Components We Need to Analyze and Discuss

¶ … components we need to analyze and discuss here. First of all, there is the compensative/remunerative component. Benefits and compensations represent a way of increasing personal revenue and partially represent the compensation for a cost of opportunity. For example, in some cases, compensations are paid for extra hours spent at work. These are a way to remunerate the time you have spent working for the company, time you could have used to produce the same amount of money otherwise.

As an individual, however, the reward component is even more important in the case of compensations and benefits. It is the most practical way by which the upper management can show an employee that the work he or she is performing within the company is important and boosts overall profits for the entire company. It is also a way to show how important the role of the respective employee is within the company and a way to stimulate him in achieving higher performances in the future.

Some forms of benefits have a certain psychological component as well. In this sense, we may enumerate benefits such as Easter or Christmas bonuses. At a time of celebration, the company can show that, at a time of personal celebration for each employee in part, it can contribute to the employee's benefit for the festive season, in a way that affects his closest relatives as well. 2) a. In my opinion, the merit pay is obviously the best way to show an employee that his performance is appreciated within the company.

The most important term to be used in evaluating the merit pay from an efficiency perspective and its main advantage is differentiation. There are several things that need to be considered here. First of all, there is the fact that the employee has achieved something he would not normally accomplish. This may be represented by a tremendous amount of work on a certain project or by an outstandingly high performance. Nevertheless, these would be facts that do not normally occur in the employee's activity.

Second of all, the differentiation principle allows the employer to distinguish a certain employee and show he has performed better than others. This may also have a simulative effect on the rest of the employees within the company, as they may strive to perform better themselves on other projects. As such, in projects involving teamwork, the merit pay may show itself to be excellently suited. Additionally, merit pays, given their motivating component, can also be satisfactorily used when team with several projects in a certain period of time. b.

Incentives are used to motivate the personnel towards achieving a certain goal (a certain deadline, for example). The main difference from merit pay is that incentives are generally awarded before the completion of the project. Incentives can be used when the employee wants a certain project to be completed before the fixed deadline and he needs to stimulate his employees with this form of benefit. c. A lump sum is used when the employee hasn't used his holiday period.

It is not necessarily a form of reward, but a form of financial compensation. It can be used when the company has several projects on the line and needs as many of the employees at work as possible. In this sense, employees can be awarded lump sums (higher than what they would otherwise receive) in exchange for their extra work. 3) FMLA affects any small business, not only the typical family owned funeral home.

The main reason for this is that the regulation allowing employees to take up to 12 weeks of unpaid leave may place the entrepreneur in a situation where he will not be able to face the growing demand. In this sense, he will have to face different choices, all of them from a weaker negotiation position (as in the case of hiring a new employee to deal with extra work). Otherwise, there is also an uncertainty that a small business needs to handle when it comes to FMLA.

One is always entitled to ask oneself if he should expand the business and advertise for more clients or whether he cannot cope with an increasing extra demand. 4).