Business Question

Employee compensation management is a massive part of human resource functions as a tool for both the employee and the company to thrive. 

There are 4 responses. Read each response and write a 100-word response for each.

Response 1.) Mary

Employee compensation management is a massive part of human resource functions as a tool for both the employee and the company to thrive. Decision-making at any level is essential however, the human resources must carefully plan how compensation will be allocated and disbursed by maximizing the needs of the company and meeting desired expectations of the employees. (Noe, Hollenbeck, Gerhart & Wright, pg. 572, 2021). Organizations that carefully plan and provide the types of benefits that are valued and embraced will set them apart from their competitors and have the advantage.

The main decision areas that are always on the forefront of a organizations’ performance are labor cost and employee compensation because without monitoring the labor cost it could have negative consequences that could damage the organizations’ wellbeing. Employee compensation is also an ongoing topic in that numerous decisions are made regarding pay wages, medical insurance, salaries, rewards, and earnings that are all largely regarded amongst employees’ preferences. Having the right concepts in place that benefits both the employer and the employees is a win-win for the organization.


Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (pg. 572, 2021). Human Resource

Management: Gaining A Competitive Advantage (12th ed.). McGraw-Hill Education.

ISBN: 978-1-260-26257-5

Response 2.) Jayne

As noted (Noe et al., 2019, p. 481), the complete concept of compensation management includes cash compensation and benefits. However, decisions in salary can be divided into two primary focal points, pay structure (job) and pay level (amount). Job structure sets a relative pay level for different jobs, and pay level is the average pay of jobs within the organization.

An important point discussed by Noe et al., 2019, was how decisions ( Pay policies) are based on the internal, external, and individual acceptance of equity, explaining that equity does not mean equality. Although each employee is unique, compensation decisions related to job structure stem from a specific job and not the individual employee. All persons who have worked in one particular job have often wondered why one job pays more than the other with no apparent differences in duties. Therefore, developing a relative pay level and structure in line with other organizations is vital in compensation management. (p. 482)


Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2021). Human Resource Management: Gaining a Competitive Advantage (12th ed.). McGraw-Hill Education. ISBN: 978-1- 260-26257-5

Response 3.) Bryana

Benchmarking is comparing the practices of one organization to another.

Rate ranges is the idea that different employees may have different pay rates in the same job.
Key jobs are benchmark jobs, used in pay surveys, that have relatively stable content and are common to many organizations.
Compensable factor is the characteristics of jobs that an organization values and chooses to pay for.

Benchmarks are standards which are created for activities and processes to be followed so that they meet a certain specified set of limits. These help to measure the performance of an activity, process or product. These are the set of performance standards which are created for a specific group. This could be a group of people, companies or countries. They are very important as they create a specific performance standard or metrics of measurement for companies and businesses. They can also be used in personal life to create a goal or target for someone.

A benchmark in the hospitality sector is the level of cleanliness which a company needs to ensure and the quality of service which they need to provide in order to be classified under different categories of hotels (1 star, 2 star, 3 star and so on).

Internal benchmarks are when a company or an individual sets a specific goal and targets themselves either by experience or as per requirement. External benchmarks are those which are set by a group of people or companies or a national or global benchmark setting council. The external benchmarks are globally or nationally recognized and accepted whereas internal benchmarks are not necessarily accepted outside the company. These are comparisons that are internal when set with internal teams and employees and external when compared with other companies or industries.


Noe, R. A. (2020). Human Resource Management (12th Edition). McGraw-Hill Higher Education

Response 4.) Deborah

Market surveys provide critical information about your market and your business landscape. Benchmarking is a procedure in which an organization compares its own practices against those of the competition (Noe, Hollenbeck, Gerhart, Wright, 2021). Benchmarking is very important for compensation management. It allows companies to assess how people are positioned relative to the market. It also enables the company to make good decisions on the pay scale to attract and retain good talent. In compensation management, benchmarking is the process of using internal job descriptions to match established salary survey jobs in order to identify the external market rate. It is very important because it provides the data the company needs to define the costs associated with salaries and other compensation components and if the company wants to maintain a competitive edge in the market compensation benchmarking is a way to do it.


Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2021). Human resource management: gaining a competitive advantage (12th ed.). McGraw-Hill Education.

Answer preview employee compensation management is a massive part of human resource functions as a tool for both the employee and the company to thrive. 


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