Compensation Management Organizations Can Also Effectively Develop

Compensation Management

Organizations can also effectively develop when strategic and tactical compensation issues are adequately addressed by the management. An organization's management has to recognize and integrate long-term strategic objectives with short-term tactical requirements (Henderson, 2006). Organizations should develop and operate compensation system that promotes fair treatment by relating job worth to differences in job requirements, recognize the worth and value of employee knowledge and skills.

Some of the principal activities that are required in the development of an organization are establishing a philosophy, identifying the mission, developing a policy, formulating organizational strategy, determining objectives and sub-objectives or goals, defining work unit activities, and grouping tasks into jobs (Henderson, 2006).

Organizations do have written philosophy statements. However, what leaders say and actions they engage in speak volumes about the philosophy of an organization. Members of organizations take what there leaders express in written or verbal forms as the philosophy of such organizations (Henderson, 2006). Written and unwritten philosophy statements describe the values of top management. Congruence between values of members of an organization and philosophy of the organization is critical for an organization's success. The greatest impediment to success is failure by members of an organization to realize a positive relationship between their values and philosophy statements.

To move from ideas and values to concerted actions, an organization has to identify and describe its mission. Mission statement is broad in perspective and lines out what an organization intends to accomplish in the long-term (Henderson, 2006). It outlines reasons for the existence of the organization. Organizations subordinate goals which provide long-term guides to actions are defined in the mission statement.

Policies are developed to ensure proper and acceptable operations. Policy statements help organizations in directing actions. Framers of policy statements recognize the influence of human behavior and social demands of accomplishment of the desired output. For a given policy to direct human behavior it has support the mission of an organization (Henderson, 2006).

For an organization to run effectively, there are principal activities that the management must engage in. First and fore most, issues pertaining to employee compensation have to be addressed amicably. Other than that, an organization's compensation strategy has to comply with government regulations and go along way in advancing the well being of the larger society. Issues pertaining to wage and our legislation, employee pension and welfare legislation, and tax treatment legislation do impact how an organization is run (Henderson, 2006). Workers will at all time demand for improved working conditions. Some may even clamor for fewer hours of work each week and shorter working weeks. An organization in trying to respond to these credible issues has to take into consideration what wage and hour legislation says about these demands. The twentieth century American employers were known to provide protection for workers who suffered an earning loss owing to circumstances beyond their control (Henderson, 2006). Employees who were not able to work because of job related illnesses were also provided income by their employers during these times. The Social security Act in 1935 also guaranteed some amount of income to workers reaching retirement age and workers who became unemployed through no fault of their own. This was followed by a number of pension plans. By critically looking at employee pension and welfare legislation, an organization will be in a position to know the kind of employees who are legible for pension and know when to use their pension plan as a club to retain its employees. To effectively run an organization, its management should be aware of the changes and potential changes in benefits legislation. Some of the changes that should be taken account of are those that require employers to provide unpaid pregnancy leave and to reinstate jobs to women workers at the conclusion of their pregnancy leave. Other changes are federal laws that entitles employees to 12-week unpaid leave during any 12-month leave period of care employees unborn child. It is imperative for the management to be abreast with issues pertaining to unemployment insurance which falls under the Social Security Act of 1935, Welfare and Pension Plan Disclosure Act, the Human Maintenance Organization Act, and the Trade Act (Henderson, 2006). It is common knowledge that federal income tax program is the principal source of revenue for the federal government. It is therefore the prerogative of corporations to pay income taxes to keep federal governments running. Failing to do so can possibly put an organization at crossroads with tax collecting agencies like the Internal Revenue Services (IRS) which may jeopardize an organization's operations (Peck, 1982). Management must therefore learn to comply with the government tax obligations.