Jim Thomason's "The Business of People"

As promised, we'll now turn our attention to how we calculate the fair market value of a position's base pay. To revisit our earlier post on terminology, base pay is the wage you receive every two weeks and does not include commissions, spiffs, or bonus. These are variable compensation pieces, and the value at targeted performance is usually calculated or expressed as some percentage of base pay. The base pay calculation, therefore, is very important in accurate and fair compensation as it impacts variable pay calculations. The first important consideration in knowing how job prices are calculated is to know what we use to calculate them. This is the subject of today's post. Job Descriptions - Specifically, we focus on the section in the JD template that addresses skills, duties and resopnsibilities, and specifically not the sections on education, reports to, or title. Job value is all about the duties of the position and the scope of responsibility (people supervised, ...

When we talk about compensation to each other we often get tangled in our terminology. What's the difference between a salary and being on salary? If the market pays "x" for my job, is that before or after bonus or commission? How does the cost of benefits figure into my compensation? What is equity, and how do I get some of it? What's the difference between an ESOP and a stock option? All these are fair questions aimed at answering the big question: when it all adds up, do the numbers add up to fair treatment? We'll get into some of these questions later on, but for now let's start with identifying the basic elements of typical employee compensation and what we call it. The wages that you bring home every two weeks, whether earned by the hour or by the pay period, comprise your base pay . If you punch a time card, this is your hourly rate multiplied by the number of hours you work. If you work over 40 hours in a pay week, that rate is (1.5 x hourly rate) x ho...