THE COMPLEXITIES Of pay administration in the modem business firm,

and the problems it poses to management, have been well recognized.

A periodic sm vey of senior line and staff executives, for instance, con-

ducted by Sibson & Company (now covering over 400 executives and

E87 companies) dearly shows that an overwhelming number of execu-

tives consider compensation the second most diiBenlt personnel prob-

lem, both for their companies and for themselves.*

There is every indication that the complexities and therefore the

time and cost invoh,ed in pay administration will continue to increase.

These increasing complexities are due to the increasing number and

diversity of positions which typically exist in enterprises. The greater

technology and diversity of activities inherent in these proliferating

positions further complicate the matter. Still other factors that contrib-

ute to the complexity of pay administration include the phenomenon

of steadily rising incomes, the continued complexity of and change in

tax la,ws, Internal Revenue Serviee regulations, and Aeeounting Prin-

ciples Board regulations. New factors include the growing pressures

for change arising from the changing expectations and attitudes of

* The first order of priority in employee relations identified by nine in ten

general managemm~t executives is, simply, how to increaso the productivity of

employees at cvcry level of tim organization.