Advantages And Disadvantages Of Financial Compensation

So this a very good news that in the new incentive plan there is a management by objective , it will permit to salespersons team to be more efficient , and they will

Henderson printing is a mid-level company. The company operates some compensation models for its personnel. Through these models, the employees receive rewards for the labour they render to the enterprise. Henderson printing pays its employees by giving them regular salaries for their services. These are direct payments for the work they do in this company. Secondly, the employees are given pay raises even though this depends on the employee’s initiative to ask for a pay rise from the owner (Davis, 2013). Lastly, the employees are also accorded some merit bonuses every Christmas time. The merit bonuses are based on their contribution to

Compensating the organizations sales staff through the use properly designed performance pay will lead to profitable sales for the organization. Once again linking compensation to performance will benefit the organization in its ability to pay. It is important to design the compensation of the sales staff in a manner that encompasses all of the organizations goals as communicating with production staff will be a key component of the High Involvement Strategy, and it is important for the organization to demonstrate a commitment to the sales team that the relationship is not just purely financial. Therefore direct compensation for them should consist of a minimum base salary upon which their commissions are added.

While gathering the research for this paper I came across numerous compensation strategies. As with anything in life, we find a lot of possibilities, however there were three main structures that jumped to the forefront.

For the most part, a company’s compensation policy aims to ensure that employees are compensated in a fair and competitive manner. However, the compensation objectives employed by different companies can vary widely. This is especially true when taking into account wages vs. skills, competitor salaries, pay-for-performance, and other elements of compensation, like overtime, incentives, etc. (Snell, Morris, & Bohlander, 2015).

Additionally, it is imperative to note that compensation does not automatically imply rewarding in the monetary form. It also includes other benefits such as, health care benefits, work-life balance options, as well as employee perks and incentives. Nonetheless, this day and time employees not only work for the money, but also place equivalent importance on other aspects of compensation.

“Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs.” Martocchio, J.J. (2013) A Human Resource Management Approach. Compensation as most know is the hourly or annually paid. Compensation consist more of just hourly or annually pay. Organizations create monetary compensation process to reward their employees for their job performance. Monetary compensation is the core of

My research below will start with salary compensation which can easily be defined as a set monetary amount that an employee receives for the work that they do based on their specific job classification/coding only. I’ll follow that with performance-based compensation which pays and rewards employees based on their individual performance which allows for individual growth. Lastly I’ll provide research on longevity pay which focuses on additional pay or wage adjustments based solely on an employee’s length of service.

Indirect compensation has a large effect of boosting job performance. “The biggest problem with a straight-pay structure is that employees quickly become used to earning a certain level of income regardless of the results they produce. Promotions do usually increase pay, but the motivational influence stems from recognition, increased responsibility, more challenging work and a personal sense of accomplishment all of which are motivating factors, according to Herzberg.”

With the constant change in today’s business world, to have a competitive advantage makes it difficult for employers to attract and retain the most talented employees. Identifying the company’s compensation strategy ensures the organization offers the right pay and manages the pay increases to retain top talents. When we hear the word compensation we think about compensating an employee for their work performed, but there

The reading course material required for this class, and the information reviewed throughout the course are the foundation for the content of this Guide. Each of the five key compensation processes will be reviewed in the context of:

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

This paper will discuss in some detail about what goes into a good salesperson and how to get clients. It will also discuss six total rewards program. Define the behaviors of the sales force that are targeted with the compensation plan. Next, look into how a value proposition is accomplished for current and future employees at car lot. Specify how fascinated future salespeople may be in the near future.

Official compensation comprises of both an altered part and also a variable (or “at risk”) part which comprises of different STI and LTI components that suitably reflect executive's’ duties, responsibilities and outcome against objectives. It guarantees that compensation suitably attracts and motivates kin of the most elevated nature. The variable part includes: -

It is believed that compensation plans are a legitimate way to express appreciation in employee’s productivity and efforts and an excellent way to retain employment. Some of the main reasons to institute a compensation plan are (Vivekanand, p.2):