Human Resources: Compensation Strategies - Research Paper Example

Human Resources: Compensation Strategies There have been changes in today’s business environment, thus, presence of challenges in managements for the last two decades. The main objectives to these changes are to bring about a set up where we will achieve better performance, reduce the overall cost, and facilitate flexibility, thus, positioning the business in a strategic post in relation to the current market dynamism. The greatest of these challenges is the magnitude and the pace to change. This is the duty of the human resources managers among others such as backing changes in business strategies, organizational structure and changes in the technological aspects. Reward programs have come in to enhance managerial roles, where they are effective in creating engaged employees and customers (Martocchio, 2011). Compensation is highly significant in reference to human resource strategies. This is because it is highly significant to employees’ welfare. An ideal compensation program is the one with the capacity to reward and communicate strategic goals. The structure must be in a way where the employees have the probability of achieving the goal set by the human resource team. In this paper, we will expound on three types of total reward metric namely: Health Cost/Employee, Cost of New hire and Employee Satisfaction with Reward Program. In compensations strategies metrics, it is essential for the human resource department to communicate its expectation and priorities. This is to ensure that there is awareness between the employees and the management. This interprets to any reward among other compensations linked to the metric guides, which the HRM puts in place on behalf of the company. The process makes sure that what is being awarded is performance or behavior that meets certain stated conditions. Health Cost/Employee This is an immensely significant tool in any business. This proves to the employees that the employer is considerate enough to cater for their health expenses while at work place. However, many businesses neglect this duty, thus, forcing employees to join employees’ welfare program which protects their rights. Law provides the compensation, thus, it is advisable to bind by its demands. The compensation should cover both the employees, as well as the children entitled to the employee (Martocchio, 2011). The rate of compensation can be in two forms. Human resource management can decide to cater for compensation in terms of rates. This is where an employee gets a certain additional amounts as a fee to take care for their medical affairs. Secondly, this is where the HRM decides to settle the bills directly other than through the employee. In this case, the employee is to present all relevant materials to the HRM after medical attention. Later, the business organizes on how to settle the cost (Martocchio, 2011). Before businesses decide on the most favorable metric, it has to evaluate different parameters to ensure that the final decision is both fair and ideal to the organization and to the employee. The ideal strategy applied by many businesses is where employees visit specific health centers and later communicate on settling the bills. This is because the mode is more economical as illnesses occur occasionally. The metric is also less challenging as other option. Cost of New hire A business requires new employees season after season. This is to fill the gap left following transfers, reassignments and retirement. There is also need to hire new employees in instances where the businesses grow, and demand more human resources. The cost of hiring should not exceed the benefit brought about by the new crew. This is because the business would be operating at a loss, as the marginal revenue will drop. There are other significant calculations in this undertaking where the human resource management is to calculate the benefit between hiring employees and permanently employing the employees. Hiring comes in cases where the duty targeted by the new employee is terminal. This would lead to poor decision making if an otherwise suggestion was implemented. This is a decision that enhances a business to meet its new demands within its environment (Martocchio, 2011). Employee Satisfaction with Reward Program This is a policy and program used to manage employees’ relations. It expounds its purpose to making decisions regarding employment security, development, training, opportunities, and organization’s design. It is the section in charge of appraisal patterns in reference with employees’ satisfaction level. This determines whether an employee is to lose the opportunity, be upgraded to the next rank, or put under close intervention (Yanadori & Marler, 2009). The program also acts as a venue where employees earn additional income through sharing of profit made by the firm. This creates competitiveness in the working environment, facilitates identification of corporate performance, and support of corporate values. Such a structure transforms an organization, through teamwork, and flexible arrangements, which enhance decision making by the human resource sector. Conclusion Following the above descriptions, it is evident that different metrics have different objectives. However, they are all interlinked as they work for the better of the company. The program also enhances management-employees relations, as the subordinates are aware of their role in the organization; they also realize that their duty is of considerable significance in the success of a company (Longnecker, 2008). Human Resource Department should also use fair basis of awarding employees, as standard program will stand at a strategic position in attaining the organization’s objectives. References Longnecker, B. M. (2008). Rethinking strategic compensation. Chicago, Ill: CCH Inc. Martocchio, J.J. (2011). Strategic compensation: a human resource management approach. New Jersey: Prentice Hall. Yanadori, Y., & Marler, J. H. (2009). Strategic compensation: Does business strategy influence compensation in high-technology firms?. Ithaca, N.Y: Center for Advanced Human Resource Studies, Cornell University. Read More