Compensation managers are fully responsible for the research, establishment and proper functioning of the pay system of a company. In doing this duty, the compensation manager must thoroughly research the upcoming competitive markets for employee remuneration. They must seek out ways to ensure that pay rates are fair and just enough to recruit and retain employees.
In larger organizations, the compensation manager may specialize in certain specific areas such as market pay studies and job classification. At government level, it is he who establishes the pay grades for governing the level of pay for employees.
A compensation manager at a large company is often ably supported by staff specialists. They will conduct salary surveys to understand how their pay rates compare with that of other companies. They might even go further and team up with established online sites to do a market comparison of pay in respect of number of employees, region and responsibilities in the job.
The compensation manager holds a very important position in an organization as he must ensure that the pay scale of the company abides by Federal Laws and Regulations. He must also oversee the performance evaluation system of the company. He can and may introduce certain employee-centric programs such as merit raises, bonuses and pay-for-performance. However, there may not be any post of a compensation manager in a small or medium scale organization. Since in these organizations an employee must wear many hats, the overall responsibilities or the duties that are supposed to be performed by a compensation manager are usually handled by the HR generalist or the human resource manager.
This basically implies that the work of a compensation manager is of paramount importance to any organization but the post is not exactly indispensable. Nowadays many countries are going through economic turmoil or recession; so it is not always a wise idea to appoint another high-paying specialist in the post of compensation manager. The human resources manager of many organizations doubles up as a compensation manager. This practice is also highly prevalent in some of the large level organizations.
In general, a compensation manager must hold a bachelor's degree in human resource and should have significant experience in this field; preferably 3 – 10 years. There are some employers who might even request a master's degree. In these cases a higher degree in human resources or labor relations will help your cause.
Certifications are usually not required but if you want to aspire to become a benefits specialist first, then you may have to acquire the certificate given by the International Foundation of Employee Benefit Plans (IFEBP). Lastly, computer skills like knowledge of human resource information systems are highly recommended along with key decision-making and managerial skills.
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