Accurate Job Documentation is the First Step To Building an Employee Compensation Plan

by on June 25, 2009 · 0 Comment POSTED IN: HR Info Center

Having the proper classification results in appropriate employee compensation

The first step in the process of creating an employee compensation program is to look at job documentation. This can take the form of a job description which most organizations are familiar with, provided they’re up to date and reasonably accurate.

Or we can use something like called a Job Inventory Form or a JIF, people call it job analysis question, there are number of different names. The difference between a JIF and a job description is that a JIF is actually completed by each and every employee in the organization and ask them more about their individual role, their duties and responsibilities as oppose to the broader category.

Certainly, you want supervisors to sign off on a JIF and correct anything that’s inaccurate. But the benefit of using a JIF is it will allow you to make sure that you have the proper people and the proper classifications in your employee compensation program.

JIF allow for discrete analysis of your employee compensation philosophy and delivery
So, for example, if you have five different accountants in your organization and all are called accountant one, a job description will describe accountant one and what the duties and responsibilities of that job are.

A JIF will allow you to look more discretely at each employee. And as you review those JIF, decide that, you know, we don’t really have five accountants. So, it’s one individual doing something completely different, it’s a much higher level, it’s a much lower level. We need to call them an accounting assistant; we need to call them a senior accountant whatever it is that job documentation will help you drive classification, which help verify that your employee compensation plan pays them appropriately.

At the end of the day, it is critically important that you focus on a job documentation and understand the duties and responsibilities of each job rather than relying simply on job title. What one organization calls an accountant, another may call it an accounting clerk, another may call it a controller. So, by understanding those duties and responsibilities, it ensures that we have the proper matches made to the market.

Edited Remarks from “How to Set Pay Ranges That Are Fair and Effective” by Ed Rataj

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