Question

Explain the purpose, objectives, and required resources for conducting a compensation analysis. Describe internal and external benchmarking approaches, and explain why an HR professional should include both approaches in a compensation analysis.

Answer 1

Compensation analysis according to me is one o the most important aspect of a business and the organization should be effective in creating a compensation plan based on which the employees at level should be satisfied or else it becomes difficult for organizations to handle the situation giving rise to unrest and unsatisfactory measures. I believe that the objective and purpose is clear and that is to create a standardized compensation plan to compensate employee in each and every level of the organization and the packages offered to employees are standardized based on internal and external standards.

External standard refer to the industry standard pay that is the average pay of an employee in a particular job level and to retain employee it is important to maintain the industry standard. Then there is the company standard which organizations possess for compensating their employees and retaining them. I believe that the HR professional should look after and consider both the approaches and then design the compensation plan of a new employee that will make it sure that the employee doed not feel deprived compared to any other employees in the industry or the organization.