Compensation Packages

Abstract

Compensation package have a significant impact on the overall performance of the company. They are like the main attracting force for employing and retaining quality staff in the organization. So this report will give its reader a good idea about the Compensation package as to what it really is it and how are the compensation factors used to tackle different management issues. This report also discusses the compensation package as to what it is comprised of like base pay, performance pay and other indirect pays. Also, in this report job evaluation methods are discussed which is the main factor in deciding the compensation for the employees.

Table of Contents

Abstract2

Introduction5

Discussion6

Uses of Compensation6

Retaining and Recruitment of Qualified Employees6

Increasing loyalty and reducing turnover7

Increment of Employee satisfaction and morale7

Tackle Labor Union pressures8

Rewarding exceptional performers8

Forms of Pay8

Base Pay9

Performance Pay10

Indirect Pay10

Advantages and Disadvantages of Compensation Mix12

Job Evaluation13

Methods of Job Evaluation13

Rank Based14

Classification method14

Factor Comparison14

Point Method15

Use of Job Evaluation for Setting Compensation15

Conclusion15

Compensation Package

Introduction

Businesses are formed for the main purpose of generating profits for the shareholders. Thus to maximize their profits, they need a quality human resource which will allocate and use the scared resources of the company in the best possible manner. So, Human resource department of the company comes into play and makes efforts to attract the best person available for the task. The human resource department of the company establishes good culture as well as introduces high compensation schemes, which fulfills the expectation of their current and future employees.

Compensation package plays an important role in attracting quality Human resource into the organization. A slight difference in the package can influence the resource, to accept either your company offer or that of the competitor (Balsam, 2002). So monetary benefits together with other non-monetary benefits plays an important role in retaining and bringing new quality resource in the organization. Thus, a Wow factor needs to be engrained in the compensation package, which will entice quality Human resource into the Organization, as well as promote companies value.

However, when a compensation package is designed by the company, its future cash flows and growth should be properly assessed under the consultation of a professional consultant firm. These consultant firms are experts in designing salary packages, since they are able to see the bigger picture of the company from its budget to its future strategic goals. These consultants have experience of designing the packages for different firms in the past, thus their experience matters a lot (Balsam, 2002). Thus selecting the right consultant firm will result in best alignment of compensation package to the expected future growth of the company. Joe Griffith adequately quoted Jack Welch “If you pick the right people and give them the opportunity to spread their wings and put compensation and rewards as a carrier behind it - you almost don't have to manage them”

Thesis Statement

Compensation package are a great tool for controlling people, the methods that are used to compensate people are the best way of compensating the workforce.

Discussion

Uses of Compensation

Compensation is a tool used by ...