Compensation: Outline and Definitions


Chapter Highlights

  1. How is compensation used?
  2. What are the components of a compensation system?
  3. What are different types of compensation?

How is compensation used?


Compensation may be used to:

For more information: Compensation Consultants



What are the components of a compensation system?


The components of a compensation system include

Compensation will be perceived as fair if it is comprised of a system of components developed to maintain internal and external equity

What are different types of compensation?

Different types of compensation include:

What are regulations affecting compensation?

Compensation Plans

Develop a program outline.Designate an individual to oversee designing the compensation program. Develop a compensation philosophy.Conduct a job analysis of all positions.Evaluate jobs.Determine grades.Establish grade pricing and salary range. Determine an appropriate salary structure. Develop a salary administration policy. Obtain top executives' approval of the basic salary program. Communicate the final program to employees and managers. Monitor the program.