Compensation and Benefits

Compensation and Benefits represent fundamental components of human resource management that significantly impact employee satisfaction, retention, and organizational performance. Within the SHRM Certified Professional framework, these elements form a strategic part of total rewards systems. Compensation encompasses all monetary payments provided to employees, including base salary, variable pay (bonuses, commissions, profit-sharing), overtime, and merit increases. Effective compensation strategies align with both internal equity (fair pay relationships among positions within the organization) and external competitiveness (market-comparable pay rates). Benefits constitute non-wage compensation provided to employees in addition to their salaries. These typically include health insurance, retirement plans, paid time off, disability insurance, life insurance, and various wellness programs. Organizations may also offer voluntary benefits where employees can opt-in and sometimes share costs. The SHRM CP emphasizes strategic approaches to compensation and benefits that support organizational objectives while meeting employee needs. HR professionals must design systems that attract qualified candidates, retain top talent, motivate performance, ensure compliance with laws and regulations, and manage costs effectively. Key considerations include: 1. Legal compliance with regulations like FLSA, ERISA, ACA, and state wage laws 2. Job evaluation and market pricing methodologies 3. Pay structure development and administration 4. Performance-based compensation systems 5. Benefits selection, administration, and communication 6. Cost containment strategies balanced with competitive offerings 7. Executive compensation considerations Modern trends in this area include pay transparency initiatives, flexible benefit packages, student loan repayment assistance, expanded parental leave, and remote work stipends. SHRM CP professionals must continuously evaluate their compensation and benefits programs against organizational goals, budget constraints, industry benchmarks, and employee preferences to maintain competitive advantage in talent acquisition and retention.

Compensation and Benefits represent fundamental components of human resource management that significantly impact employee satisfaction, retention, and organizational performance. Within the SHRM Cer…

Concepts covered: Geographic location, Nonqualified plans for highly paid employees, Development of a base pay system, Developing pay levels, External competitiveness strategies, Labor market competition, Legal constraints on pay issues, Market compensation surveys, Minimum wage/overtime, Motivation theories, Pay discrimination and dissimilar jobs, Pay programs, Role of job analysis in determining compensation, Team rewards, Cost-benefit analysis, Domestic partner benefits, Employee assistance/wellness programs, Family-oriented benefits, Family and Medical Leave Act (FMLA), Child care, Health care cost containment, Managing employee benefits, Life insurance, Long-term care, Outsourcing, Paid leave plans, Regulation of retirement plans, Severance pay, Survivor's benefits, Time off and other benefits, Unemployment insurance, Workers' compensation, Monitoring compensation costs, Union role in wage and salary administration, Flexible spending accounts, Internal alignment strategies, Types of retirement plans, Health care plans, Statutory vs. voluntary benefits, Determining pay increases, Skills-based pay, Regulation of health insurance programs, Market pressures, Federal insurance programs, Pay grades, Prevailing wage, Global employee benefits, Wellness programs, Educational benefits, Elder care, Financial benefits, Early retirement programs and buyout, Sabbaticals, Social Security, Fair Labor Standards Act (FLSA), Job evaluation point-factor system, Compensation of special groups, Affordable Care Act (2010) (ACA), Private group insurance