Fair Compensation Budgeting - Essay Example

? Fair Compensation Budgeting Fair Compensation Budgeting Introduction Fair compensation is the situation where workers are rewarded according to their efforts. It is different from compensation where workers are paid without taking into consideration the efforts that workers put into production process. A fair compensation budget is thus the total amount of money that workers are paid according to their efforts. Adams County is a business that has recruited a new manager called Sue Meyers. The business also has a human resource manager called Amy Carlson. She has held this position for the last two years though she has not been very successful. This is because she was under a male manager who could not work with female workers freely. The former manager did not treat workers equally because, in this business, women were not paid the same salary as men. The new manager noted that women were not paid an equivalent rate as men for the same work. Question 1 What factors in the current compensation system for the county not identified here might influence Amy’s response? The current compensation system for the county pays women less salary than women. This is not fair because all workers are entitled to the same remuneration. However there are a number of things that will influence Amy in order to change the situation of unequal treatment of men and women in Adam County. First, Amy should research and find out whether both men and women are allocated the same duties in the company. She should evaluate this to find out whether, the fact that women are paid lower salaries than men is justified. Apparently, the previous manager might have been paying men more money probably because they were subjected to more work load. Amy should find out exactly why this was the case and address the situation from that point. Secondly, Amy might be influenced by the fact that women take more leave days than men. It might have been possible that the lower pay for women was because they take long leave days, for example maternity leave. This time the worker is not beneficial to the company and it would be justified for women to take a lower salary. The female workers might be justified to take a lower salary or lack of appointment as departmental heads because they lack the necessary skills. Such skills include ability to team work, working under pressure but not expecting an extra pay. For women this might seem hard because of their biological make up and their household responsibilities. These responsibilities such as child bearing and raising might be inhibiting the full performance of women at the workplace and therefore cannot be relied upon, for example, to do activities such as those of departmental heads. In addition, by the fact that departmental heads work involves a lot of travelling, women might not handle such tasks because of the constraints put on him by society. For example women who take a lot of time away from their husbands are often branded bad and false accusations of engaging in extra marital affairs while away for a prolonged time. Amy might also consider the commitment workers have towards the business. She will be influenced by those workers who have a spirit to work rather than those who work to earn money. To identify these workers she will be guided by how, for example, workers are punctual to work. The quality of work that such a worker does is also a crucial item to consider. If for example, workers are assigned similar duties, the manager should determine who among those workers the first to do the job is. The manager may also consider commitments outside the workplace, for example, commitment in family affairs and other matters connected with that family. There is a direct link between the performance of the work and the relationship with spouses at home. Workers spend a lot of time in the workplace and also in the family place. The balance between the two places is important for the profitability of the company. In addition, the number of dependents the worker has maybe influencing the level of performance. This is because the company might be extending certain services to the family of employees. Therefore, the company expects this employee to perform well to cover that cost. In a workplace, there different kinds of body defects that workers might be suffering from. Some are color blind, and therefore, not able to analyses written facts as required. Others are physically challenged and thus cannot perform as required of them. These body disadvantages influence performance and might act as a basis to for making certain decisions in the workplace. For example, people who are physically challenged might require additional allowances to for they need extra care and resources. This will motivate them to work for the business. Amy, therefore, should take into consideration that disabilities are an hindrance to performance which in turn affects payment. There should be a balance between the salaries of people working in the same industry. Unequal salaries are demoralizing to those who receive low salaries but have the same qualifications, they do the same tasks and under the same working conditions. The employer should make all efforts to ensure this difference is checked to discourage job hoping. When workers shift from one job to another there is often lack of competency among workers, low performance, and lack of commitment. The amount of money the company spends on salaries and the source of revenue for the company might influence future decisions to make adjustments in salaries of workers. The company should have a strong financial base and that shows probability of increasing in future. Business should make decisions to increase salaries and also expect increase in running expenses. The company should also expect fluctuation in profit and other sources of revenue. This decision should be factored by the human resource manager as he designs a new compensation plan. The type of industry is important when making important decision in a business such as any salaries and remuneration decision. This is because industries make almost similar decisions about their affairs, for example, in tourism industry there is uniform standards that every player must abide to. Further, there are other codes of conduct that must be observed such as salary increments and adjustments must be considered by the industry managers. This therefore affects the individual decisions that a company makes. Playing the role of Amy, how would you respond to Sue’s statement? The fact that women might not be treated equally due to their biological and society limitations might force the company to implement a pay-for-performance system. This would ensure that a fair amount of salary would be awarded to each worker. Alternatively, the workload between men and women should be balanced such that they are assigned similar roles by the manager. In addition, the manager can present the fact that the current unequal compensation is justified by the fact that most of the women employed are not experienced and demonstrate little commitment to work. Further, by the fact that there is unequal payment does not reflect unequal treatment of women but the law stipulates that. The move to equalize salaries should be approached carefully because of the fact some will have to take a salary cut and some an increments. This will attract criticism from losers and the reputation of the business maybe ruined. The company may also be subjected to law suits and demands put on it to reinstate the previous salary scales. In addition, a salary increment must not come in monetary terms but can come in terms of promotions, training and insurance. The company can also consider introducing a contract form of payment where workers work on 3 months contract which can then be renewed to a six month months renewable subject to a certain performance level. Question 2 Put yourself in Amy’s shoes and answer Sue’s question, and identify how you plan to proceed with the briefing report Sue will present to the commissioners. Across-the-board cut is a situation where worker are rewarded using the same amount of salary regardless of their efforts in the workplace. This method is not encouraging because hardworking individuals do not receive a fair pay for their efforts. It is thus unpopular and not used in many organizations. Briefing Report for Sue to the Commissioners Adam county wishes to implement across-the-board salary cut because the company requires cutting on budget expenditure. Amy the human resources manager should write a report that indicates that across-the-board salary cut has a number of disadvantages which she should include in her report. First, the method would kill the morale of workers to work. A pay cut is a similar to a loss which would hurt the workers. Secondly, the public relations level of the workers with the top management would greatly deteriorate. This would in turn affect production of workers in important areas of the business, such as, customer handling. Third, a uniform pay cut would encourage experienced workers to seek employment elsewhere. This would leave the organization without experienced staff and lead to its collapse. Fourth, a uniform pay cut only earns short term benefits because reducing of workers’ salaries to cut on expenditure interferes with an organisations most important assets who are the workers. A low salary also implies lack of motivation for career development and advancement. A company and the economy of a country depend on career development to run key industries and affairs. With these disadvantages, Sue should present to the committee the benefits of the alternative method which is pay-for-performance system. First, the method is widely used by many companies which it is beneficial in the management of wage bill. Secondly, the system encourages workers to add more efforts so that they can increase their net pay. This increases the production of the company because workers compete to produce. Third, there is competition in the work place which is brought by the need to make more money. This ensures the business is competitive over others in the same industry. In addition, competition is important for the growth and development of careers. Finally, the method is cost effective to the company because production matches payment. The business cannot, therefore, incur a loss in the long run. In conclusion, there are various ways of rewarding worker for the work they do to the organization apart from paying them a good salary. First, workers are often promoted from one job group to another which increases their career satisfaction and status. This is a greater reward than monetary reward because it is long term and can be lead to more benefits. Workers often consider money as the greatest reward they expect from work. There should be change of mind from monetary rewards to other kinds of rewards such as more value for training and refresher course in the workplace. There should also be more appreciation by workers for benefits such as pension payment, health and insurance. Read More