Discussion Question: (250-300 words long) What are the three main goals of a Compensation Department? Is one goal more important than the others, why or why not? I want you to answer to discuss and answer this question and to help you to do so I will upload a PowerPoint file helping you to answer this question. Here is one of the classmates response to this question read it and try to connect his response to your answer and discussion. Classmate response: The three main goals of a Compensation Department are internal consistency, market competitiveness, and recognizing individual contributions. Internal consistency is the fairness of compensation based on the job evaluation and the job analysis. The Compensation department ensures that each employee has a clear definition of their position and that each employee is evaluated based on fair comparisons. Market competitiveness is the retaining of skilled employees in the organization.  When developing the compensation system internal factors, external factors and compensation surveys are used to gather information about the competition. Finally the compensation department’s goal is to recognize individual contributions. Pay grades and pay ranges are used to design a pay structure. There is not one goal that is more important than the others. Each goal is important for the success of the compensation department. The Compensation Department must be consistent in order to be fair. The department also needs to have market competitiveness in order for the company to retain the best employees. And individual contributions must be compensated for to maintain fairness. If any of these goals are not met, employees will not want to continue working for the company. Learning Objective 4 Name and summarize the goals of compensation professionals. Copyright © 2015 Pearson Education, Inc. 1-1 1 HR’s Role A quotation from Jay Hannah of BancFirst Corporation: “The HR department is the source and keeper of critical information, which is key in today’s workplace. With the information they provide, we in turn can build and design strategies to hire and retain the best workforce possible. And this may sound cliché, but it’s very true—the real competitive advantage is our company’s human resources.” Copyright © 2015 Pearson Education, Inc. 1-2 2 Human resource professionals are staff employees because they offer a wide variety of support services for line employees. In a nutshell, HR professionals promote the effective use of all employees in companies. Effective use means attaining work objectives that fit with the overall mission of the company. Human Resources Practices Recruitment Selection Performance appraisal Training Career development Labor-management relations Employment termination Insuring legal compliance Copyright © 2015 Pearson Education, Inc. 1-3 In addition to compensation, HR professionals design and implement various HR practices such as recruitment, selection, .

1. Discussion Question: (250-300 words long)
What are the three main goals of a Compensation Department?
Is one goal more important than the others, why or why not?
I want you to answer to discuss and answer this question and to
help you to do so I will upload a PowerPoint file helping you to
answer this question.
Here is one of the classmates response to this question read it
and try to connect his response to your answer and discussion.
Classmate response:
The three main goals of a Compensation Department are
internal consistency, market competitiveness, and recognizing
individual contributions. Internal consistency is the fairness of
compensation based on the job evaluation and the job analysis.
The Compensation department ensures that each employee has a
clear definition of their position and that each employee is
evaluated based on fair comparisons. Market competitiveness is
the retaining of skilled employees in the organization. When
developing the compensation system internal factors, external
factors and compensation surveys are used to gather information
about the competition. Finally the compensation department’s
goal is to recognize individual contributions. Pay grades and
pay ranges are used to design a pay structure.

2. There is not one goal that is more important than the others.
Each goal is important for the success of the compensation
department. The Compensation Department must be consistent
in order to be fair. The department also needs to have market
competitiveness in order for the company to retain the best
employees. And individual contributions must be compensated
for to maintain fairness. If any of these goals are not met,
employees will not want to continue working for the company.
Learning Objective 4
Name and summarize the goals of compensation professionals.
Copyright © 2015 Pearson Education, Inc.
1-1
1
HR’s Role
A quotation from Jay Hannah of BancFirst Corporation:
“The HR department is the source and keeper of critical
information, which is key in today’s workplace. With the
information they provide, we in turn can build and design
strategies to hire and retain the best workforce possible. And
this may sound cliché, but it’s very true—the real competitive
advantage is our company’s human resources.”
Copyright © 2015 Pearson Education, Inc.
1-2

3. 2
Human resource professionals are staff employees because they
offer a wide variety of support services for line employees. In a
nutshell, HR professionals promote the effective use of all
employees in companies. Effective use means attaining work
objectives that fit with the overall mission of the company.
Human Resources Practices
Recruitment
Selection
Performance appraisal
Training
Career development
Labor-management relations
Employment termination
Insuring legal compliance
Copyright © 2015 Pearson Education, Inc.
1-3
In addition to compensation, HR professionals design and
implement various HR practices such as recruitment, selection,
performance appraisals, training, career development, labor-
management relations, employment termination, and insuring
legal compliance. With recruitment, and selection, HR
departments try to attract job candidates. Companies attract
candidates by providing career opportunities, training
opportunities, reputation, and so forth. Performance appraisal is
key to effective merit pay programs. Compensation rewards
must be tied to attainment of performance goals and quality
standards. Employees must perceive a strong relationship
between performance standards and pay increases. Training is
another important HR practice. Successful pay-for-knowledge
plans depend upon a company’s ability to develop and
implement systematic training programs. Employees’ careers
develop in two ways, namely, as a lateral movement or upward

4. movement. In lateral movement, employee moves across a
company's hierarchy, and in upward movement, an employee
focuses on one functional area and takes a greater responsibility
in that area. Compensation is a key topic in labor-management
relations. Unions bargain for COLAs and base pay on seniority
pay. Employment termination is either involuntary or voluntary.
In involuntary termination, companies may offer severance pay.
Voluntary terminations are initiated by employees and usually
occur when employees want to work elsewhere or retire. Laws
were enacted to determine acceptable employment practices and
protect employees’ rights.
3
Compensation Department’s Main Goals
Compensation professionals promote effective compensation
systems by meeting three important goals:
Internal consistency
Market competitiveness
Recognition of individual contributions
Copyright © 2015 Pearson Education, Inc.
1-4
4
The compensation department’s main goals include internal
consistency, market competitiveness, and recognizing individual
contributions. Each of these goals will be discussed in
following slides.
Internal Consistency
Achieved when the value of each job is clearly defined
Represents
Job structure

5. Hierarchy
Achieved using
Job analysis
Job evaluation
Copyright © 2015 Pearson Education, Inc.
1-5
5
Think about a series of jobs that progress in terms of duties and
responsibilities, for example, a store associate, department
manager, assistant store manager, and store manager.
Internal consistency refers to compensation systems that define
the relative value of each job among all the jobs. It represents
job structure or hierarchy. According to internal consistency,
employees working at jobs that require greater qualifications,
more responsibilities, and more complex job duties should be
paid more. In order to achieve internal consistency,
compensation professionals use job analysis and job evaluation.
Market Competitiveness
Compensation policies that fit with business objectives
Vital in attracting and retaining employees
Are based on:
Strategic analyses
Compensation surveys
Copyright © 2015 Pearson Education, Inc.
1-6

6. 6
Setting pay rates and benefits offerings is essential to recruiting
and retaining the best employees. Companies make judgments
about what is best based on the norms in companies with whom
they compete for labor. They use strategic analysis
(understanding who the competitors are) and compensation
surveys (understanding what competitors pay).
Individual Contributions
Pay structures: pay is determined by employees’ credentials, job
knowledge, and job performance
Pay grades: based on compensable factors and value
Pay ranges: builds on grades, uses midpoints, minimums, and
maximums
Copyright © 2015 Pearson Education, Inc.
1-7
7
Over time, it is important to recognize the contributions of
employees for the purposes of retaining them.
There are three main methods such as pay structures, pay
grades, and pay ranges. Pay structures are pay rate differences
for jobs of unequal worth. Pay is determined by employees’
credentials, job knowledge, and job performance. Pay grades
group jobs for pay policy application, and they are based on
similar compensable factors and value. The last method is pay
ranges and it builds on pay grades.
Pay Grades and Ranges

7. Copyright © 2015 Pearson Education, Inc.
1-8
Learning Objective 4
Name and summarize the goals of compensation professionals.
Copyright © 2015 Pearson Education, Inc.
1-1
1
HR’s Role
A quotation from Jay Hannah of BancFirst Corporation:
“The HR department is the source and keeper of critical
information, which is key in today’s workplace. With the
information they provide, we in turn can build and design
strategies to hire and retain the best workforce possible. And
this may sound cliché, but it’s very true—the real competitive
advantage is our company’s human resources.”
Copyright © 2015 Pearson Education, Inc.
1-2
2
Human resource professionals are staff employees because they
offer a wide variety of support services for line employees. In a
nutshell, HR professionals promote the effective use of all

8. employees in companies. Effective use means attaining work
objectives that fit with the overall mission of the company.
Human Resources Practices
Recruitment
Selection
Performance appraisal
Training
Career development
Labor-management relations
Employment termination
Insuring legal compliance
Copyright © 2015 Pearson Education, Inc.
1-3
In addition to compensation, HR professionals design and
implement various HR practices such as recruitment, selection,
performance appraisals, training, career development, labor-
management relations, employment termination, and insuring
legal compliance. With recruitment, and selection, HR
departments try to attract job candidates. Companies attract
candidates by providing career opportunities, training
opportunities, reputation, and so forth. Performance appraisal is
key to effective merit pay programs. Compensation rewards
must be tied to attainment of performance goals and quality
standards. Employees must perceive a strong relationship
between performance standards and pay increases. Training is
another important HR practice. Successful pay-for-knowledge
plans depend upon a company’s ability to develop and
implement systematic training programs. Employees’ careers
develop in two ways, namely, as a lateral movement or upward
movement. In lateral movement, employee moves across a
company's hierarchy, and in upward movement, an employee
focuses on one functional area and takes a greater responsibility
in that area. Compensation is a key topic in labor-management

9. relations. Unions bargain for COLAs and base pay on seniority
pay. Employment termination is either involuntary or voluntary.
In involuntary termination, companies may offer severance pay.
Voluntary terminations are initiated by employees and usually
occur when employees want to work elsewhere or retire. Laws
were enacted to determine acceptable employment practices and
protect employees’ rights.
3
Compensation Department’s Main Goals
Compensation professionals promote effective compensation
systems by meeting three important goals:
Internal consistency
Market competitiveness
Recognition of individual contributions
Copyright © 2015 Pearson Education, Inc.
1-4
4
The compensation department’s main goals include internal
consistency, market competitiveness, and recognizing individual
contributions. Each of these goals will be discussed in
following slides.
Internal Consistency
Achieved when the value of each job is clearly defined
Represents
Job structure
Hierarchy
Achieved using
Job analysis
Job evaluation

10. Copyright © 2015 Pearson Education, Inc.
1-5
5
Think about a series of jobs that progress in terms of duties and
responsibilities, for example, a store associate, department
manager, assistant store manager, and store manager.
Internal consistency refers to compensation systems that define
the relative value of each job among all the jobs. It represents
job structure or hierarchy. According to internal consistency,
employees working at jobs that require greater qualifications,
more responsibilities, and more complex job duties should be
paid more. In order to achieve internal consistency,
compensation professionals use job analysis and job evaluation.
Market Competitiveness
Compensation policies that fit with business objectives
Vital in attracting and retaining employees
Are based on:
Strategic analyses
Compensation surveys
Copyright © 2015 Pearson Education, Inc.
1-6
6
Setting pay rates and benefits offerings is essential to recruiting
and retaining the best employees. Companies make judgments

11. about what is best based on the norms in companies with whom
they compete for labor. They use strategic analysis
(understanding who the competitors are) and compensation
surveys (understanding what competitors pay).
Individual Contributions
Pay structures: pay is determined by employees’ credentials, job
knowledge, and job performance
Pay grades: based on compensable factors and value
Pay ranges: builds on grades, uses midpoints, minimums, and
maximums
Copyright © 2015 Pearson Education, Inc.
1-7
7
Over time, it is important to recognize the contributions of
employees for the purposes of retaining them.
There are three main methods such as pay structures, pay
grades, and pay ranges. Pay structures are pay rate differences
for jobs of unequal worth. Pay is determined by employees’
credentials, job knowledge, and job performance. Pay grades
group jobs for pay policy application, and they are based on
similar compensable factors and value. The last method is pay
ranges and it builds on pay grades.
Pay Grades and Ranges
Copyright © 2015 Pearson Education, Inc.
1-8