Identify the major groups that have an impact on compensation related decisions and the particular areas they influence
Compensation is being drastically affected by the Internet. Employees now has easy access to the competitive rates commonly paid for their positions within any given geographic area. A future where employees know more than their employers about the value of their positions in the competitive marketplace is what now faces worldwide employers. Unfortunately, when competitive values are known, the effect appears to be inflationary. For example, before U.S. executives had ready access to what their peers were receiving competitively, organizations could concentrate on internal goals. Consultants and SEC requirements for reporting have made executive compensation a focus within all publicly held companies' Boards of Directors and Compensation Committees. Since most companies do not wish to pay below average rates and since all averages are known, the trend is for everyone to attempt to pay "above average." This is not a new concept. It is now, however, a concept being extended to the rank and file.
Compensation has thus been studied selectively by those in separate disciplines
The major issues and sub issues that influence the pay of each employees
Years of experience: Typically, more experience results in higher pay – up to a point. Similarly, if the position calls for someone with 10 years of experience in a particular occupation, and you don't meet those requirements, you may find yourself on the lower end of the pay scale.
Education: The match between your education and what's normally required for your job usually affects your pay. Plus, the quality of education can affect salary. Earning a degree from a top program typically has a positive influence on pay, while earning a degree from a school that's considered weak in a particular field may decrease your earning potential.
Performance reviews: Since most employers base their pay decisions at least partly on individual performance, this is an important variable when being considered for a pay increase or promotion. Even when applying for a new job, this information may be important to your prospective employer, as it gives a more complete picture of your abilities.
Boss: The more discretion and latitude you have in relation to your company's success, the more directly your decisions and actions will affect the bottom line – and your own. Andif your boss is higher on the corporate hierarchy, his or her recommendations concerning your pay have less chance to be overridden in the cycles of review.
Number of reports: The more employees you manage, the higher your pay in certain jobs. Of course, your level of success is also based on the performance of the employees you manage.
Professional associations and certifications: Certifications and memberships in professional organizations or trade associations can have a positive Effect on pay. However, if a job calls for a certification you don't have your pay might be set at the lower end of the range. Some employers require employees without certifications to work toward them.
Shift differentials: In certain jobs, workers may be expected to perform tasks during less favorable shift times. These employees are typically paid a premium due to the higher social and physical costs involved in working outside "normal work hours." In jobs that don't normally operate on more than one shift, the differential is negligible and usually only taken into account when a no salaried employee works overtime or on a special project.
Hazardous working conditions: In certain jobs, workers are expected to perform tasks under dangerous working conditions. Dangerous working conditions can be defined to include anything from handling dangerous chemicals in a research facility to walking a police beat in a dangerous section of town. Jobs that fall into this category are usually regulated by outside authorities, including labor unions and the government.