Compensation of course means the salary paid to an employee. Compensation can also include additional employee benefits such as bonuses, health insurance, retirement, life insurance, etc.
Classification is a system which identifies which jobs are classified together in a separate grade. For example, a grounds laborer and a custodian may be a Grade 1 and Administrative Assistant may be a Grade 2. Each classification is assigned a compensation range for minimum and maximum salaries.
When Randi Frank Consulting, LLC conducts a Classification & Compensation Study we start by reviewing all job descriptions. We provide employees with a questionnaire so they can tell us about the specific and general responsibilities, qualifications, physical requirements, knowledge, skills and abilities that relate to their position. We interview employees in each job description so we can prepare a draft Job Description for approval. “See tips on Job Descriptions”
The second major step is to conduct a salary survey of similar organizations to determine the market rate (average of other salaries) for similar type positions. Sometimes the salary comparisons are already available from other sources.
The third step is to assign points to each Job Description based on job factors such as authority, autonomy, impact, scope, working environment, complexity and qualifications. This creates the classification system. For example, all positions at 300 points would be at the same classification grade, and therefore the same pay opportunities. (Everyone is not paid the same in a grade.) Equal pay for equal work
The last process is to combine the external market data with the internal classification system to determine the new Classification & Compensation Plan with updated salary grades, based on a fair and equitable system.
Randi Frank and Georgian Lussier have developed a copyrighted program called “Classification & Compensation Manual – Public Sector Version” which we can use to assist you with a new Classification & Compensation Study and Plan.