A large part of the reason that Google ranks so highly among lists of popular employers is due to their competitive compensation strategy. That is will be looking at pay mix and pay level. ...Compensation system of an industrial enterprise in Bangladesh:a case study on square pharmaceuticals b.The pay objectives differ with each organization. Compensation will be perceived by employees as fair if based on systematic components. Employees want to get as high as possible. putting increased emphasis on the policies and practices of HRM to gain Hard working and driven, they maintain close control over the operations and set an example of dedication for the rest of the Company. Explain the basic compensation objectives of pay systems. Generally speaking, pay systems differ most in their impact on instrumentality the perceived link between behavior and pay. 2-Define and explain the different policy decisions of the pay model? Objectives of Compensation Management – Attracting and Retaining Personnel, Motivating Personnel, Optimizing Cost of Compensation and Consistency in Compensation. The Company employs a total of 80 people. Pay systems translate the strategy into practice in order to achieve certain objectives. Student's Signature: Jennifer Rebarchick 7. Employers want to pay as little as possible to keep their costs low. Compensation is the key word in the understanding of remuneration systems, and it may come in several formats. Summary – The Different Forms of Compensation. ADVERTISEMENTS: The main objective of wage and salary administration is to establish and maintain an equitable wage and salary system. As a small business owner, you need to understand the basic forms of compensation and the types used to pay employees. There are 4 Divisional Mangers based in the main operational areas. 1. It helps in finding out required level of education, skills, knowledge, training, etc for the job position. And fourth we’ll explain the basic concepts of compensation policies and strategic mandates. Compensation System: Compensation is a tool used by management for safeguarding the existence of the company. Accounting, supply, and transportation services are outsourced. organizations. Since the industrial age, the four Ms of business management i.e. Students looking for free, top-notch essay and term paper samples on various topics. Various compensation systems have developed to determine the value of positions. Throughout the whole case study several HRM practices Misericordia University There was no individual identity The strategic criteria associated with strengthening performance places a focus on individual equity. Compensation-Bemis 1 Equity Theory related to the supply chain department of Square Pharmaceuticals Ltd. are Instructor's grade on assignment: ____________ Wage represents hourly rate of pay, while salary refers to fixed monthly rate of pay. Various compensation systems have developed to determine the value of positions. Before setting compensation policies, management should address some basic policy questions:• How will jobs be valued (by content, skills required, etc. For many organizations, lack of information breeds mistrust among employees. Part of her job is to periodically review and recommend advisable changes to the company's compensation system. If company’s compensa­tion plan is not offering them competitive salary, no employees get attracted to join such an organization an… Efficiency - Focuses on (1) improving performance, increasing quality, delighting customers and … September 19, 2011 The basic objective of compensation management can be briefly termed as meeting the needs of both employees and the organisation. To ensure this process works, it must be reflected in the strategic business objectives. {{objectives|Athe end of the topic learners should be able to; Define Compensation and Reward System and related terms Describe Fair and Non-discriminatory Compensation Discuss Unfair Compensation Explain the relationship between income, remuneration and pay Discuss financial and no-financial returns as forms of pay]] Additional materials, such as the best quotations, synonyms and word definitions to make your writing easier are It may be in the form of basic salary, deferred compensation, benefits, commission or incentives. Compensation-Bemis Corporation By designing your compensation strategy in a way that balances company goals and industry shifts, you will have a defensible basis which can be used to explain why compensation decisions are made. Retain current employees. Google recently ranked 46th on the 2014 Fortune 500 companies and 1st on Fortune 500's best places to work for. 4. Base pay increases are used to maintain competitive pay levels for those performing at an acceptable level, as well as recognize outstanding performance. The basic compensation objectives of pay systems include compliance, fairness and efficiency. These HRM practices include human resource planning, recruitment Sign up. Know the laws relating to compensation. Compensation Plan. Money is thought of as a powerful motivator, however that only holds for sometime until the next pay increase is due. Since both these needs emerge from different sources, often, there is a conflict between the two. We use cookies to give you the best experience possible. It is not uncommon for organizations to establish specific objectives for compensation program me. Fall 2014 competitive advantage (Islam, 2006). Some workers receive an annual bonus for the holidays, or simply to celebrate a year of good service. The objectives must clearly be defined, must be communicated as soon as decision has been reached. As a reflection of leadership’s strategy about how it values its employees, a well-established compensation system allows employers to optimize on employee engagement, productivity, financial resources, and organizational goals. Consider these components, and how to apply them into your business today. Update the compensation policy manual; Design communications meetings . 2. Control costs. The objective of fairness is understood differently according to some organizations. also offered here. The basic objective of compensation management can be briefly termed as meeting the needs of … When the laws and regulations change, there should be a similar change in the same content and in the right and proper direction. Wages may be based on the num­ber of units produced or sold, or the time spent on the job, while salary is always time-based. Google was founded in 1998 by Larry Page and Sergey Brin who met at Stanford University and is based out of Mountain View, California. The owners are involved in the day-to-day operations providing general guidance and direction to all other employees. development, compensation plan, etc. I also certify that this paper was prepared by me specifically for this course. 8. 2.Administer a system of cost control for human resources’ expenditures to ensure the prudent expenditure of state funds and company’s payments. They realized that HRM is not just to hire people. The basic objectives include efficiency, fairness, ethics, and compliance with laws and regulations. The strategic goals of the Company are to grow into new geographical areas and increase the presence in the existing operational areas, while maintaining the leading position in the market. Retrieved from http://studymoose.com/4-objectives-of-a-compensation-system-essay, Copying content is not allowed on this website, Ask a professional writer to help you with your text, Give us your email and we'll send you the essay you need, Please indicate where to send you the sample. Introduction Facilitate understanding. Don't be confused, we're about to change the rest of it. The basic objectives include efficiency, fairness, and compliance with laws and regulations. A case study which reflects a compensation plan proposal for Holland Enterprises is included. The techniques of compensation. Importance of Job Analysis Basic Compensation: It refers to the basic pay in the form of wages, salaries, and allowances paid to the employees. Compensation is an important motivator when looking to achieve desired organizational results. The key is having... ...Benefits and Compensation System of Google Inc. Satisfaction of the employees:Salaries equal competitorsa.This is to equalize the salaries of the employees with the other competitors. competitive advantage. The equity theory is concerned with the relational satisfaction employees get from pay and inputs they provide to the organization. The combined, collaborative interdependency between these elements must be designed in such a way that will support the firm’s business strategy and stand the test of time. HR managers focus on their strategic objectives to develop a comprehensive compensation plan, in terms of considering base pay, short and long-term incentives, benefits and growth opportunities. Google is known not only for their innovative technology breakthroughs but also their innovative compensation policies. i. Q 52 . In designing a compensation system, an organization must value the equity concept clearly define the wage and salary differentiations and career growth plans, is as to motivate and encourage the human resource to perform better. As this is a private company, the owners take on most of the responsibility for the way the company is run. Essay . Related questions. Improved performance, Increasing quality, Delighting customers 2. The Company operates throughout the world, treating in excess of 40 million MT of oil and oil products per year. - 90 - Individual Equity Compensation will be perceived by employees as fair if based on systematic components. Indirect financial compensation (also called “benefits”) consists of all the rewards that are not included in direct compensation, such as vacation time and insurance coverage. If an organization intends to see a ROI for their most valuable asset, they will need to design a compensation system that rewards employees for their constructive... StudyMode - Premium and Free Essays, Term Papers & Book Notes, Analysis of Target Markets using Primary and Secondary Research reviewing Vail Resorts, Analysis of A Dream Deferred by Langston Hughes. Human Resource Management 2.Fairness:It is a fundamental objective of the pay system. ************************************************************************ Human resource management practices are now considered as one of the key Explore answers and all related questions . It also depicts the job worth i.e. (2016, Jul 30). Your Answer is very helpful for Us Thank you a lot! Based on this, it has the following objectives: (a) To attract and retain competent employees – An organization pays employees a competitive salary to retain then and also attract salary to retain them and also attract skilful employees from also attract skilful employees from outside. CONTENT Identify and explain 4 objectives of a compensation system. Human Resource Management (HRM) is a relatively new concept in Ensure equity. By continuing we’ll assume you’re on board with our cookie policy. hiring, HRM has lots of functions which help an organization to gain Compensation System Plan ABSTRACT Abstract Now that we have discussed pay systems, it is important to look at some theories on pay that can be helpful to know when choosing the type of pay system your organization will use. Thus, it effectively contributes to setting up the compensation package for the job position. They have to find the balance. The components of a compensation system include Fairness is a fundamental objective of the pay systems. The three main components of the Pay Model are the objectives of the pay system, the policies that form the foundation, and the techniques that link the policies to the objectives. There are four basic objectives of compensation: focusing your employees efforts, attracting quality employees, retaining top performers, and motivating your employees. The basic objectives are efficiency, fairness, compliance with laws and regulations and satisfaction of the employees. This paper serves to identify and discuss the key components and considerations associated with the creation of an efficient compensation system. Policies and techniques are the means to reach objectives. )?•How should pay compare to similar positions in relevant markets?•What is the policy with respect to pay for performance?•Is there a commitment to pay in relation to inflation, and if so, what is that commitment?•Will all persons and jobs be treated in the same way regarding compensation policies, or will there be differentiation according to title, tenure, or some other criteria?•What will be the policy regarding employee contributions to company sponsored health and retirement benefits?•What will be the policy on communicating the compensation program? Direct financial compensation consists of the pay an employee receives in the form of wages, salary, bonuses, and commissions. Establishing market competitive pay systems is a form of job evaluation, but this time we're moving beyond job content to look at external market pay rates. b. controlling labour costs:1.The have to control the labour costs in a fair manner that affects neither the company nor the employees. Job analysis is a systematic approach to defining the job role, description, requirements, responsibilities, evaluation, etc. discussed. Don’t waste Your Time Searching For a Sample, Get Your Job Done By a Professional Skilled Writer. Exhibit 1.5: The Pay Model B. MGMT 4030 - Managing Employee Reward Systems Compensation Goals and Strategy Basic Goals of a Compensation System Attract Employees Retain Employees Motivate Employees Compliance with Pay Laws Administrative Simplicity Cost Effective Compensation: Strategic Choices (Gomez-Mejia, Balkin & Cardy, 1998) Job-based vs. 4. 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