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Compensation Management
Different people gain different levels of satisfaction from their jobs. However, it is very difficult to measure with precision the degree of satisfaction people get from any work related activity they engage in. In order to motivate employees who work exceptionally well, employers may device some forms of monetary rewards that are given in appreciation of their hard work (Gomez-Mejia & Balken, 1992). These monetary may be paid directly to these employees or indirectly. The rewards may be given in short or long-term. The rewards systems are used to attract and retain those who have desired skills and knowledge and those who are willing to put forth the effort needed to link their knowledge and skills to accomplish goals and objectives of an organization (Gomez-Mejia & Balken, 1992). Rewards system that an organization settles on has to focus on worker attention on specific behaviors that particular organization considers necessary to attain its goals...
An organization can either adopt a compensation or non-compensation system. These rewards systems have some outstanding differences.
Compensation system has eight dimensions whose components help in understanding and appreciating the complexity of the system in a modern organization. The first dimension: pay for work and performance, includes money that is provided in the short-term that allows employers to pay for and contract for payment of desired goods and services (Henderson, 2006). Money paid to employees as rewards depends on specified job requirements like the output that exceeds the expected quantity, innovations that lead to improved quality, dependability among other factors. Pay for time not worked is another dimension that is used in compensation system when it comes to rewarding employees. It significantly increases labor costs as well as enhancing quality of work life opportunities for employees. Other dimensions taken into consideration when…
References List
Gomez-Mejia, L.R. & Balken, D.B. (1992). Compensation, Organizational Strategy and Firm
Performance. Cincinnati, Ohio: South-Western Publishing Company.
Henderson, R.I. (2006). Compensation management in a knowledge-based world (10th ed.).
Upper Saddle River, NJ: Prentice Hall.
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Compensation is a sub-discipline of Human Resources Management and has become even more critical for organizations in the 21st century. Compensation, of course, is the salary or pay an employee receives from an organization and may fall into four categories: 1) Guaranteed Pay (fixed), 2) Variable Pay (Performance or results based); 3) Benefits (Medical, etc.), and 4) Equity-Based Compensation (Stock or organizational programs). There are many forms of compensation, many
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