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Internally Consistent Compensation System

An internal consistency compensation system establishes the worth of each position inside an organization. Companies establish internal consistency, which may be accomplished partly through the differentiation of situations that demand high credentials, more duties, and even more complicated to be paid more than other professions (Elkins, 2018). The physical and mental effort and the psychological and physical pressure placed on workers are three additional aspects that are taken into account by this approach. In Allen Breweries, we ought to use this approach since it has shown no doubt that it is advantageous.

Because it will allow us to estimate the worth of each work more accurately, the company needs to embrace and practice this approach. The method will assist in better comprehending the meanings and structures of our various pay grades. Additionally, by using the system, we will gain knowledge of the aspects that need to be considered to distribute compensation properly. Because of the implementation of the system in the company, every task will be thoroughly described, and we will be aware of the working circumstances of our organization and how the various occupations vary.

The employees will be paid equitably due to the internal consistency compensation system, among the benefits we will obtain from implementing it. Consequently, both experienced and unskilled workers will feel that their contributions are highly recognized and appreciated, which will assist with employee retention (Budhwar et al., 2019). The morale of our workers will improve as a consequence of fair remuneration, which will lead to increased production rates.

To achieve internal consistency, there is a need first to do an in-depth study and investigation (Kristal et al., 2020). Before moving on, we must consider our organization’s aims, objectives, and results. Once this is finished, we will need the assistance of compensational specialists to develop the work structures, which will include doing job analysis and then performing job assessments.

A technique known as job analysis involves gathering information, documenting it, and then analyzing it to characterize employment. Worker requirements, job obligations, and safe working environments are all elements that make up this component. This process is broken down into five distinct parts. Establishing a program for gathering information as part of job analysis; examples of such programs include interviews and questionnaires. Secondly, selecting and training analysts on the methods they must follow, how to get acquainted with the work data, and how the knowledge obtained will be utilized. The third step is the direct employment analyst orientation, in which analysts observe the environment in which workers carry out their responsibilities to comprehend the aspects that determine remuneration. The collecting of data utilizing a variety of scientific methods constitutes the fourth step. Lastly, compiling a report on the findings and draft position specifications comes in.

Our company’s objectives and values are reflected in the appraisal of employees’ performance on the job. When determining salaries, the primary focus is on remunerative aspects of a worker’s performance. Notably, most businesses consider critical effort, responsibility, abilities, and working circumstances. After documenting the professional development requirements for compliance and training, the firm will talk to the workers to ensure they are on board with the job assessment process. Therefore, an appeals mechanism is established to allow reviews through reappraisal.

In conclusion, simplifying these processes might sound appealing, but the reality is that no company is permanent, and therefore neither can the compensation plan be. Each stage must be finalized, extensively defined, and recorded to produce a coherent compensation system from the inside out. Compensation must reflect internal, external, or individual equity when the organization grows, shrinks, or finds stability, to lower turnover and control associated costs. A company must have a uniform internal compensation system. Consequently, I suggest that management give this method some thought.


Budhwar, P., Pereira, V., Mellahi, K., & Singh, S. K. (2019). The state of HRM in the Middle East: Challenges and future research agenda. Asia Pacific Journal of Management36(4), 905-933.

Elkins, H. (2018). Measuring compensation system structure: the interrelation between equitable pay and firm performance. Available at SSRN 3198893.

Kristal, T., Cohen, Y., & Navot, E. (2020). Workplace compensation practices and the rise in benefit inequality. American Sociological Review85(2), 271-297.


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