Why is it important for HR to identify compensable factors?

What is the importance of compensable factors?

Any factor used to provide a basis for judging job value in a job evaluation scheme. Typically, compensable factors include effort, skill needed in order to perform a job, and responsibility. These factors are used to establish job worth when creating a job hierarchy in order to set a wage structure.

What are the compensable factors in HR?

The Equal Pay Act of 1963 has defined 4 most basic compensable factors: effort, skill, responsibility and working conditions.

What are compensable factors?

Compensable factor

A job attribute described in a job evaluation plan that provides the basis for evaluating the relative worth of a job inside the organization. Each compensable factor has a number of different degree levels on which jobs are evaluated.

How do you determine compensable factors?

Compensable factors include skills, licenses, certifications, years of experience, educational requirements, working conditions, reporting structures, managerial responsibilities, and other factors that can impact the price of a job in a given pay market.

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What are compensable factors examples?

Here, courtesy of BLR’s Job Descriptions Encyclopedia, are the primary compensable factors:

  • Experience. …
  • Education. …
  • Responsibility. …
  • Complexity of duties. …
  • Supervision received. …
  • Supervision exercised. …
  • Consequences of error.

Which of the following is true about compensable factors?

Which of the following is true of compensable factors? They are the characteristics of jobs that a firm values and chooses to pay for. … A rate of pay for each unit produced is known as: piecework rate.

What is the relationship between compensable factors and job specifications?

What is the relationship between compensable factors and job specifications? Compensable factor is a fundamental element of a job such as skills, effort, responsibility and working conditions. The relationship with this and job specification is that they both focus on the aspects of the actual job to determine pay.

What are the five most commonly used compensable factors in a factor comparison system?

The judgments permit construction of a comparison scale of key jobs against which other jobs may be compared. The compensable factors used are usually (1) mental requirements, (2) physical requirements, (3) skill requirements, (4) responsibility, and (5) working conditions.

Why job evaluation is an important factor for compensation and benefits?

The purpose of conducting job evaluation is to fairly determine the monetary value / worth of a job in relation to other jobs in an organization. … Using job evaluation results, one can develop appropriate salary grades and decide on other compensation issues.

What’s compensable mean?

: that is to be or can be compensated a compensable job-related injury.

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What are the factors affecting employee compensation?

Factors Affecting Employee Compensation – External and Internal Determinants of Compensation

  • Labour Market Conditions:
  • Economic Conditions:
  • Prevailing Wage Level:
  • Government Control:
  • Cost of Living:
  • Union’s Influence:
  • Globalization:
  • Cross Sector Mobility:

Which of the following job evaluation methods define compensable factors and levels of accomplishment and determine levels for each job?

The point factor method is a commonly used quantitative technique. This approach breaks down jobs into compensable factors identified during a job analysis. Points are assigned to the factors, and a pay structure is established for the position.