Company Uses For Reward Employees For Performance

Employees are driven by a numerous motivators to stay in the company, but the biggest is simply getting a regular paycheck. Ensuring that the compensation system is effective is not just important but critical. A few organizations evaluate their compensation system to identify any shortcomings. It is always important to look at how the organization can improve its compensation strategy to attract the best candidates who can innovate and lead the company in the industry. In order to retain high performing employees, the compensation plan should offer more than just a competitive salary. A good example is Costco and Walmart, on the benefits side, 82% of Costco employees have health-insurance coverage, compared with less than half at Wal-Mart.

Compensation systems can take on many forms, all of which have positives and negatives related to it. However, certain components are noted to be determinants of solid compensation plans. One agreement of a solid compensation system is the use of incentives. “Clearly a successful companies set objectives that will provide incentives to increase profitability” (Needles & Powers, 2011). Incentive bonuses should be measures that the company finds important to long-term growth. According to Needles & Powers (2011) the most successful companies long term focused on profitability measures. For large for-profit firms, compensation programs should offer stock options. The interweaving between the market value of a company’s stock and company’s performance both motivate and increase compensation to employees As the market value of the stock goes up, the difference between the option price and the market price grows, which increases the amount of compensation” (Needles & Powers, 2011). Conclusively, a compensation plan should serve all stakeholders, be simple, group employees properly, reflect company culture and values, and be flexible (Davis & Hardy, 1999; The Basics of a Compensation Program).

The right compensation program will depend on the organization’s business strategy and goals. To achieve these, an organization must recruit and select the best possible employees. To attract such employees, there must be an attractive compensation plan. Competitors will be offering different payment options, this may be based on pay rate or special perks, and a company’s stock options. Organizations must be aggressive yet reasonable to compete with competitors. Retaining and encouraging employees to perform at their best may be achieved through an immediate incentive award

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

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:

Compensation strategies within a company are very important. Companies need to invest in offering compensation benefits to their employees because they enhance an employee’s wiliness to stay long term with the company. They also provide a positive foundation between the employee and employer. If an employee is happy and content with the company they work for then this will benefit the company and the employee. The employee will be motivated to do a good job for the company and in the long run the extra money and work that the employer puts in for the added benefits will pay off. In this report you will see how Paid Time off (PTO) , bonuses and merit pay increases will benefit not only the employee but the business.

The dominant purpose of this article seems to be to convince the reader that a proper performance related reward system will motivate employee towards excellent work performance and achieving organization objectives provided there is sufficient resources in place with necessary training provided. This article discussed in details on the “performance related reward system” as a tool used by management to promote excellent work performance among employees towards achieving organization objectives and goals. The authors have elaborated various types of performance related rewards system and its relationship to work performance. The advantages and disadvantages in implementing the “performance related reward system” are also highlighted in this

This paper will examine setting the stage for strategic compensation and bases for pay. There are three main goals of compensation departments: internal consistency, market competitiveness, and recognition of individual contributions. Internally consistent compensation systems define the relative value of each job among all jobs within a company. (Martocchio, pg. 22, 2011) With this system companies want employees to be paid more based on their qualifications and responsibilities. They believe someone with less experience should be paid differently. To determine such evaluation companies use job analysis in order to provide job descriptions. The job evaluation is to determine pay according to a particular position. Market-competitive

Compensation is a critical aspect of every organization and appropriate consideration and strategic planning must be conducted in regards to compensation in order to ensure success of the organization’s mission statement. I believe that most managers fail to recognize the importance of compensation in the strategic planning process and write it off as something that they have little input or value added. They fail to consider that they have the responsibility to analyze compensation in the strategic planning process in order to select the appropriate compensation plan that will allow them to meet the organization’s mission with the least amount of resources possible. Any organization, whether it is

To effectively understand compensation packages, it is critical to understand agency theory. Agency theory represents the differences in goals between management (agent) and the firm’s shareholders (principal). According to Murphy (1998), compensation plans are a solution to the goal incongruence between management and its shareholders and will be explained later in this paper.

Total compensation influences productivity in numerous ways. For instance, “compensation practices that link pay to the company’s financial performance or other indicators of productivity can help focus employees’ attention on finding new ways to reduce costs and increase revenues”(Jackson, S. E., Schuler, R. S., & Werner, S. 2012). Two preferred ways employees contain cost is by changing the pay mix and by emphasizing nonmonetary compensation.

Most companies offer compensation plans to attract and retain the best employees resulting in high level of performance to make a strong and positive work environment. The largest expense for most companies in today’s competitive market, it’s the payroll and any other costs related to rewarding the employees. A well-structured compensation plan consists of, pay scale; how much they want to pay their employees and most important, what type of employees the company wants to attract? Reward programs (incentives and bonus pay), benefit packages (health insurance, 401k plans and paid time off), and company perks such as; wellness programs, tuition reimbursement, and child care services. The company needs to be competitive both in the labor market

There is a clear business case for strategic compensation. Well managed rethinking of performance management, rewards and benefits leads to better business results, stronger capability, higher staff retention levels, heightened motivation and employee satisfaction. The success stories of organizations leading the field in strategic compensation prove that how employees are motivated, rewarded, recognized, fulfilled and challenged to perform better is a key differentiator between excellence and plain mediocrity.

The need for a reward system in any type of human service organizations is strong, the human service worker deals with someone else’s problems every day, then goes home to deal with their own. The pay range for this work is low to average, and the stress and disagreement level is high. These employees endure a host of emotions from clients on a daily basis, which is bound to affect the worker at some point. The management in these types of organizations should reward the employee for a job well done, or just a reminder to them that they do make a difference. Human service organizations are generally ran on a tight budget, so monetary rewards are not usually possible; the management must find other ways to reward the caring and dedicated

The Term, Compensation covers all employee earnings and rewards employees receive as payment for work completed. Armstrong (2006) define rewards management system as the formulation and implementation of strategies and policies, with the goal of rewarding employees fairly, equitably and consistently in accordance with their value to the organization and thus help the organization to achieve its strategic goals.