Running head: Career development plan IV ? Compensation
Sharon Bellinger
University of Phoenix
Deborah Jones MS
HRM 531
November 3, 2008
Career Development Plan- Compensation
“ Compensation” is a buzzword that prompts employees to think how is my employer going to compensate me for my hard work and dedication. “ Compensation, which includes direct cash payments, indirect payments in the form of employee benefits, and incentives to motivate employees to strive for higher levels of productivity” (Cascio).
Before InterClean can implement a compensation plan for the new team, the company must consider what the company can afford to pay in relation to pay scale, and company competitiveness. InterClean will need to be objective when instituting the new pay system, and areas of fairness and equity will be assessed. The three areas of equity cover internal equity relating to the actual worth of the jobs to the organization, external equity covering wages paid and are the wages paid fair considering market rates outside the organization. The third equity is individual and defined means is each individual rate of pay fair and relative to that of others that do the same job (Cascio, p.419.).
To develop the pay system InterClean will have to look at assigning monetary value to each job. To set up a compensation plan the company will have to update job descriptions, institute a job evaluation method, and conduct pay surveys and develop a pay structure (Cascio, 2004).
The new compensation plan will be the merit-pay system. Statistically this pay system has been proven to not work for these reasons, the value of rewards is to ...