Impact of Compensation on Employee Motivation in a Manufacturing Unit

While creating a compensation plan Human Resources (HR) must consider some factors. Legal issues will involve laws like: 1938 Fair Labor Standards Act, this determines which employees are exempt or non-exempt based on the salary basis and duties act, 1963 Equal Pay, this states equal pay and

There are five major components of job satisfaction, one being monetary benefits (Ghillyer 2010). According to Ghillyer (2012) an employee’s behavior towards their pay may affect their work performance. The issue that arises with employee motivation is that management is unable to satisfy all (Ghillyer 2010). This becomes an even larger problem when employees being joining unions, resigning and being frequently absent (Ghillyer 2010).

According to the interview results in the case study, the company was conducting regular surveys to evaluate employee satisfaction with salaries. It is evident that employees are motivated through bonuses and a standard pay. Good incentives address employees’ needs in a satisfactory manner. The firm therefore spends a good amount of money putting into employees’ welfare in order to boost their performance and reward their efforts.

To obtain the desired education degree for the human resource career field, human resource management students must learn and complete various subjects during the education program as they would need to employ various skills in their practical life. Candidates studying the Human Resource Management discipline gain an insight into courses like Employee Compensation Management, Perspectives of Management Labor welfare, and Organizational Behavior (R. Palaciso, personal interview, 18 July 2010). The Employee Compensation Management course provides an analysis of the techniques and principles used to develop and instigate direct and indirect compensation programs and reward systems that are cost-effective. This course teaches students, as human resource, to attain and draw a highly

Compensation is the total reward received by an employee in exchange for services performed for an organization, it can include both direct pay (salary and wages) and indirect pay (benefits program) (Siddique, n.d). Compensation management refers to the way or ways the employer takes care of one of the most difficult problems with the employee, the employer wants to save money so that it may be further invested in the company meanwhile the employee wants a good remuneration for his or her services (Siddique, n.d). the objectives in compensation management are: promote fair contributions to the employees, recruit qualified people, retain present employees, ensure equity of compensation, reward smart work, appreciate creativity and innovation,

It most likely goes without saying that people who work for a living do so in order to get paid. Everyone has bills and living expenses that need to be paid; therefore, individuals exchange our time for a paycheck so these expenses can be addressed. However, since most people spend more time at work than they do with their families, there should to be a larger reason than pay that drives each of us to get up every morning to go to a job. It is the responsibility of the organization to provide its employees with that reason, and it comes in the form of a compensation philosophy. It is the intention of this paper to explain the need and rationale for an organization to have a compensation philosophy, propose a compensation

According to the Princeton Review, “Human resources managers handle personnel decisions, including hiring, position assignment, training, benefits, and compensation. Their decisions are subject to some oversight, but company executives recognize their experience and skill in assessing personnel and rely heavily on their recommendations.” .Human Resource Managers deal with adversity on a daily basis and it is their job to be strict and fair. In this essay the issues of Incentive Rewards, safety in the workplace, employee benefits, and implementing compensation. Also included in

The purpose of this report is to review 3 different analyzed employee compensation strategies that could potentially benefit your corporation if accurately executed. As a business you must remember that Employee Compensation is key to identifying as well as rewarding your employees, for their exceptional performance and contributions to the company’s success rate

This assignment requires that students research compensation strategies and consider general compensation programs for employees. It is essential for the human resources departments to recruit and retain the most competent workers for positions, but it also important to consider the

The motivational strategies developed by most companies refer to financial motivation, but also to other types of compensation and benefits that can stimulate employees' work improvements (McNamara, 2010). Such compensation and benefits usually refer to bonuses, paid vacations, public acknowledgement of results, paid subscriptions to health and fitness clubs, training programs intended to improve employees' skills, and others. There are numerous types of compensation and benefits that can be addressed, but the motivational strategy must develop

As Thorpe and Homan (2000), the role of incentive pay in employee motivation nearly sets up on psychological theories. Locke and Latham (2004) define motivation as internal factors that impel action and to external factors that can act as inducements to

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.

An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.

To illustrate further, an employee will be motivated to carry out his job if given sufficient guidance through training & development, appraised through effective performance standard and compensated equally according performance standard. Through the understanding of various well-known motivational theories such as Maslow’s Need Hierarchy and McClelland’s Need Theory, we can point out the critical factors that have implication toward retention practices focus on physical and emotional needs, working environment, supervision, responsibilities, supervision, fairness & equity, employee development and feedback on performance (Ramlall, 2004). An effective human resource management practises can be the main factor for the success of a firm Stavrou-Costea (2005). As supported by Lee and Lee (2007) HRM practices on business performance, namely training and development, teamwork, compensation/incentive, HR planning, performance appraisal, and employee security help improve firms’ business performance including employee’s productivity, product quality and firm’s flexibility. In this study, we aim to study how employees regard importance of equity of compensation, job design through training and expectancy toward effective performance management on their retention.

Being rewarded and recognised for their work or contribution is what keeps an employee motivated to work towards achieving the organisational as well as personal goals. When the employees is motivated by rewards, they will have job satisfaction consequently increasing the productivity of the organisation. It necessitates the need of managers to pay more attention in understanding their employees and come up with suitable types of reward systems for the organisation so that the employees are intrinsically and extrinsically motivated all the time. The hypotheses that I put forward here is to support this statement that effective reward management is critical to