance of a job.
The knowledge, abilities, skills & competencies play an important role in determining whether one deserves a pay rise or not.
· Performance The performance of the worker needs to be determined in determining their pay.
Their current and/or previous outcomes or work accomplishments is normally taken into consideration.
The worker must meet the acceptable work performance levels to benefit from management-initiated salary increases.
· Training, certification & license This refers to the employee qualifications or job requirements that are highly desirable or relevant to a particular job.
The training, certification & license will influence the salary payable.
Training refers to the specialized course that one has outside the recommended academic degree program, such as in-service training.
The certification entails the specialized area of study leading to a certification upon the successful completion, such as a certified professional accountant.
The license is a credential to practice a particular occupation, such as a registered nurse, physician or pharmacist.

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