Question

Define a compensable factor and give a few examples

Answer 1

Compensable Factor

A compensable factor is a factor that has an impact on the compensation or price of a job. There are number of compensable factors which are deciding factors for the compensation of a job. Compensable factors are useful for the complex jobs that require higher and unique set of skills for a particular role.

Examples

Here, I am discussing five major compensable factors which are as follows:

1. Education Level - It includes the level of education required for the job. It can range from under graduation to post graduation or basic education to highly specialized training and certifications.
2. Total or Relevant Experience - It includes the total or relevant experience of incumbent required for the job. It further includes the relevance of experience with current job. It may include experience from within or outside the company.
3. Responsibility - It includes the amount of responsibility that comes with the job. It also defines the span of responsibility of the incumbent. It also defines the number of subordinates, incumbent is responsible for.
4. Risk Associated - It includes the degree of risk associated with the job. Can this job impact the life of workers, does this job involves handling of toxic items, precious items or huge amount cash etc.
5. Working Environment - It includes the environment in which incumbent has to work. It can be harsh and rough environment such as metal casting unit or mining site.