Factor comparison

Meaning & Definition

Factor comparison, as a means of establishing the comparative value of various jobs based upon their attributes (such as the factors you are examining, which can be skills, responsibilities, effort and working conditions). Organizations utilize this tool to help in developing equitable wage structures and preserving equity within the organization regarding employee compensation.

Important features of Factor Comparison

• Helps create a fair pay framework based on the value of the job.
• Supports equal pay for employees with various jobs in an organization or multiple positions within an organization.
• Improves wage management procedures for employee compensation and job evaluations.
• Creates transparency to all parties involved regarding how a wage was determined.
• Assists HR with planning and managing compensation strategically across their workforce.

Legal & Regulatory Considerations 

While factor comparison does not necessarily depend on any specific statutory compliance, companies will be able to use the method instead to support fair wage practices and their own internal policies on compensation.