From the course: Certification Prep: Professional in Human Resources (PHR)®
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Compensation philosophy
From the course: Certification Prep: Professional in Human Resources (PHR)®
Compensation philosophy
- I've had employees come to me very upset because they didn't get the kind of raise they thought they deserved. Often the argument used is that they've been with the company for a long time and they feel that for all their years of service they deserve a bigger raise. If your company culture supports this argument then you're working somewhere where compensation is seen as an entitlement. There are two primary compensation philosophies, entitlement and pay for performance. An entitlement orientation exists when a company values longevity more than performance. Companies that pay cost of living adjustment for example are companies where an entitlement philosophy exists. A pay for performance philosophy is when pay increases are directly linked to an employee's performance. Both compensation philosophies are valid. It's the HR pros job to make a recommendation as to the best philosophy based on the company's goals. Still you may find a blend of both philosophies in your company. HR…
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