A mathematical programming approach to salary administration

This paper discusses a mathematical programming approach to designing an executive salary administration guide based on the importance of the positions and the quality of job performance. The two fundamental concepts of the salary system that is considered in this study are the compensation plan and the classification plan. The purpose of the compensation plan, and the objective of the paper, is to develop a salary guide for given results from the classification plan. The paper assumes an understanding of basic principles of job evaluation and some exposure to formulation of mathematical models. Emphasis is put on the formulation and linearization of the models, rather than on development of solution techniques that would exploit the particular structure of the models.