Mar 31 2020
Human Resources and Training
The majority of us are in lockdown thanks to this pandemic they call COVID19. Firstly, I certainly hope that everyone is keeping safe and healthy. Secondly, this is a brilliant opportunity to learn and share, thus this blog of mine.
I came across a number of professionals in various organizations across the GCC region who hold the titles of compensation analyst, or something very similar. When I asked them about their work, they explained that they process payroll, with all of its intricate nuances, every month. Granted, this is a very important job. It is thanks to these people, to their eye for detail and to the elaborate payroll analysis they do, that we receive our salaries accurately and on time. This, in their view, explains their title: Our salaries are our compensation for the work we do for our organizations, and the people who ensure we get paid on time analyze the entire payroll to ensure the timeliness and accuracy of the salary payment. Therefore, they are compensation analysts!
However, one could also interpret this title to indicate someone who analyses the compensation system used by the organization and compares it to the best practices in the market place. It could, in addition, point to someone who analyzes the potential challenges faced by the organization in relation to its compensation practices, and the impact that may have on the motivation levels or the satisfaction levels of its employees.
So, I decided to write about the difference between compensation and benefits (C&B) on the one hand and payroll on the other. C&B is a sub-discipline of human resources, and it caters to designing the right compensation and benefits systems and policies that guarantee fairness and equitability for employees and organizations alike. It is sometimes referred to as total rewards or remuneration. This is a highly important function of any human resources (HR) department, and it is central to all that HR does. In order for C&B to achieve what it is set to do, C&B professionals go through a well-defined cycle. They start off by analyzing jobs within the organization to write descriptions -referred to commonly as job descriptions(JD)- that capture the essence and structure of each job in the organization. The format chosen for the JD is determined by the next step in the cycle, which is job evaluation. Job evaluation determines the level of importance of the job within the organization. There are many methods to do so, but the key factor here is the JD format. It must be chosen to suit the method used in job evaluation. Once that step is complete, C&B professionals conduct a market salary survey to compare their organization’s jobs to those in the market and calculate the average pay per job. Based on the results, they move to do the grueling work of designing a salary scale for the organization (or redesigning the existing one) along with the related allowances and benefits. This must be done in line with the organizational business strategy. In addition, C&B professionals create all the policies and procedures related to the new system. The final step in the cycle is implementation, and that is the step referred to as payroll.
It stands to reason to conclude that payroll, albeit being a very important and needed function in any organization, is only a part of the compensation and benefits function. So, is compensation analyst a proper title for a payroll officer? In my opinion, it can be misleading and I prefer the more direct title, payroll officer. Having said that, if an organization insists on using “compensation analyst”, I would add a hyphen followed by the word payroll to read as follows: compensation analyst – payroll!
About the Author
Mr. Ibrahim Al Yafi is a partner with Meirc Training & Consulting. He holds a bachelor of science degree in engineering management from the University of Missouri Rolla, USA and a master of business administration with emphasis on strategic management and international marketing from Southern Illinois University, USA. Ibrahim is a senior certified professional by the Society of Human Resources Management (SHRM-SCP). In addition, he is an associate certified coach (ACC) by the International Coach Federation (ICF).More