Essay about Fair and Equitable Compensation

carefully planned out and considered, the total closure or failure of the organization could be at hand in the near future. In our modern age, employers know that salary is not the only factor that should be considered and that salary alone will not lead to better or more highly profitable workers alone. This is why compensation planning is important and why pay should have some connection between performance and compensation. This is why the human resources department should consider many monetary and non-monetary factors when considering how to properly compensate and motivate employees (Dessler, 2013).

The challenges of an organization can influence the performance of an organization from a satisfaction with pay (Gomez-Mejia, Balkin, & Cardy, 2016, p. 296). The employee salary within an organization is a huge cause for turnover of employees (p. 296). First, the topic of employee salary is of great importance for the current and potential workforce (Lee & Lin, 2014, p. 1577). In addition, employees that have the perception on receiving lower compensation that others within their market will lack in performance and have a desire to leave the organization (p. 1577). In retrospect, the regular evaluation of compensation within the organization is vital to the reduction of employee turnover (p. 1577).

Base pay will be determined according to the value of the skills and competencies an employee has acquired on the production floor, there will be the incentive for skill development as employees base pay will increase as their skill proficiencies enlarge. This will also create mobility between jobs in the organization as many members will be proficient in numerous jobs.

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).

The term compensation refers to all forms of financial returns and tangible benefits that employees receive in exchange for their time, talents, efforts, performance, and results (Bernardin & Russell, 2013) Presumably, employees are motivated by the compensation they receive in all combinations to include their benefits packages. Naturally, employees want to be able to take care of their family to include having good medical coverage and other related benefits. Equity is said to occur when a person perceives that the ratio of his outcomes to his inputs is equal to other’s outcome/input ratio (Salvendy, 1976). Of course, employees want more money, and companies want more work out of each employee. With the cost of benefits like health insurance continuing to rise, companies have to take the higher cost of benefits into consideration when implementing pay

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.

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

The intent of this assignment is to develop a user-friendly tool that may be applied in the workplace to document Compensation processes and to guide a practitioner in completing the critical steps of each process. The purpose of this assignment is to assist in describing each component of a compensation management system, to develop a practitioner's guide for several of the key compensation management tasks covered in HR511 Total Rewards.

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:

Many people will argue against me that the wage gap no longer exists because of the Equal Pay Act of 1963, but it is far from true. Women everywhere are still suffering because of sex discrimination in the work force and it is even worse for women of color. Award winning journalist and author Sophia A. Nelson said, “In 2016, women on average were paid 80 cents for every dollar men earned. If you break the pay gap down by race and ethnicity, it’s even worse: black women were paid 63 cents; Latinas, 54 cents for every dollar white men made.” But the wage gap isn’t the only problem women are still facing.

Pay and Rewards – pay and rewards attract, motivate and retain staff. The employment contract which lists rewards, whether it be pay, bonus or benefits, can remove animosity amongst employees and employers. However, recent research reveals that employees are no longer motivated by a financial reward alone, but

Recognizing and rewarding high-performance is a key recommendation for any approach when managing any merit pay program (HRIS 2012). Merit pay is a compensation system where base pay increases and is determined by an individual’s performance. Using a merit pay plan is a good way for an organization to reward high performance is one benefit when using merit pay programs. The first step in implementing or improving a merit pay program is to have a solid performance management program, and this is another way a merit pay program is beneficial. Merit pay is a way to be successful and effectively implement merit pay with a uplift in salaries, and this is a third way using a merit pay program is beneficial to an organization. There are some drawbacks when using merit pay programs, such as paying some employees more than others. If you pay high-performing workers more than low- performing employees, the high- performers may stay, causing the low- performers to complain or leave the organization. A second drawback in using merit pay program is that employees become less motivated if not paid to their satisfaction. For example, if employees feel they should be making more money for their performance, this causes them to have low self esteem, and want to find employment at other organization. The last drawback associated with

In today’s competitive workforce, compensation and benefit packages plays a crucial role on recruitment and retention for both the organization and the employee. Bumpbie finds itself in a situation where it could positively affect its employee’s morale, turnover rate and longevity; by making a strategic decision to implement compensation and benefit packages that will encourage current workers to stay and entice new applicants. Money is not always the inherent reason businesses experience high turnover rate, the constant shifting in the job market will always be a contributing factor as well as employee’s moral. Mayhew, R. (2016), explains that an “employee compensation plan” refers to all the components offered as well as the way in which they are paid, and the reason behind the employees getting the compensation case bonuses, salary increases and incentives. The fact that there are voluntary and mandatory benefits that organization provides to their employees give employees the freedom of choice, as well as the option to make the whether to stay with or leave an organization based on the benefits it provides. Variable Pay is also an option that some employers offer their employee which is performance based or results oriented. Whether it is profit sharing, merit based programs or incentive bonuses; it all comes down to which organization can provide employees with the compensation or benefits packages that best satisfy their needs.

Creating and implementing of incentive pay system supports to solve organizational problems to align the preferences of business and employees. In addition, the system serves as an organizing tool to identify and attract the most capable employees since companies need to deliver the product or

As cited in Zhou, Zhang & Montoro-Sa ́nchez (2011) reward management is a key function in HRM systems in modern enterprises, playing an important role in attracting, retaining and motivating employees (Milkovich and Newman, 2004). Furthermore, Schuler and Jackson (as cited in Esteves & Caetano, 2010) state that the focal point of success of companies today is centered on the effective use of human resources.