COMPENSATION MANAGEMENT

Compensation Management

Compensation Management

Thesis statement

The role of Human Resource Department is to maintain the Compensation plan, and provide the benefits for the welfare of employees.

Introduction

The idea of a formal human resource management department is often associated with large organizations that have many employees and with formalized processes for benefits and pay. The reality for Management is much different simply because of the nature of the sector itself. Management tends to be much smaller and less formal than organizations with formal human resource departments, but they nevertheless need to perform the functions embodied by formal human resource departments. Human resources practices apply to almost all organizations, including those that rely mainly on volunteers to accomplish their missions. While some of our discussion will revolve around those organizations with paid employees, concepts such as motivation, leadership, and diversity will apply to all organizations, regardless of size or formality (Tierney, 2006).

Compensation and benefits plans

Outline new compensation plans specifically for American Widget

Consideration of the company's compensation system, it is done in terms of cost / benefit that is, when setting a fee or providing an incentive, expected result of their investment. Incentive means a stimulus located outside the body that is associated with one or more intra-organic factors to produce a given activity. Extra-organic stimulus is also used to manage or maintain a motivated behavior. There are objectives and criteria for a benefit program. The objectives relate to the expectations of short and long term organization with regard to program outcomes. The criteria are factors that weigh in relative weighting of the program.

The objective for the compensation and benefit plan is the reduction of turnover and absenteeism, raising the moral and strengthening security. New compensation plan comprises higher basic wages, gain sharing or bonus, employee old age benefit and other allowances such as medical reimbursement. The indirect or non-monetary compensation plan would include Flexible working hours schedule; paid leaves, vacations, and sick leaves; meals and free; transport facility; cell phone, car and other perks and insurance (Thomas, 1996).

Explaining why your pay system will work

Payment for labor, being due to the nature of social production, determines the legal mechanism for distributing the product of labor between the employee and the employer. This distribution is characterized by the following points. First, part of the product is distributed in accordance with the magnitude of work cast by an employee in the manufacturing process. This provides an incentive of workers in the most complete, intense and productive use of their time. Second, labour is paid higher qualifications higher than for the same cost unskilled labor time, that interest the workers in professional development, educational level and professional skill. Third, work in difficult and hazardous conditions, the material is encouraged in higher amounts than in normal difficulty (normal) conditions. It provides financial compensation for additional labor costs (Solomon, 2007).

The first is a cash payment, which is intended to reimburse costs incurred in the performance of their employees and other labor-related employment, ...