Wk5 Lecture 1 “Compensation and Rewards”. Human Resource Strategies
Compensation and Rewards
It wasn’t too long ago when the workforce was reeling in turmoil due to the financial crisis. Many of my colleagues lost their jobs due to the financial crisis of 2007-2010. After the crisis, I was also looking for work after working for an organization that I enjoyed working at. I was getting bonuses for reaching individual as well as organizational goals.
However, my bonuses were not a fraction of the taxpayer bailouts given to Wall Street companies. Many of my colleagues were making announcements on their LinkedIn accounts through their groups. I can recall lengthy paragraphs of individuals with experience and drive in their fields. They were just in the right place at the wrong time.
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Here are some remedies for issues and elements dealing with compensation:
- Be more strategic about your compensation decisions. You can’t do this if you are unaware of the strategic objective of the organization. As HR practitioners, you can’t expect to be able to make the right compensation decisions if you do not understand the strategic objectives.
- Move away from paying for a specific position or job title to rewarding based on individual competencies contributions to the organizational objectives.
There are three compensation components that make up overall compensation:
- Indirect – The indirect measure is what is comprised or benefits, like medical and dental.
- Direct – The direct measure include wages/salary, incentives, bonuses, and commissions.
- Nonfinancial – The nonfinancial component is also important in the workplace and in many cases, reasons why employees remain in organizations.
Recognition programs are good ways for companies to feature employees who do a good job and serves as incentive for others to do the same.When work is rewarded, employees feel that they matter and make a difference.
Organizational support builds a stronger sense of belonging and connection through collaboration and teamwork.
A positive and safe work environment also keeps the mainstay for productivity and ease of mind.
Who doesn’t like a workplace with some flexibility which can be work hours and variety of tasks and projects to reduce boredom and enhance professional development?
So what is strategic compensation? It is the compensation of employees in ways that enhance motivation and growth. It also aligns their efforts with the objectives of the organization.
Strategic compensation begins with analyzing what the organizational objectives are. Once there is an understanding of the organizational objectives, then this is the time when you need to consider what is best for the company in terms of what skills and behaviors will be rewarded. Sounds interesting. This is why there must really be clear picture of what the organizational objectives are.
Compensation and Pay for Performance
- Tomas Corporation had 400 employees and wishes to develop a compensation policy to correspond to its dynamics business strategy. The company wishes to employ a high- quality workforce capable of responding to a competitive business environment. Suggest different compensation objectives to match Tomax’s business goals.
- A frequently heard complaint about merit raises is that the do little to increase employee effort. What are the causes of this belief? Suggest ways in which the motivating value of merit raises may be increased.