Evaluating Compensation Strategies Essay

Within this demarcation report, I occupy analyzed triplet contrasting employee inventment st setgies that I whole tone could be rise executed within our remainsation. Employee requital is light upon to recognizing and recognise our employees for their movement and contri notwithstandingions to the overall beau mondes success. Because it is a signficiant factor, we get hold of to c befully evaluate the three options in my report. Compensating our employees using the base fee memory access is a well accepted outline. This approach provides for a plume salary that employees will earn establish on their job steganography. Factors such(prenominal) as merit or tenure will contract no impact on someones base salary.This is a unchange equal to(p) compensation strategy leveraged within standardized organizations and an approach most employees feel comfortable with as its genuinely cut and dry. The downside of using this approach is that there is little room for growth and salary augments and which usher out be de-motivating. Performance- base compensation is quite a popular and in addition another well accepted strategy. In this strategy, employees have direct control over how lots they are paid. Having control historically wait ons to motivate employees to wee harder and compass advanced financial goals and maximize their own income. Having an organization that is a high perform organization helps to make an organization more competitive.The downside of this approach is that you create a more competitive purlieu that may impact employee-to-employee relations. Lastly, I follow-uped a senior status- ground salary strategy. In this strategy, compensation is strictly ground on an employees length of service, seniority or tenure. There are different ship canal this move over can be administered. Employees can get an annual bountyes based on their employment anniversary date or monthly bonus come ups added to their take-home pay that would reflect their length of service. This persona of strategy encourages employees to hang on loyal employees in an organization. The immediate downside to this approach is that employees arent cause to achieve more or produce increased select sour since its more about magazine put in vs. prime(prenominal).After reviewing the three strategies outlined above, I am recommending that we move forward and implement a deed-based compensation strategy for our employees. This strategy will create a manpower of highly motivated, performers that are enkindle and engaged to succeed. Employees will be excited to ramp up their income and their excitement and achievements will help support the comp any(prenominal)s goal of increased profit. If our fellowship has highly driven employees focus on producing shade work, the smart set will benefit in the dead term and long term.Introduction The Human Resources department was asked to research viable compensation strategies for our man ufacturing organization. Ive created a report that shares my research and findings for three different compensation strategies Performance-Based honorarium, earnings Compensation and Longevity Compensation. In my report, I have compared these strategies, pointing out where they are different including the pros and cons to apiece strategy in baseball club to determine the best approach for the 120 total employees on our payroll.Compensation is a key factor that impacts employee satisfaction while also having a direct influence on how successful the overall organization can be. Ive conducted thorough research on this topic so that the focussing team can have a more robust misgiving of these three strategies and to decide on a strategy to implement.My research down the stairs will start with salary compensation which can easily be defined as a set monetary substance that an employee receives for the work that they do based on their unique(predicate) job classification/coding o nly. Ill follow that with performance-based compensation which pays and rewards employees based on their individual performance which yields for individual growth. Lastly Ill provide research on longevity pay which focuses on additional pay or wage adjustments based solely on an employees length of service.It is crucial to understand each of these strategies and how they will impact our organization if they were to be implemented. Research Findings Ive ideal extensive research on various compensation strategies within similar types of organizations and have arrived at three specific strategies that our organization should consider adopting Salary CompensationPerformance-Based Compensation Longevity-Based Compensation1.SalaryGeneral salary compensation refers to an amount of money that you pay an employee for the work they do without consideration for quantity or quality of the work performed (Entrepreneur Media, Inc., 2013). By law, employers must compensate employees for work tha t is completed. If an employee is compensated by a salary, employees are compensated differently from those that may have an hourly compensation rate. Employees that are hourly employees get paid based on a rate multiplied by the number of hours that they work. When they work over and above the amount of hours for the day/week, they receive extra, additional compensation (Grace, 2012).In contrast, a salary compensated employee gets paid the same salary, a fixed amount of money and is not force by the amount of hours an employee works. Salaried employees are not required to keep track of the hours they are working because they do not quality for nor are they paid for any over epoch. They are expected to complete their work regardless of the amount of time it takes them. Employees who are paid a salary are given the expectations that they bespeak to complete the entire job in order to earn their compensation. This compensation differs from both hourly paid employees or performance- based paid employees. Employees are able to really count on this compensation and a consistent pay strategy is important to retaining good employees (Ojimba, 2004).Analysis Employees that are compensated through with(predicate) a salaried compensation strategy have a very stable compensation to rely on. There are no real surprises or swings in the amount of money an employee receives. Compensation is not impacted by the quality of the work produced or the quantity produced. Employees would have the luck to budget themselves or at least have a worthy time predicting what type of income they can expect since it will al focussings be the same without much changing from division to year. This strategy may allow for employees to develop the impression and mindset that they dont have to do more or produce increased quality work. They could take away(predicate) that what they are doing today is enough and not strive to help the company with increase sales or various other goals.2.Perf ormance-basedA performance-based strategy is become a trend in todays organizations and leveraged as a way to incent employees to strive to increase their production or break the quality of their work. Why would an employee want to do that? Because they are financially incented to do so All companies need to remain competitive and control sexual costs and budgets. Performance-based compensation really partners with an organization to do just that. This type of strategy is really attractive because they are friendlier to corporate budgets than other methods of compensation. stick out increase are only given out at designated multiplication during the year so budgeting in advance is easier, etc. If production and quality goals arent met, money goes back into the budget for the next possible review period (Fox Lawson & Associates, n.d.).Additionally, strategy helps to provide a win-win situation for both the company and the employees when properly administered and rolled out and the structure really can help to motivate employees to work harder and that benefits them and the company both. When developing this type of strategy, reasonable goals and performance incentives would need to be developed. In todays environment it would be wise to tie pay to performance as a way to accelerate employee output. This approach is a very common way for organizations to increase productivity and influence potentially a more competitive environment with employees always striving to do more and therefore earn more. Performance-based compensation computer programmes also help retain top performers, better align hollow costs with productivity and reinforce the companys objectives (Richter, 2002).You attract a different level of employee with this approach. For employees to be successful and feel happy in this type of structure though they need to have a bank for more pay, have confidence they will receive more pay if they improve or increase their individual performance and t rust that the organization will administer the policy and compensation plan fairly crosswise the board. Studies have consistently shown the recognition for a job well through is the top motivator of employee performance (Dorf, 2011).Analysis Though research it is out-of-doors that this type of approach includes many benefits both to the employee and to the organization. Creating a more motivated workforce that is focused on a goal to provide quality production benefits everyone. If our employees can see that their performance directly impacts their personal toilet line they will become more focused, work harder and constantly turn on their peers to meet them at that level. Job security has to be considered here too a company with this type of approach is more streamlined and good creating a more competitive organization and helping to protect and refer the company and its reputation.3.Longevity-basedLongevity-based compensation is a compensation strategy that more mirrors a type of contract where the employer will pay the employee a compensation based on their length of service or seniority. In researching this approach, many companies bye many different types of strategy around this. Each organization up front provides a document or contract to the employee that outlines this system specific to their organization. These types of documents include things like the dollar amount to be paid or the percentage of increase based on years of service. Information is also included on the schedule of payment so that employees really issue what to expect. Employees see this type of strategy as a way of paid for their loyalty as an employee a way of giving them their due for glutinous with them (wiseGEEK, n.d.).Typically with this approach the adjustment made is often in the form of a percentage of the employees annual salary or rate of pay. Based on why the amount is given it becomes clear that an employer is recognizing their time and loyalty to the overall organization. The real problem with this specific approach is that you essentially are awarding someone just for being on supply or holding down their position for yet another year (Agency Management Roundtable, 2012).Analysis I think this type of compensation program may have made sense for employees that may be bollix Boomers as loyalty was crucial and something employees really set out to demonstrate, but not something that is realistic in todays environment. While rewarding employees for their time served there is no real focus on the quality of their work during that time nor is there any reward for their contributions or added value.