COMPENSATION
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Employers have to find a way of attracting and retaining the best employees. This forces them to offer competitive rates in terms of compensation and benefits. Many organizations have realized the importance of offering financial and non-financial incentives and they have made compensation part of the strategic human resource management. Attractive pay structures and systems offer organizations a competitive advantage. They enable employers to attract the most competent, experienced, and qualified workers. Employers realize the importance of offering good compensation as a way of motivating employees. This increases productivity and it enables the company to realize its goals and objectives more quickly. Employers and employees may have different expectations concerning fair compensation. Therefore, it is important for both parties to agree before beginning work. This will avoid any instances of later conflicts and disagreements.
Employee benefits have become the norm rather than the exception in most companies today. Companies are striving to ensure that they offer something more than attractive pay packages for their employees. They are doing this in an effort to retain their workers, as they consider the selection and recruitment of new employees to be more expensive. Many organizations also offer benefits as a way of improving their image. Benefits increase employee satisfaction. Employers have to ensure that the benefits they provide meet the legal requirements (Fried and Fottler 2008, 325). Some of the benefits such as social security and unemployment compensation are mandatory under the law. In addition, organizations have to ensure that their packages are attractive enough. This involves providing more benefits than required under the law. Some of the benefits offered include health and life insurance, retirement plans, and vacations, and disability (Pynes 2009, 220).
Employees expect their organizations to do more for them in addition to offering a fair pay package. Different factors have led to an increase in costs of employee benefits. Unions have become active in demanding for more benefits. Therefore, organizations with unionized workers can accrue more costs. The workers and the government have become more demanding when asking for benefits. Some employees expect their organizations to provide more benefits as a way of compensating for low pay packages. The perception that the workers have towards their organizations will determine their sentiments towards the payment they should receive. Employees ideas regarding their contribution to the company and the rewards received will affect their performance as well as their level of motivation (Fried and Fottler 2008, 332). The government also mandates organizations to offer their workers more benefits. The recent changes in the healthcare system have forced some companies to review their benefits in an effort to comply with the law.
Many organizations and their workers regard financial compensation highly. Employees gauge a company’s pay package before determining whether they will work there. Organizations strive to ensure that they offer fair and attractive pay packages. However, financial incentives are not enough for workers. Many employees recognize the importance of intrinsic and intangible rewards such as recognition and praise. They expect to feel a sense of belonging in their place of employment. Such issues enhance the workers performance. It adds to their morale and motivation. The workers feel encouraged to do more work and to contribute to the goals of the organization (Pynes 2009, 231).
Employers need to have a clear understanding and knowledge of how they can compensate their employees. This will involve implementing different job evaluation methods, which are fair, competitive and legally compliant. Some organizations spend more on compensation than others do because it is difficult for them to get experienced employees. However, all employers should strive to ensure that the benefits and pay packages they offer their staff members are just and fair.
References:
Fried, Bruce, and Myron D. Fottler. 2008. Human resources in healthcare: Managing for success. 3rd ed. Washington, D.C.: Health Administration Press.
Pynes, Joan. 2009. Human resources management for public and nonprofit organizations: A strategic approach. 3rd ed. San Francisco: Jossey-Bass