Compensation Structure and Job Design Research

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Compensation Structure and Job Design Research

University of Phoenix


Compensation Structure and Job Design Research

It is imperative for organizations to develop a concrete compensation structure that ties into a company's philosophy and organizational goals. Kudler Fine Foods recently restructured its organizational strategy by establishing a new customer service concept that allows the associates to be the customer service agents. This strategy was designed to offer the customers with the highest level of customer service. However, to move forward with this organizational strategy, Kudler must establish a compensation structure for the six different positions. As this is a critical stage of the process, Kudler must successfully implement a compensation structure that is appropriate for the organization. Hence, this paper will analyze the job-based and person-based compensation structures as well as evaluate the job designs for each position.

Compare and Contrast Approaches to Evaluating Work Related Internal Structures

Within most organizations there are two kinds of compensation structures, job-based and person-based. Each structure has very specific roles to play within the organization, but they are extremely at different ends of the spectrum. First, the person or skill-based structure "link pay to the depth or breadth of the skills, abilities, and knowledge a person acquires that are relevant to the work," (Milkovich & Newman, 2004, p. 148). Therefore, an employee is compensated for more than what his or her job may entail at the time; rather they are compensated for what they have learned over time. In contrast, the job-based structure is far less flexible and does compensate the individual for what he or she is worth, rather what the job is worth. "Each position is slotted into a grade level and weighted based on...