Compensation Packages

Compensation Packages

Introduction

Chip manufacturing businesses is formed for the main purpose of generating profits for the shareholders. To maximize the profits, we need a quality human resource, which will allocate and use the scared resources of the company in the best possible manner. Thus Human resource department of the company will come into play and make efforts to attract the best person available for the task (Macauley, 2009). The company will also try to improve the culture as well as introduces high compensation schemes, which fulfills the expectation of the current and future employees.

Compensation package plays an important role in attracting quality Human resource into the organization. A slight difference in the package will influence the engineers and other resources, to accept either the company offer or that of the competitor. Thus, we will introduce Wow factor that will entice quality Human resource into the Organization, as well as promote companies value.

Discussion

Uses of Compensation

Compensation is a tool that will be used by this manufacturing concern for variety of purposes. Keeping in view the company goals and resources, this can be changed according to the needs of the company over a period. They are used for the following purposes

Retaining and Recruitment of Qualified Employees

Since innovation is the key to success in chip making, so managers will try to retain and recruit the best employee for the job (Igalens & Roussel, 1999). Therefore, the Compensation package is designed keeping in view that the employees are paid fairly in comparison to their job description

Achieving of External and Internal Equity

The fairness of the compensation package when it is compared with the workforce of the same organization is internal equity. The Comparison of the compensation package with the competing firm like Intel and dell will be external Equity.

Increasing loyalty and reducing turnover

The more engaged and emotionally associated an employee is with the company, the more productive and valuable he is to the company. So loyalty of the employee helps to improve satisfaction and results in fewer turnovers.

Increment of Employee satisfaction and morale

Employee satisfaction is a term, which describes employees' satisfaction due to his salary package and other job related reasons. Job Satisfaction plays a vital role in employees' motivation, employees' goal achievement and positive employee morale.

Tackle Labor Union pressures

Labor union now days have turned into legal representative for the workers in many countries. They bargain on behalf of the workers on many issues like increasing wages, benefits and working conditions. Therefore, proper Compensation package plays its part in tackling the Labor union pressures.

Rewarding exceptional performers

Movement of Employees through different pay range occurs due to meeting of certain criteria that may be in the form of seniority, experience and performances. So the compensation package are designed in a way that rewards green circled employees by high pay and penalizes the red circled employees by no raise at all.

Form of Compensation to be paid to Employees

The compensation paid to the employee is one of the largest expenditure for a company, thus Human ...