The two basic approaches to generat

The two basic approaches to generating compensation budgets are the top-down and bottom up methods. The top-down method involves estimating the pay increase budget for an entire organization and then allocating designated amounts to the different departments. Once supervisors know how much the wages have increased for their units, they are expected to make pay increase recommendations for each member based on relative performance and get them approved by a second level supervisor.The bottom-up method of budgeting requires supervisors to monitor the number of people working in their units and to make careful wage increase decisions. Supervisors need to understand the budgeting Process; they need to know the guidelines for making pay increases, and they need to have accurate information on the performance of their members.Test Your KnowledgeCan you explain the procedure for establishing pay grades and ranges?Can you describe how to calculate a compa-ratio and explain how compa-ratios are useful?Can you define red -circle rates?(And blue or green?Can you describe the methods and consequences of adjusting the wage curve(i.e. for InflationCan you explain how administrative controls can be placed on pay-rate decisions