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Week Three Thread Discussion

In: Business and Management

Submitted By mtashobya
Words 331
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A compensable factor is any job element that is considered essential to properly evaluating the amount of pay that should be rendered as part of employment.
Job evaluation must be done to find appropriate compassable factor.
Job evaluation is the systematic process for assessing the relative worth of jobs within an organization. A comprehensive analysis of each positions tasks, responsibilities, knowledge, and skill requirements is used to assess the value to the employer of the jobs content and provide an internal ranking of the jobs.
There are several compassable factor, one thing in mind, you can use a single compassable factor to determine the compensation or you can use more than one compassable factors, depends on type of the job.
Typically an employer’s compensable factors encompass four major categories:
(i) Skills i.e. experience, Education/training, Ability
(ii) Responsibility i.e supervisory, fiscal
(iii) Efforts i.e. Mental, Physical
(iv) Working conditions i.e location, hazards, physical demands, and extremes in environment

Source; http://classcomp.hr.wvu.edu/r/download/70146

I would say yes, the compassable factor would change based on the strategic plans of the organization. If the compassable factors does not align with organization strategy most likely it will not achieves its goal, they will hire employees that does not much with the jobs hired for which eventually becomes costly to the organization.
As compensation expert Richard Henderson notes, "To develop a competitive advantage in a global economy, the compensation program of the organization must support totally the strategic plans and actions of the organization." Labor costs greatly affect competitive advantage because they represent a large portion of a company's operating budget. By effectively controlling these costs, a firm can achieve cost leadership. The impact of labor costs on competitive advantage is particularly strong in service and other labor-intensive organizations, where employers spend between 40 and 80 cents of each revenue dollar on such costs

Read more: http://www.referenceforbusiness.com/management/Em-Exp/Employee-Compensation.html#ixzz3DlqozOSV

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