Compensation: What Is Fair and Equitable?

...

- “Determine what the compensation package needs to do to help the organization succeed.

- Recruit new employees

- Motivate current employees

- Reward well-performing employees

- Encourage loyalty

- Use one or all of the above” (Fogleman)

- “Compare current compensation with that of other organization within the market.

- Determine the components that will go into the compensation package.

- Hourly wages or salary

- Merit pay, incentive pay, seniority pay

- Other benefits (flextime, overtime, child care, etc)

- Health insurance

- Job analysis and performance criteria

- Performance appraisals

- Make sure compensation package is in compliance with local and federal laws.” (Community Foundations of Canada)

Evaluating all of these different areas will enable an organization to design and implement a clearly outlined compensation package that fits their organizational needs.

Deciding which benefits to offer employees is not an easy task. There are steps organizations can take to help them decide what benefits work best in their compensation package:

- “Evaluate current compensation methods

- Talk to employees about their compensation needs

- Evaluate jobs

- Align benefits package with organizational objectives” (Fogleman)

If employers take the time to evaluate the needs/wants of their employees, as well as align those benefits with their bottom line, they can create compensation packages that fulfill employ needs, make them feel more valued and perceive their compensation as fair and equitable and remain successful in the market.

Once a compensation package is in place, it is important to review it regularly to ensure it is equitable and competitive, and make changes when needed. It is important for organizations to be flexible and creative when it comes to their compensation packages because, “No matter what compensation method is used, they all carry a message and ultimately reflect how an employee is valued.” (Fogleman)

Works Cited

“Compensation and Benefits.” Community Foundation of Canada. Retrieved August 27, 2015

Fogleman, Sarah. “Creative Compensatio.” Western Dairy Business Magazine. Retrieved August 27, 2015

Martocchio, Joseph J. Strategic Compensation: A Human Resource Management Approach. 8th ed. New Jersey: Pearson Education, Inc. 2014

Romanoff, Kent, Boehm, Ken and Benson, Edward. “Pay Equity: Internal and External Considerations.” Retrieved August 27, 2015

...