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The Compensation and Benefits Department

© Agha Sadarrudin

Work in a compensation and benefits department is often described as dealing with the most objective areas of a subjective field. As the name implies, compensation and benefits is concerned with paying employees and administering their benefits package. These tasks are by no means easy ones. First of all, job salaries are not paid on a whim; rather, dollar values assigned to positions come from elaborate investigations and analyses. These investigations run the gamut of simple, logical job rankings (i.e., the position of president of a company should be paid more than the position of a maintenance engineer) to extensive analyses. Once these analyses are finished, job ratings are statistically compared to determine the relative worth of the job to the company. External factors, such as market conditions, limited supply, arid the like, may affect the overall range of job worth. Additionally, analysis is conducted to ensure that there is internal equity in the compensation system. This means that as job rates are set, they are determined on such dimensions as skill, job responsibility, effort, and accountability-not by personal characteristics that may be suspect under employment law.

On the benefits side of the equation, much change has occurred over the past decade. As benefit offerings to employees have become significantly more costly, the benefits administrator (who may also have the title of risk manager) has the responsibility of piecing together a benefits package that meets the needs of the employees, while simultaneously being cost-effective to the organization. As such, much effort is expended searching for lower-cost products, like health insurance, while concurrently maintaining or improving quality. Additionally, various new products are often reviewed, such as flexible benefits programs and utilization reviews, to help in benefit-cost containment.

The benefits administrator also serves as the resource information officer to employees regarding their benefits. Activities such as helping employees prepare for their retirement, looking for various payout options, keeping abreast of recent tax law changes, or helping executives with their perquisites, are conducted. This gives this individual a great deal of responsibility, but also high visibility in the organization.

Although I have presented four generic areas of HRM, I would be remiss not to recognize the changing nature of HRM in today's organizations. As organizations change structures (to reflect global competition and the like), there has been a movement away from centralization of functional areas toward more self-contained units. In companies where strategic business units, or market-driven units dominate, an HRM professional may be assigned to these units to handle all the HRM operations. In fact, it is estimated that on average one HRM specialist serves the needs of one hundred employees. While a headquarters HRM staff remains to coordinate the activities the HRM representative is expected to perform all the HR functions. Accordingly, the movement toward generalist positions in HRM appears to be on the rise.

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