Strategic Compensation: A Human Resource Management Approach, 9/e

Internal Consistency

1. 1 Explain the concept of internal consistency.

Internally consistent compensation systems clearly define the relative value of each job among all jobs within a company. This ordered set of jobs represents the job structure or hierarchy. Companies rely on a simple, yet fundamental principle for building internally consistent compensation systems: Jobs that require higher qualifications, more responsibilities, and more complex job duties should be paid more than jobs that require lower qualifications, fewer responsibilities, and less-complex job duties. Internally consistent job structures formally recognize differences in job characteristics that enable compensation managers to set pay accordingly. Figure 6-1 illustrates ...