The Human Resource is one of the main departments in a business that was established to serve the rights of the employees and the policy of the organization. It is then divided into sub disciplines which consist of Compensation and Benefits as one of the essence in the structure of managing an entire workforce. As being mentioned in www.boundless.com, Compensation deals with the salary and wages of the employees. There are several definitions about Compensation, but generally, Compensation is the overall form of monetary or non-monetary pay that is given to the employees as a reward for their required services and relationship to the employer. (Susan M. Heathfield, n.d.) The importance of Compensation is relatively apparent to an organization as it affects the wellbeing and performance of an employee. Thus, it gives impacts to the operation of a fit organization. Therefore, compensation should be abided by the objectives of itself that focuses on the four main units which are efficiency, fairness, compliance and ethics. According to Rose Johnson of Demand Media, the objectives of instituting a compensation deal can be distributed into three specific parts – motivation, retention, and compensation law. To deliberate on how compensation influences employees’ behavior, it is only relevant to emphasize on the motivation of the employees. The idea of compensation stimulates the drive of an employee to strive their best to meet up to the expectations of the organization goals. The
HR is the one responsible of the development of the organization compensation system and of the development of the pay structures, programs and policies.an effective compensation system will be focused on compelling with the law, cost-effectiveness, provide equity in all aspects and enhancement of the organization (Flynn, 2015).
Compensation is one of the most important tools that companies need to established, compensation impact employees’ motivation and job satisfaction. Employees feel motivated to help their companies succeed if there is a suitable compensation for them. The case on the role of labor costs in retail electronics in chapter 1 presents the importance of compensation and the strategy that Circuit city and Best Buy used to keep their business profitable. This paper will analyze compensation strategies and how compensations challenges were addressed by Circuit City and Best Buy.
Compensation Management is an integral part of the management of he organization. Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. It may achieve several purposes assisting in recruitment, job performance, and job satisfaction. It is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees. It is a tool used by management for a variety of purposes to further the existence and growth of the company. It may be attuned according to economic scenario, the business needs, goals, and available resources.
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.
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
The article pertains mainly to employee compensations and the incentives which govern that compensation. The company due primarily to the prevailing market sentiments has incurred a steep decline in earnings and profit margins. Management therefore, wants to realign incentives to encourage both revenue and profit margin growth within the company. The companies inability to grow organically while maintain a competent work force have put downward pressure on the margin. As such, the company wants to provide incentives by which employees can grow revenue, earn money for themselves, while also helping the company grow organically.
Compensation is defined as all forms of financial and non-financial rewards, benefits and tangible services that employee receives in return for the work from an organization (Milkovich, Newman & Gerhart, 2010). In recent years, most of the companies in Malaysia are followed the trend of pay increase with productivity gains. This scenario increases the economic development in Malaysia. With the rapid growing of economic in Malaysia, the cost of living is getting higher. People are expected to obtain a job with high pay and good compensation package. From current society perspective, pay is a measure of justice and fairness. Every employee should be treated fairly because they will compare oneself with another individual. Thus, it is important for us to justify the cash and incentive compensation policy of company D from society perspective.
Nowadays, compensation plays important roles in the organisation. Compensation defined as remuneration that given to employees based on their contribution towards their organisation. Proper compensation helps to balance employee-work relation. Besides that, compensation is also improves strategic goals of human resource management. And, attractive compensation motivates employees in term of encouraging them to perform well. With that, employees’ performance increase productivity of the organisation. In other words, it creates job satisfaction; reduce high turnover and lower absenteeism. On the other hands, career advancement is always there. Again, compensation that offered by organisation attracts job candidates. There are three types of compensation
There are many people that would choose their life career around the benefits and compensation they may receive. Compensation is known as human resources function that deals with every type of rewards that one may receive in return for performing organizational tasks.()1
Compensation is commonly defined as a systematic approach to offering value to employees in exchange for their time, effort and work completed. An organization may provide several different types of compensation that impacts the overall satisfaction of the employees and the growth and success of the company. Essentially, amalgamating the compensation plan to the organizational goals, objectives and company philosophy will support recruitment and retention initiatives. A company’s compensation plan should be logical, strategic and deliberate as it delivers an abundance of vital information about the organization to a prospective candidate or employee. The material reflected in the
With reference to Figure 1 (Lawler 1987), the framework shows that elements in the compensation system, i.e. performance measurement and evaluation, monetary compensation and career concerns links employee performance to their rewards in the form of monetary compensation and promotions. Hence, the framework suggests that rewards
Compensation is providing employees with appropriate and equitable rewards for their contributions to meeting organizational goals and objectives. Compensation is also a systematic approach to offering monetary value to employees in exchange for work performed. Compensation may achieve some purposes assisting in recruitment, job performance, and job satisfaction. (Compensation: Outline and Definitions, n.d.). There are three types of compensation which include direct financial compensation, indirect financial compensation and nonfinancial compensation.
Compensation is everything the employee values and want and what the employer is able to offer in return for the contributions of the employee (Cascio 2006).
Human Resource Management (HRM) has never been as significant as it is today. Companies want to attract, retain and motivate brains to meet objectives. Today Humans are regarded as one of every company’s assets so they need to be efficiently and effectively managed. One of the tools companies use to attract, retain and motivate its people is Compensation Management. In this hub, I shall define compensation and benefits along with their advantages for a company and its workers. My dream job will be Compensation Manager in HR department. Compensation managers plan, direct, and coordinate how and how much an organization pays its employees. Benefits managers do the same for retirement plans, health
Employee compensation is all forms of pay and rewards which are received by employees for completing their job duties as outlined by their employer. Compensation is classified two ways, direct and indirect compensation. Direct compensation covers wages and salaries, bonuses, commissions and incentives. With indirect compensation, benefits are supplied by employers, and nonfinancial compensation includes recognition, rewarding jobs, and flexible work hours in order to accommodate each person’s own needs. The psychological reward which employees received from their employer is a very important aspect. Employees aspire to have compensation systems that they believe to be fair and while being compensated for their skills. Due to the