Compensation Fundamentals: Legal Considerations and Assessing Effectiveness
Author: Joseph J. Martocchio, Professor Emeritus, University of Illinois at Urbana-Champaign
Employee compensation encompasses the rewards employees receive for performing their jobs, to adjust for cost-of-living increases, for their seniority, job performance over time, or acquiring new competencies, skills or knowledge sets.
HR professionals collaborate with high-level managers to determine the optimal compensation plans that will facilitate recruitment, employee job performance and retention - all within budgetary limits. Then, HR relies on its expertise to create and oversee the implementation of compensation programs.
This guide discusses key legal considerations an employer must consider when designing a compensation program and metrics an employer can use to make sure its compensation system is meeting its goals. It should be reviewed together with the other parts of the Compensation Fundamentals series: