Final compensation project

Introduction

We know that currently organizations are social and economic entities.

which unfold in a changing environment, which fosters the need
from an optimal development of business plans and strategies that help them to
to face their competition and position themselves in the market. For this, it is
it is necessary for employees to feel satisfied within the organization,
and so they can achieve maximum performance.

The most successful brands we know today, such as Coca Cola, Bimbo or
Google has within its corporate philosophy this image of satisfying the
needs of its human resources, this can be achieved through a proper
implementation of compensation plans.

The objective of this project is to gain a better understanding of the

components of compensation management, the analysis, the
description and job valuation as well as finally the evaluation of the
performance, which will be detailed later, this in order to keep ourselves
informed about what we can and/or have the right to as collaborators within
of a company, or the options that can be offered as a manager or
stakeholder so that employees feel satisfied and at the same time the
the company has better profitability.

Introduction to compensations

It is important to know what compensations are, and that is why the author
(Urbano consultants, 2019) suggests that this is the reward that employees
they receive in exchange for their labor and it helps them meet their material needs.
Through compensation, companies can attract and retain their resources.
human.
Currently, compensations include incentives or benefits that motivate the
personal to establish a link between labor costs and productivity; it is
That is why it is said to be made up of Salary, Wages, and Benefits.

On the (BBVA) page it is mentioned that salary is a fixed payment that is agreed upon.
from the beginning by the employer and the worker, and it is also defined
if this payment will be weekly, biweekly, or monthly. On the other hand, the salary makes

reference to a monetary compensation received for working for a company or

employer, but this is calculated with the days or hours of work.

Finally, it is established that benefits are rights that every employee must have.
to have, its objective is that they are always aimed at improving the quality of life
of the workers, reduce their expenses and provide them with resources that promote their
cultural and social development. There are basic benefits and those mandated by law, but these
will be explained later.

It is also necessary to know the benefit that compensations have in

organizations and for that (Euroinnova) mentions that if a company is looking for
to achieve your goals it is necessary to keep your collaborators
enthusiastic and committed through compensation. Since if
As a company, you offer better benefits than your competition, you will position yourself.

as an excellent job alternative, one example of this in Veracruz could be

the company Tamsa, how many of us have not heard of what it offers to its
human resource; in this way the staff will improve their willingness towards the
will work and make greater efforts to ensure its permanence and growth
within the organization, thereby reducing staff turnover that
muchas veces suele ser malo para las empresas, porque al existir mucha rotación
it is necessary to hire staff regularly which incurs some expenses such as in
selection, recruitment, and training.
Components of compensation management

As mentioned earlier, compensations are fundamental for

the performance of companies, as they motivate collaborators to
perform better in their jobs, achieving
that the organization generates greater production and/or better profits, for this the
compensations are divided into 3 important parts that need to be known, the
which are detailed below:

Salary and wage

All people who perform work have the right to receive a salary.
dignified and paid, according to the activities they perform; that is why
that there exists the federal labor law, where various rights are explained regarding the
what the workers say.

According to (Moreno, 2018), 'The salary is a labor right; it is the

direct purpose that the employee wants to achieve, this compensation must be
paid by the employer. However, the salaries, the remuneration, or payment
fixed payment that a person perceives from an employer for their performance
from a position or service for a specified time. However, the
salary and wage are not exact synonyms, so below is
they present the characteristics of both to observe the differences.

Características: Sueldo

It is a fixed amount
It is calculated based on the number of working days, workload,
aptitudes, position, etc.
Includes labor benefits

Characteristics: salary

It is a variable amount.
It is calculated based on units of time worked (hours or
days).
 It does not include labor benefits.

The salary usually has some integrations or compositions; the

Article 84 of the (Federal Labor Law) states that the salary is composed of
the payments made in cash for daily installments, bonuses,
perceptions, room, bonuses, commissions, benefits in kind and
any other amount or presentation that is given to the employee for his
work. Contributions to Infonavit and to the retirement fund, including the employer's fee.

what corresponds to the IMSS forms the salary cost of a person.

However, despite these integrations, a salary has been defined.

minimum according to (International Labour Organization) the minimum amount
of remuneration that an employer is obliged to pay to their
salaried workers for the work they have performed during a period
determined amount that cannot be reduced or by virtue of a
collective agreement nor an individual agreement. The minimum wage must
be sufficient to meet the normal needs of a boss of
family in the material, social, and cultural order, and to provide for education
mandatory for children.

Benefits and compensation plan

Many times we have heard that the people we know go to others.

states to work or simply change jobs, because the salary does not
meets their expectations or does not meet their needs
basics; that is why as an organization it is important to have the
legal benefits and also create a compensation plan that helps us to
differentiate ourselves from the competition and thus have better job demand and avoid
staff turnover that only brings us expenses.

Due to high unemployment in Mexico, this strategy of granting has been created.
competitive benefits to the employees who are part of the company, and with
this achieves retention and develops their human capacities. In practice, the
the majority of individuals request information about it and it has been noted that when
try to enter the job market, one of the sectors that most attracts attention
attention is that of the benefits, sometimes it is due to the fact that these
contributions are intended to support the families of the collaborators. Thus
the same author (Chiavenato 1998) defines benefits as the facilities,
conveniences, advantages, services and supports that save efforts and
concerns to the workers. They can be partially or fully funded by the
company and constitute a fundamental means to preserve the workforce
in a satisfactory range of morality and productivity. We also have that Arias and
Heredia 2004 defines it as services and activities paid for by the company.
to provide material or social support to workers and benefits
as financial contributions made by the organization to increase
indirectly the total amount of salary that the worker receives.

Legal benefits

In the article (Benefits you must provide to your workers), it is said that the
benefits are the rights that an employee must have guaranteed by the
employer or company in a labor relationship, but it is necessary that as
collaborator, as much as the employer is aware of the statutory benefits
according to (Insurance) are the following:

. Aguinaldo: it is a special payment given to collaborators and

corresponds to 15 days of salary (in case of having a year, if not
receive the proportional).
. Rest day: for every 6 days worked there should be one off.
rest.
. Vacation: this should be with pay and is 6 days in the first
year and subsequently increases by 2 days for each year.
. Sunday bonus: this additional amount of 25% of the base salary is given in
in the event that workers work on Sunday.
. Lactation period: working mothers are allowed to have
paid rest right to be able to breastfeed her daughter or son.
 . Seniority bonus: this is the payment of 12 days of salary for each year.
service granted. This benefit is granted only if the
employee voluntarily resigns after at least 15 years of
service, or be dismissed (regardless of the reasons).
. Infonavit: An important benefit is access to obtaining a home
comfortable and decent for the workers.
. Social security: There are various social security institutions that
they protect the collaborators, in the case of Mexico there is the IMSS which is

for state workers and the ISSSTE which is for the

federal workers.
. Payment of profits: a portion of the earnings obtained must be received.
for the business activity; this must be paid by the 30th at the latest
of May.
. Unjustified dismissal: one has the right to compensation of three
months of salary.
. Resignation: In case of resignation, salaries must be paid.
corresponding to the worked and unpaid days, the Christmas bonus, the
vacation bonus, the owed profit sharing, and the bonus of
seniority in case of having worked at least 15 years in the same one
company.

Compensation plan

Un plan de compensaciones lo podemos definir como el conjunto de beneficios y

payment conditions that can be offered to a collaborator, such as plans.
Doctors, retirement options, flexible hours, vacations, bonuses, among others
many more options. To design a compensation plan it is necessary that
the legal benefits are known, and those that can be granted to the
collaborators.

Subsequently, it is necessary to determine the steps to design a plan for

compensations in accordance with our objectives within the company. According to
(Endalia, 2021) there are 5 important steps to design it.
 1. Set the objectives of the compensation plan: as a company, it is necessary
define the strategies and identify what the objectives are so that there will be
of course what is being sought.

2. Conduct a job and professional level evaluation: It is useful

classify the collaborators into professional groups, this will help us to
to see the organizational needs of the moment.
3. Develop a compensation study: it is important to conduct a study of the
current situation of the organization, that is, distribution of employees,
global data on fixed compensation, distribution of the salary mass. Thus, in
At this point, we will analyze the data from the compensation programs.
both internal and from our sector, with the objectives of being competitive
in the market and to be able to attract and retain that talent.

4. Establish the compensation policies and processes:

To meet basic needs
Establish a flexible compensation
Reward high performance
Establish the salary review process
To ensure internal equity
To define mobility criteria
Emotional salary

5. Communicate and implement the compensation plan: Once determined

the objectives and the compensation for each group of employees are necessary
establish the regulations and the conditions under which the plan will be implemented
of compensation.

It is of utmost importance as an organization to create a compensation plan.

because with them we can generate a competitive advantage over the others
companies and that have a higher demand for work, an example of this could be
to be Bimbo, which provides its collaborators with a good compensation plan,
since they organize various activities to spend time as a family, they give them many
incentives that make their employees feel good about the culture of the
company.

Incentives, incentive system, bonuses, and commissions.

An incentive is a mechanism that links a reward or punishment to a

determined performance or behavior. (Roldán, 2016). For example, if you want
motivating a collaborator to achieve better performance can involve looking for
incentives that reward their effort, systems can be created for them
incentives that seek to align the interests of workers with those of the
company, this system must allow the company to achieve better
its objectives; achieving that workers exceed the expectations of their position.

Para desarrollar de manera adecuada un sistema de incentivos se deben analizar

the company's objectives and meet the following characteristics:

Clear objectives: define the goals and the time period in which they will be achieved.

wants to fulfill.
Determine the position: define the amount of resources allocated to the scheme of
incentives.
Establish units and points of measure.
Flexibility.
Transparency: collaborators must be perfectly informed.
Equality.

Likewise, when trying to comply with the incentive system, we realize that
there are various types such as:

The compensations are the whole set of strategies and incentives created
to match the performance of the workers, these can be the factor
decisive in retaining high-potential employees and incentivizing them to put their
commitment and achieving organizational goals.

Bonds are the most commonly used compensations as an incentive to increase

the performance of employees for a specific objective, whether it is time or
of volume. These are also used to retain high-performing collaborators.
potential with certain skills or specialized knowledge necessary for
the company.

And finally, commissions are used to incentivize workers to

a certain company, especially if they are salespeople. They receive their
salary according to two parts: a fixed part and a variable part. The variable is the one that depends on

the commissions received based on sales objectives, clients, volumes,

etc.

All these types of incentives help us stand out as a company and

also achieve better performance in our collaborators.

Analysis and job description

Each company has a different way of organizing itself and seeking strategies to
that their objectives are met, however, when we talk about human resources
It is very important that this includes a manual that describes the positions.
that each collaborator must occupy, many times we could think that said
Requirement should only apply to large companies, but that is not the case, since
that this helps us to have better control of the staff and with them assign a
valuation for each one.

Job analysis

The author (Romero Kooller, 2019) explains in his thesis that it is a process through
of which a job position is broken down into smaller units, that is to say
tareas que se espera que realice la persona que se va a contratar este puede
include the identification of job requirements and other characteristics of
job environment. Conducting an analysis is very helpful for selection,
career guidance, career planning, job evaluation
performance evaluation among others. Through this means, it is deduced, analyzed and

develop occupational data related to positions, as well as qualities

necessary to occupy the positions and characteristics of the occupant, which serve to
basis for salary evaluation and the utilization of collaborators.
 Job Description

According to (Romero Kooller, 2019), the job description is the exposition

detailed, structured, organized and systematic, according to the given protocol, of
result of the job analysis, these are related to productivity and
competitiveness of organizations, in this it should indicate the mission or objective
of the position the functions, the dependency, organizational chart and dependent persons

of responsibilities, work tools, and computer media.

The author (Lopez, 2005) defines description as 'a document that collects the
information obtained through analysis, reflected in this way, the
content of the position as well as the responsibilities and duties inherent to it
same.

Analyzing these two concepts, we can determine that it is of utmost importance that
companies have a job description and analysis, and also that
are up to date; since this way each collaborator is clear about what they will do and
what their work is worth, without excessive burdens from it. It also serves to fix
responsibilities in the execution of salaries, improves coordination and
organization of the company's activities, because this way there is no more confusion
positions and each person knows what is assigned to them, so when it is needed
information will be referred to the correct position and finally it is beneficial for the
valuation of positions as this can define a better salary accordingly
the activities they carry out.

Process for conducting job analysis

Like everything, to carry out an analysis, a process must be followed for it to be

efficient.
This consists of 3 stages which are also divided:

1. Planning: Here it is clarified the need to establish timelines, scope,

positions, methods of analysis, and criteria that must be included in the study. In
it is also explained that the work must be done carefully.
1.1. Determination of positions: Here it is stipulated which positions will be included in
the study, its characteristics, and the type of position.
1.2. Organizational chart of positions: it is established which level of positions will be included in
the organizational chart that will form the study.

[Link] schedule: the starting point is determined, that is, with what or
What levels of hierarchy will the study be conducted at?
1.4. Analysis method: is in accordance with the advantages and disadvantages that are
they offer and what will be needed to meet the study's needs.
[Link] of specification factors for analysis: in this e
they include two factors of generality which are comparison, that is
it is the schooling, experience, and a degree of responsibility. And the other is the
diversity is based on the fact that the comparison factors must vary
according to the type of position.
2. Preparation: this outlines how many people will participate in the study.
such as the necessary materials to carry it out.
3. Execution:
[Link] collection
[Link] of important data
[Link] report
[Link] report
Format for job analysis
Process for creating a job description

According to the article (Softgrade, 2022), it mentions the process for

make a correct job description.

1. Identify the job positions in your organization. That is to have the

updated organizational chart.
2. Select the position to describe. Once the positions are identified
One must choose which one will be started.
3. Gather the information: for this activity, help is needed from
holder of the position, the direct boss, and the facilitator.

4. Define a format for job descriptions.

5. Validate the job description created. That is, the holder of the position
and the direct boss reviews it, in this way the tasks can be carried out
necessary corrections and then authorize said document.
6. Communicate. Finally, communicate the document to the person who
performs the described position. This activity can be carried out through
a meeting whose purpose is to explain the content of the document and
to resolve any doubts that may arise.

Format for the job description

With all this, we can conclude that with a correct
implementation of job analysis the organization will improve the indices of
performance, selection of personnel, human talent planning and resignation
staff rotation, since it allows the recruiter and selector
better understand the needs of the company, and thus hire the candidate
indicated for that position.

Job Evaluation

In the job analysis, we observed that each worker performs different tasks.
activities, so each of them has a certain degree of difficulty, some
require more preparation than others, more care, etc. With this research
we will observe that this can be valued through various methods, and
depending on various factors, the ones we will analyze are the qualitative and
quantitative which in turn are subdivided. The first is divided into System of
alignment or prioritization and System of degrees and the quantitative in Model
factor comparison and Point Model.

According to (URRUTIA PANIAGUA, 2015) in the area of human resources

plays a very important role related to compensations, since
these have the task of arranging the positions according to their importance and from this
way to assign a salary in accordance with such valuation, this is what is known
like job evaluation but it is very important to remember that if you
Doing it incorrectly can lead to job dissatisfaction. This aims to
determine the relative value of each operational position of the company under study to
through a systematic process; its main objective is to achieve a
adequate representation of the hierarchy that facilitates organization and allows
adequately compensate workers
 Qualitative methods

They are responsible for organizing or classifying the positions considering each one as a
everything, without establishing the complexity in relation to others because they do not separate them

in its different elements. According to (Benge, 2017) with these they are classified as
the following way:

Alignment or hierarchy system

It consists of classifying all positions in order of importance, based on the
complexity of the functions to then arrange them in hierarchical order. It is
It is convenient for the process to be carried out by a committee, called the appraisal committee.

The importance of the positions for assigning their arrangement is judged in terms
of duties, responsibilities, and demands on the holder.

To do this, the following procedure must be applied:

Analyze and describe the positions

Classify the positions of the organization
Positions Salary
Maintenance 2,000
Receptionist 2,100
Security 2,500
Chambermaid 1,800

● Divide the positions and sort them into classified groups, given a
Rating for each position, 1 is the highest and 5 the lowest.
Positions Evaluating committee Average
Maintenance 1 2 1 3 1.75
Receptionist 2 2 2 4 2.5
Security 5 4 5 3 4.25
Chambermaid 3 3 3 2 2.75
 The final step is to create a new table where the positions are arranged.
by averages and thus a new salary adjustment is assigned.
Positions Evaluating Committee Average Salary
Maintenance 1 2 1 3 1.75 2500
Receptionist 2 2 2 4 2.5 2100
Chambermaid 3 3 3 2 2.75 2000
Safety 5 4 5 3 4.25 1800

Grading system
It is a simple, easy, and subjective method, as it consists of classifying the positions.
in previously established work degrees. A degree or classification of
positions are defined as a group of different jobs of similar difficulty or that
require similar skills to perform them. The degrees of the job
determinant based on the information derived from the job analysis.

Once the grades are established, each position is placed in its grade.
or appropriate class depending on how well its characteristics fit in a
degree. In this way, a series of work degrees is created. Then, a
different salary rate or wage for each grade.

Quantitative methods

They value each position and use predefined points (factors) as a reference.
the elements) that are the product of separation and differentiation to establish
in each one a level of value or importance. Among the quantitative methods are:

Methods of factor comparison

It consists of comparing the positions with each other, as in the method of
alignment, but unlike this one, each of the factors is compared here
individually and assigned a monetary value. Although this method does not go
Adding points, yes, it takes into account factors that will be given greater or lesser value.

according to the criteria established by a committee. This system is used

generally to evaluate staff, professional, and managerial positions.
Procedure:

Key or reference positions are selected as standards.

The common factors for all positions are identified, selected and
define precisely.
To determine a fair and equitable base rate of salaries or wages
The final step of this method is to compare and evaluate the remaining positions.

in the organization
Example taken from (Comparison of Factors – Human Capital, 2017)

factor 1 factor 2 factor 3 factor 4

order key jobs
habilidad responsabilidad esfuerzo fisico esfuerzo mental
1 Production Manager 5 1 2 1
2 Production assistant 4 2 4 2
3 Freight operator 1 3 2 3
4 Patnador 2 5 1 5

Points model
The point evaluation is the most commonly used method for evaluation.
positions. Under this method, positions are divided based on various factors
like skill, effort, training, knowledge, dangers,
responsibility, etc., points are then assigned to each of these
factors.

Points are assigned to factors depending on their importance for carrying out the
work, once assigned, they are added. Then, the job positions with a total
similar points are placed in similar payment degrees. The sum of points gives
an index of the relative importance of the jobs that are qualified.

Procedure:

To determine the positions to be evaluated

To decide on the factors they use to analyze and evaluate the positions.
Clearly define the factors in writing
To determine the degrees of each factor
 Monetary values are assigned to the points.

With all this, we can realize that applying a correct use of the valuation
positions will be a great help for our company. According to
(Lemus, 2017) there are 4 important factors to carry it out:

Generate and maintain internal equity

Positively impact the work environment
Know the salary competitiveness
Plan costs
Performance Evaluation
This activity is one of the fundamental tasks that every company should
to lead and likewise convince the collaborator that the opportunity and development
of the company are for the benefit of both. In the book (Rete, 2007) it
they mention several definitions from various authors, the first by Morales and
Valendia (2003) defines it as a technique for managing human talent that
allows for improving the interaction between the employee and the company, to achieve a
mutual benefit, as the creation of conditions for a performance
the company will be able to produce goods and services that the market demands and
to allow the worker to apply their skills, inclinations, and satisfy needs.

Robbins and Coulter (2000) define it as the process by which it is evaluated

personnel with the purpose of making objective decisions regarding resources
humans aimed at controlling the behavior of workers.

And finally, Chiavenato (1998) considers performance evaluation as a

systematic appreciation of the performance of the individual's development potential in
the charge through which the value, excellence, and you are stimulated or judged
qualities of a person.

Objectives of performance evaluation

The author (Rete, 2007) mentions in his book that there are 4 basic objectives of the
performance evaluation:
 Optimize the results, product of the performance in the position, of the
individuals at work.
Justify the assigned remuneration, this is understood to be through said
evaluation as a boss will observe whether the salary of the collaborators is
suitable for the work they do.
Improve employee performance for their benefit and the organization.
and to substantiate needs for improvement to establish plans for
development and growth.
Identify individuals to consolidate them as a capable resource to
generate continuously growing and renewing productivity in accordance with the
internal and external needs.

Factors to evaluate

Characteristics of the individual:

Willingness to cooperate
Trustworthy
Initiative
Attitude
Personality
Leadership
Talent
Enthusiasm

Knowledge and job performance:

Frequency
Punctuality
Good management
Safety habits

Objective performance

Amount of work
 Work quality

Benefits

The benefits will be for both the company and the collaborators.
company because the products or services are of better quality which grants
competitive advantage and generates greater profits; so it could be granted
better working conditions and greater benefits for employees.

Performance evaluation allows for the creation of personal improvement plans.

training, development, and promotion while aligning goals
individuals with those of each department and these in turn with those of the
company.
In addition, the implementation of performance evaluation allows leaders
detect outstanding or weak performance of a collaborator, identify
growth and development opportunities according to profiles, skills and
staff competencies to optimize growth levels and even
develop career plans focused on leaders and other employees with
potential development.

Evaluation methods

Pair comparison: it is the method that compares employees by pairs.

one-on-one in each factor or criterion to be evaluated. This is better for companies
small ones because if there are many it would take a long time to carry out the evaluation. By

Example here evaluates collaborator A vs B and notes which one is better, hence A.
vs D y cual es mejor y así se le asigna una puntuación.

Interview: it is a consummate and effective method, based on the interview and the expert.
must have expertise to carry them out, the ability to extract, analyze, emphasize and
identify data and information. Here, the collaborator from each area can be cited, and
conduct the interview, but just like in the previous one if it is a large company
it would be too time-consuming.

Critical incidents: it is the method in which extreme behaviors are evaluated with the
the idea that human beings exhibit extremely positive characteristics or
negatives that result in certain outcomes as a product of that attitude
paralyzed. An example of what this type of evaluation reminds me of is when to
the teachers in the secondary schools were evaluated by the supervisors without
to notify and they asked for the plans and to carry out the activities
correspondientes.

Descriptive analysis: Technique through which is evaluated in a detailed manner and

detailed functions, activities, and operations that impact the exercise of
cargo.

Graphical method: method in which performance is analyzed through factors of

evaluation previously defined and determined by an expert and in work
together with the evaluator. An example could be the assessment carried out on
the teachers at the end of the semester.

Simulation: a technique that analyzes and assesses employee performance through

an artificial situation created, controlled and similar to a real one. This reminds me
to job interviews where you are asked to visualize a situation and from this
you will find a way to solve the problems that arise.

Results-based evaluation: the foundation for overall evaluation by results

achieved and the inputs for the analysis of the procedures that were carried out in the
results consist of the objectives set among other factors.

Dichotomous choice: it is the method that evaluates the performance of individuals in

his position through phrases that describe the functions and facilitate the choice of
one of the two possible alternatives (yes and no).

There is a method: a method that evaluates employee performance using as a source

of information the job descriptions of the positions of each of the
that will be evaluated. This method requires definitely specific information in
this lies its limits and at the same time its potential.

Self-assessment: a technique that allows the employee to self-analyze in relation to

in the exercise of his position, the expert must make him aware so that he describes as much as possible

as detailed as possible, the product of your self-evaluation and indicate the benefits, the
profits and the advantages that are obtained as long as it is truthful. A
an example can be when we are asked to recognize our weaknesses and
fortresses.

360 Evaluation

This is based on the analysis of feedback which is fundamental, since

that the results obtained through them tend to be better. In this
evaluation involves direct supervisors, subordinates, internal and external clients,
and colleagues. This helps us measure the job performance of employees
and includes questions about measurable and numeric behaviors as well as others
related to opinions.

In the article (What is a 360-degree evaluation?), it mentions that one of the

The main advantages of 360-degree competency evaluation are
confidentiality. When the evaluation is completed, the results of each
The collaborator is known only to himself and to his superiors.

In addition, this achieves:

Medir el rendimiento de los empleados

Evaluate the competencies
Design training plans
Serve as a basis to implement career and succession planning

The evaluation is quite effective since it provides perspectives that in

Many times, collaborators do not usually see when evaluating their work.

The evaluation provides collaborators with the necessary information about the
skills, behaviors, and competencies that the organization requires to
carry out the organizational strategy.

Conclusion
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