Compensation

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Pay is one of the most important elements of any organization. It is what compensates, drives, motivates, and rewards employees for the work they do. Or it does the opposite of these things. What is a strategic compensation strategy? Simply stated, it is the compensation of employees in ways that enhance motivation and growth, while at the same time aligning their efforts with the objectives, philosophies, and culture of the organization (Bohlander &Snell, 2010. Compensation includes all forms of pay and rewards received by employees for the performance of their job. Employees desire compensation systems that they perceive as being fair and commensurate with their skills and expectations. An effective compensation and benefit system…show more content…
A benefits program should maximize employee’s needs. The cost of the total benefit package needs to be consistent with the ability of the organization to pay for the benefits. If the cost of a benefit rises is could affect employees salary. Some benefits, such as health insurance, can have a negative impact on other benefits. Individual Equity is focused by the strategic criteria which is associated with the strengthening of performance. A short term incentive like share in the profits, costs, sales ROI, ROA can be used to evaluate the performance of the employees, who can kept engaged and committed to the company by these methods of rewarding them for their commitment. An organization therefore, has to design a compensation system which rewards its employees for their efforts if it decides to see the ROI for its most valuable asset (Henderson, 2006.). It also has to keep changing these indicators from year to year, which also would work as an incentive to better performance on the part of the employees (Henderson, 2006). Creating a new compensation philosophy is very important when trying to attracted employees. Holland Enterprises new compensation philosophy is as follows: Our organization is committed to providing a total compensation package that enables our organization to attract and retain highly skilled and talented employees for all positions. A competitive total compensation

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