Compensation Methods
1. Compensation methods define how companies provide remuneration to employees. Compensation typically includes direct salary (wages) as well as benefits programs-such as health insurance-and incentive programs, such as gain-sharing plans. Benefit programs can include pension programs, deferred compensation programs, 401(k) and similar employee-funded programs that might be matched by the employer, or programs such as on-site child care or educational reimbursement for work-related training. Benchmarking programs whereby various compensation and incentive programs are compared across companies and industries can help companies maintain equity and ev
Instead, companies must incorporate compensation with incentives, benefits and job design in order to craft an effective retention strategy that will help the organizations retain high-quality personnel ("More Companies," 2005). Incentive programs can help companies achieve their objectives, but only when the plan is carefully structured. It is more effective to reward salespeople for margin rather than revenue, for example, and productivity incentives must take quality into account, not just output. Such forward-thinking compensation programs can incorporate benefit and incentive programs and can be used to help the organization achieve its strategic objectives when incentive programs are structured appropriately (Mello, 2006). It is easily quantifiable and thus easily comparable across companies and industries. Compensation is one of the factors that employees and potential employees take into account when evaluating whether to join or remain with an organization. Creative and forward-thinking compensation programs can reinforce a culture of creativity and can be used to attract and retain high-quality individuals. Piece-rate incentives are one of the simplest plans, rewarding employees for improved productivity; profit sharing and gain-sharing programs are more sophisticated approaches. If an incentive program must be restructured in such a way that employees perceive the incentive program is lessened, the effect on morale, productivity and retention can prove devastating ("The Economics," 2004). Incentive programs can be cost-effective and improve organizational effectiveness, but must be carefully structured and administered. The tasks that employees perform, employee recognition and working conditions are as important to employee motivation as hygiene factors, but perceived inequity in compensation/benefits can have a negative effect on employee morale and motivation. Compensation strategies are important to employee retention, but studies suggest that employees rarely leave organizations solely because of compensation.
Common topics in this essay:
,
incentive programs,
retain high-quality,
compensation programs,
incentive programs help,
attract retain high-quality,
forward-thinking compensation programs,
retain high-quality individuals,
mello 2006 compensation,
programs help,
high-quality individuals,
companies industries,
2006 compensation,
carefully structured,
incentive program,
mello 2006,
|
Acceptance Essays
