Tips for Developing a Defensible & Equitable Compensation Plan Structure

Tips for Developing a Defensible & Equitable Compensation Plan Structure

Tips for Developing a Defensible & Equitable Compensation Plan Structure

In order to ensure a defensible and equitable compensation plan, organizations should adopt a step-by-step process to oversee equal pay processes. By writing detailed job descriptions, performing job valuing, and evaluating jobs based on a number of critical factors, you can ensure you’re getting the fullest possible picture of each position to aid you in making informed pay decisions. Here, we share some strategic tips you can incorporate into your processes:

Job Descriptions

An equitable compensation plan begins with your organization’s job descriptions. Clearly identifying a general overview of the position, as well as specific duties, required education and experience, and necessary skills, provides an important foundation on which you can build a solid compensation plan. Don’t forget to include factors such as licenses, certificates, accountabilities, physical demands, contacts with public and other employees, work environment, and any other information that may be important.

Job Valuing

Once you have detailed job descriptions in place, you can then perform job valuing, or your internal value proposition. As we approach a new era in equal pay, the interpretation of comparable pay will require employers to reevaluate their jobs based on different criteria. Complete job valuing using a consistent set of factors. Provide a non-biased, compensable factors process to determine which jobs are substantially similar based on proven factors and weighted points.

It’s important to note that employers should achieve a healthy balance between external and internal factors when aiming to create a defensible, equitable compensation plan. Relying exclusively on one or the other can create its own biases, so there’s no guarantee that using market data alone will hold up to the scrutiny of equal pay regulatory auditors and investigators. Thus, it’s important to both keep an eye on the external market and perform internal audits.

Job Evaluation

When performing job evaluations, consider the position’s knowledge and skill requirements, including general experience, education, and mental demand. Also factor in initiative and ingenuity, along with analytical and problem-solving skills. Consider the job’s level of responsibilities, as well as the internal and external communications that the position demands.

External Value Proposition

When analyzing external sources, perform job matches to make sure the positions you’re looking at are similar. Match the data points in order to perform an effective comparison, and then see how you’re paying compared to market prices. Assess for pay competiveness, bearing in mind that you should look at compensation from both an internal and external standpoint.


HRsoft is a cloud-based, High Impact Talent Management™ software company that specializes in improving employee engagement and retention for mid-large sized employers.  Our High Impact Talent Management System™ includes modules for compensation management, applicant tracking, management software, total rewards, stay interviews, and content management. To learn more about our Compensation Management Software, COMPview, click the button below!

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