The Three Types Of Compensation: Outline, And Definitions

This report examines 3 different compensation systems that our company can develop and enforce within our company for our employees. Compensation is the most important and rewarding factor for employees, so a thorough and thoughtful approach should be taken as we think about changing the way in which this company rewards it's employees for the work they do for us each and every day.

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:

Compensation is defined as all forms of financial returns and tangible benefits that employees receive as part of an employment relationship. Thus, in order to achieve, create, and maintain an effective compensation program you must explore greater professional expertise, organizational understanding, creativity, and vision (Bernardin & Russell, 2013).

Compensation – wages from an employer to their employee, this would include both fixed and variable compensation that would correspond to work performance.

The most significant benefit is “Total compensation package, or total rewards,” because they include far more than salary. Total compensation also includes the indirect benefits that result, such as 401(k) plans, vacation time, holiday pay, and healthcare coverage. When a company offers employees an attractive compensation package, they create an enjoyable environment in which workers want to work, and often stay longer with the enterprise (Dessler, 2008), and (Lecture Notes, 2015).

Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required. (Susan M. Heathfield Human Resources Expert)

Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

In relations to Dr. Carl Jones and Dean Smith’s merit processes, the university has a policy to provide pay increases based on merit. To meet that objective, Dr. Jones has created a robust systems of metrics to evaluate his staff based on specific criteria. Dr. Jones process includes a weighted point system with 40 percent based on teaching, 40 percent based on research and 20 percent based on service. As chair of his department, Dr. Jones provided his recommendations for salary increases based on his detailed criteria to the Dean who approved them.

Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration.  Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process.  Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).

Google is conspicuous, because it is the most popular, but in the industry is one of the most intercepted employers. However, strategic human resources fully comply with business models and Google eyes - among them, the employee does not attracted to the short-term monetary rewards, but from work to support system that can help them to create anything. Therefore, in Google 's work day care and hives have elderly care center, a spa and barbershop, car and oil facilities of check, almost all a technology, obsessed with savage want to worry about in an inclusive parties at least the free form, welfare plan, but the actual take-away cash part is negligible. Google innovation in the stock options system, ensure that all staff are compensated competitive company significant fair growth thanks. Such strong culture and the staff 's work, devoted to technology solutions, not tangible compensation, Google to becoming the first one in there cut their salary and compensation requirement board, because they feel, they will have to pay more money than they need. All staff agreed to emotions, and in 2005-06, the employee 's salary cut formally asked himself. In the same period, 1.43% finish turnover.

Employee compensations refer to the sum of all the benefits and rewards granted to an employee due to their employment with an organization. The development and implementation of an appropriate compensation system will help an organization attract and retain the most talented and qualified people to help realize a company 's mission and goals. According to R. Wayne Mondy (2014) compensation is one of the largest motivators and concerns of employees. Further, comprehensive compensation packages have been adopted by nearly every business as an effective technique in overall success of an organization and employee satisfaction.

A reward is a consideration that is given to an employee by the organisation on return to the quality of services rendered by the respective employee. Owners of the organisation (in most cases, shareholders) are the ones who will approve the rewards to employees including the directors, head of departments and the lowest cadre of employees. A company may also reward non-employee stakeholders for their contribution to the organisation.

After the preliminary consideration, the basic structure of international compensation programs is similar to the structure of domestic compensation programs (Martocchio, 2015). The main component includes base pay and employee benefits. The nonperformance-based incentive and allowance differ international compensation packages from domestic compensation packages. In the following section, I will focus on the difference part between expatriate compensation and domestic compensation.

Compensation is an imperative component of the workforce as it serves in the capacity of an assurance to the employees that there are positive returns at stake in the wake of the efforts they may endeavor to put. As such, there is a primary focus that ascertains that everyone remains committed to the course of the service delivery (Huselid & Becker, 2010). There needs to be an attempt to ensure that the activities that they choose