Compensation Administration - Essay Example

?What should Paul do to determine how Plastec compares with other area employers in terms of wages and benefits? Compensation administration is a section of  human resources focusing on planning, organizing, and controlling the payments that staff gets for the work they carry out. Compensation includes direct forms such as merit, incentive and base pay and indirect forms such as holiday pay, health insurance and deferred imbursement. The final objectives of compensation supervision are: proficient maintenance of a productive labor force, just pay, and agreement with state, federal and local regulations based on what companies can meet the expense of. It is a major concern and drawback for Plastec that their turnover has increased. This could further affect their production and the development of the company. Plastec needs to critically analyze their employees working conditions and point out where they lack. One of the reasons for the workers resignation is better packages that are being offered by other companies. Having a sound knowledge of the environment is very crucial for the company. Plastec offers less money and health insurance than other companies do. The job is also stagnant as some workers pointed, “there was no place to go”.  How could Plastec use variable pay to motivate its machine operators to stay? To increase their productivity?   Variable pay, also famous as "pay for performance", is given for particular performance results rather than for routine time worked. While incentives are not the answer to all personnel challenges, they can contribute much to motivate the employee. Plastec could use it effectively to enhance the performance of its workers. It is natural instinct of humans to strive for reward, thus variable pays would be a good source of motivation. They could give a month’s free health services, extra pay for over time, or form and evaluate different work groups and rewards on who performs the best. Such positive competition would make them work harder and increase their productivity (Variable Pay: How to manage it effectively, 2011). The majority of the machine operators are in their mid to late forties, some with families, and some without. What types of benefits would you suggest offering?  To make an employee work effectively and efficiently, a company needs to offer him some benefits. One way of keeping a worker content is by offering him bonuses with competitive salaries. Though salary is one of the important incentives that keeps employee satisfied with his job, but it can be the least effective. People eventually get used to their paychecks and increased salary fails to keep the morale of the workers high. Giving out a bonus when employee’s performance is outstanding encourages him to work better (Marr, n.d.). As, majority of the machine operators are in their late or mid forties, there is a very thin chance of them switching jobs. They must be offered retirement benefits. Middle-aged workers usually place a high value on good retirement plans. Employees must be given reasonable healthcare, vacation days and sick and annual leave. When going out of station for meetings or conferences, the married employees must be allowed to take their spouses with them if feasible. Which employment laws or regulations should Paul pay the most attention to and why? When Paul joined the business firm, the owners gave him two instructions, “use HR to keep us staffed up so we can grow” and “keep us out of court”. Hence, it is very essential for Paul to see that the organization is carefully following all the rules and regulations and is free from employee discrimination and harassment. Ensuring the prevention of discrimination and harassment is not just the right thing to do, it is a good business decision. Organizations can avoid costly lawsuits, fines, and settlements by fostering a workplace that is free from harassment and discrimination. The first step is to hire the right people for a specific job to be performed. The workforce hired should be diverse and stereotyping and discrimination should be highly avoided during the process. Stereotyping and discrimination is greatly observed in Plastec as we see that the majority of the workers are only Caucasians and African-Americans. Workers from other societies are either not hired because of culture and language differences or because they are considered to be the ones who avoid responsibility. For example, the employees from Vietnam were considered weird because they used to talk Vietnamese to each other. To prevent the firm from facing any problem due to violation of employment laws and regulation, Paul advised the managers and employees to enroll in diversity and respect training series. Paul realizes that if a company wants to grow or even maintain its current level of activity, it will be important to be open to hiring diverse workers, and, once hired, it will be important to provide a workplace environment that will make them want to stay. Paul found out that the people who left because they got a better job or went to a company that had better promotion opportunities were all women or minorities. It is important that Paul enroll managers and employees into diversity and respect training series so that the firm is able to hire a diverse workforce and take advantage from them. Secondly, it is important that an environment is kept at the workplace that is free from harassment and discrimination and allows all workers, men and women, to work in comfort and ease. Lastly, proper job descriptions should be developed so that it acts as a means of communication between the jobholder, the manager, and HR about expectations of the specified job.  Keeping in mind that it takes time/energy to implement systems to retrieve data, which HR metrics should start Paul capturing? It is very important to show HR’s brunt on the organization because of the expenditure and significance to productivity. The HR department should be run like a production in itself. HR metrics are categorized in three key types: past, current, and future expectations, for evaluation and forecasting. If there is no past in sequence accessible, the organization should use preeminent practice information or that of a parallel company. The categories must be unswervingly related to the business objective, which varies from company to company. Since, Recruitment is one of HR’s main responsibilities and the company at present is facing employee turnover, I think Paul should go for Recruitment metric. Recruiting competence describes how many new positions were created versus absolute turnover and the process for recruitment personnel. One way to review the effectiveness of recruiting is to take the average performance assessment gain for a certain position, of recently hired employees, and match up to it to the previous years’. Another is administration satisfaction with these new employees, dogged through surveys. The rate of turnover of new employees can also serve as a good metric to measure. Turnover relates to both intentional (quitting) and spontaneous (firing, layoff) employee loss. Paul knows he should be updating job descriptions but he “just hasn’t had the time”. Why should he make this a priority (or should he)?  Job description is a very important tool that enables communication between the jobholder, the manager and HR about the expectations and requirements of the job to be performed. At Plastec, the job descriptions are not updated and are not clearly defined resulting in workers never being sure about what exactly their job responsibilities are and hence, they feel that sometimes they are asked to do things that they aren’t supposed to be doing. This causes the workers to be de-motivated and unsatisfied with their job who in turn, eventually leave the organization in search of better job opportunities. A well-defined job description will provide the employees with direction and a clear objective; allow managers to access the performance of the employees and it will act as a means of communication about the responsibilities of the job under consideration. There have been some recent technological changes at Plastec, which have changed the way of working at the firm, but this does not show up in any job description they have. This has caused them to pay the price in terms of low production and higher turnover. The firm is recently facing the major problems of employee turnover and lower rates of production. The potential solutions to these problems are encouragement of a diverse workforce, better workplace environment and clearly defined and updated job descriptions. Paul realizes that updated job descriptions will allow workforce retention, motivation and lead to higher levels of production. Identify 1-3 things the company could do to improve employee retention and reduce turnover. Retaining an encouraging and aggravated staff is essential to an organization's success. High employee turnover increases everyday expenditure and also has an off-putting effect on company self-esteem. Putting into practice an employee retention program is an efficient way of making certain key workers to remain in employment while maintaining job performance and productivity. The company therefore needs to take care of these issues. I think companies that make available a pragmatic view of their corporate environment, advancement opportunities and job expectations to new hires can positively influence employee retention. Secondly, endow with career development. For many people, learning innovative skills and press forward their career is just as important as the cash they make. The study carried out by Linkage Inc. verified that more than 40 % of the respondents were of the view that they would consider leaving their present employer for another job with the same benefits if the job is providing better career and learning opportunities (Banks, 2007). Thirdly, the company needs to take care of the problems of women as it is observed that they left the job because they were the victims of sexual harassment. Therefore, it is important that the company look for triggers. Focus on individuals such as women, going through some form of change such as pregnancy, divorce, a child's graduation, marriage, mergers, or other significant events that could sway job satisfaction and/or influence or vigor employees to run off the organization ahead of time. Professionalism is an introductory factor for first-rate managers. Playing one employee of the other or scattering gossip or taking care of one employee superior than another will endanger good working relationships and will beyond doubt shrink job satisfaction and performance. Bibliography Banks, L, 2007, ‘How to encourage employees to stay,’ Reduce Employee Turnover, retrieved on April 27, 2011, from http://www.suite101.com/content/reduce-employee-turnover-a20445 Marr, S, ‘Motivating Employees’, FCCI, retrieved on April, 27, 2011, from http://www.fcci.org/index.php?option=com_content&view=article&id=77:motivating-employees&catid=10:building-your-staff&Itemid=69 ‘Variable Pay: How to manage it effectively,’ 2011, HR Disciplines, retrieved on April 27, 2011 from http://www.shrmindia.org/variable-pay-how-manage-it-effectively Read More