Hrm Compensation Plan – Total Compensation Plan Internal – External
Total Compensation Plan Internal/External
Total compensation plan programs focus consists of two major areas; First, how is to build an organizations strategy that attracts, motivate employees, and at the same time offer’s control through specific plans in organizational culture. Second, is to create a dynamic model to follow for organizations to maintain, and progress through a competitive edge in a business modeling. Benefiting from external equity an organization must structure comparable benefits plan, identify comparable employee’s roles, and responsibilities. With such goals and responsibilities external factors such external organizational factors within the compensation approach plan need development, components, and legal compliance. Human resources professionals have debated the years on internal and external performance for an organization to determine internal pay structures, levels of reporting relationships, and differentials within. Internal equity is the fundamental rule focused on compensation plans to support structures that formally recognize wage and job duties. For example, certain set of skills required for certain job position will have a higher value, and pay scale. This can lead to average base pay between two different set of job functions or duties. Internal equity simplifies the fairness of the given pay structure. This paper will identify internal and external equity control for organization, focus on advantage and disadvantages in total compensation relating to organizational financial structure
The most common sources for internal consistence are to identify organizational job rankings, and the reason behind the job’s worth to its employer. To begin with explaining how a job is socially constructed, how the pay is based upon job functions and how the employee is compensated. Identifying external labor markets govern internal compensation plans, the pricing, and allocation of labor is governed through internal procedures. Developing organizational mission, goals allows the organization to enforce, and effectively communicate the employment relationships about how it will benefit parties involved. Internal controls have organizational mandates; organizations have legal mandates, the Equal Employment Opportunity Commission (EEOC,) view compensation plan guidelines that consist of fair and accurate pay without discriminatory actions. Organizations that perform internal analysis must comply with Federal, and State Laws to increase awareness techniques. Employers must identify two important steps within the internal environment. First, legal consider, under equal pay law, and interpret such laws; for example, American with Disability Act (ADA,) to establish proper training, and employee development. The advantage to internal equity is motivation, if employees hold a better perception to pay scales that leads to a healthy satisfaction levels for organization within.