3. Projecting Base Compensation Costs

Aims and objectives of this chapter

• Explain the importance of projecting base salary costs

• Explain the connections of financial planning and budgeting to compensation planning

• Explain the various components of base compensation flows

• Explain the methods of improving the accuracy of base salary projections

• Demonstrate the formula for the various components of base compensation

• Explain the cash flow impact of base compensation increase programs

• Explain the concepts of payroll level rise and cost to payroll

Total compensation costs are often the highest direct and indirect expense in any organization. However, an analysis of the various elements of the total compensation is not always accomplished ...

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