Finally, it can help save your company money by highlighting those you may be overpaying in comparison to market rate. Jobs with similar responsibilities and workload are grouped together under a specific category. Benefits may include programs like paid time off, medical insurance, dental insurance, disability, life insurance, retirement benefits, family leave, education and training programs, bonuses, commissions, and stock options. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals. Competitive compensation packages ensure a company attracts the top talent available in the industry. While transparent data and scorecards have improved the management of other aspects of performance greatly, compensation often goes unevaluated beyond the fundamental measure of incremental costs. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.
May include average salaries, inflation indicators, cost of living indicators, salary budget averages. Compensation management programs are designed to keep salaries and benefits competitive to help both employers and employees. Completes special projects or puts forth extraordinary effort. It, being just and fair would provide satisfaction to the workers. It is in view of this that the study seeks to know how reward and compensation system in organization affect the performance of employees as well as that of the organization in general. This evaluation, if it is to be effective or of substantial value to the organization, it needs to be systematic and purposeful. Different organizations should use different measures, units of comparison and other factors, depending on what they want to measure.
Reward and compensation is concerned with employees and organization performance development through which better result can be achieved by understanding and managing reward and compensation within an agreed framework, planned goals, standard and competency requirements. In order to motivate the employees when they achieve objectives, rewards and incentives are incorporated along with basic pay. Doing this will minimize the possibility of good employees leaving your organization for a more lucrative job elsewhere. It will encourage the employees to perform better and achieve the standards fixed. Managing every aspect of the process manually might feel impossible. It is a means for promoting superior performance by communicating expectations, specifying roles within a required competence framework and establishing achievable standards.
It also involves managing company benefit programs to make sure they meet the needs of the current workforce. Compensation may be adjusted according the the business needs, goals, and available resources. The appropriate measures for this strategy might include a comparison of the level of performance differentiation and pay differentiation and percentage over or under range. Other more recent studies like done by Fugate et al. Job Enlargement: Is the act of combining previously fragment task into one job to add greater autonomy and responsibility to a job and is based on the job characteristic approach and maximizing the interest and challenges of work. Additionally, organizations should use a range of media to reach managers and employees in ways they prefer. If an organization is the most productive company in its industry, it could have higher pay position than its less-productive competitors.
Tightly controlling pay around a desired market positioning or maintaining egalitarian pay is another popular compensation strategy. Salary Banding Salary banding is part of strategic compensation system. Where is the job located? Motivation: It is the inner drives that arouse direct and maintain an individual behavior toward accomplishing organization goals. This is the better argument. Finally, the study serves and meet one of the pre-national diploma in management from Kaduna Polytechnic Kaduna. In concluding this article, it is pertinent to take a look at what Jack Welch had to say in this regard: As the quote mentioned at the beginning of this article says, if the right compensation along with the right kind of opportunities are made available to people by the firms in which they work, then work becomes a pleasure and the managers task made simpler leading to all round benefits for the employee as well as the employer. The role petroleum industry plays cannot be overemphasized, among which are structuring the capital market, refining of crude oil for local consumption, provision of employment for both indigenes and foreigners and the marketing of crude oil and petroleum product.
You want to distribute some of the profits. However, the principal still has to compensate the agent on a yearly basis regardless of management effort. The success of the company may depend upon providing a competitive compensation and benefits plan in exchange for work performed. For example, Dave's company needs people with knowledge and skills in engineering, computer software design, manufacturing, finance, law, accounting and management, just to name a few. They have the same basic job description and education level but with increased years of work experience so did job levels.
This helps in cost reduction. Employee compensation was being measured and managed for the first time. Employees are paid for performance, within a broad range of total direct compensation. But how that budget is spent may vary by person. They should not reward checking items off on a to-do list. Communication serves as a foundation for planning. Victor Vroom developed a theory, which is.
An ideal compensation system can motivate employees to enhance their job performance. Research: Is a way of arriving at a dependable solution to business and management problem through a systematic way of data collection, data analysis and data interpretation. . It should be flexible and clear. In todays life the only presence of another individual fosters communication.