Describe several of the most important factors that affect an operation's compensation cost. ...

These factors include the volume of the operation's revenue and its payroll standards along with local and regional pay levels and the amount competitors pay. Other factors include the knowledge and skills required of employees, collective bargaining agreements, if applicable, and other factors including benefits.

Managers must ensure that pay ranges are fair for to the employer and employees. Pay ranges are frequently reviewed annually and adjusted as necessary to stay current with competitors and to retain satisfied employees.