Recognizing Employee Contributions - Essay Example

Recognizing Employee Contributions Number June 6, Faculty Recognizing Employee Contributions Introduction Employees are the most valuable assets in which any successful company can make an investment. The profitability and success of an enterprise are deeply correlated with the treatment offered to the employees. Employee compensation and benefits as a motivational tool should be reasonably considered a time and again to ensure that the contributions of workers are correctly recognized (Branham, 2012). The growth of a company in terms of profits and revenues can significantly be attributed to the excellent performance and concerted efforts of the workforce. For the company to ensure its continued growth of income and profits, periodic reviews of the both the basic pay and employee benefits is inevitable. When employees consider their compensations as being unfairly small than those of peers in other organizations and about the companys performance, they get demoralized. High employee turnover is experienced in such companies as employees move to organizations considered to have better compensation plans. The times are changing, and the business environment has become highly competitive. Whether a company stays at the top of competition depends on the quality of its workforce. Companies must offer attractive compensation and benefits schemes to employees to attract and maintain such workforce. Recognizing Employee Contributions Any method of incentive pay must take into account several factors. First, it should consider and assess the level of employee needs and readiness. Secondly, the process should be aligned with company goals. Thirdly, the relationships among and between the employees and the supervisors, their willingness to take risks, communication and self-improvement should be taken into account. The sharing of company profits and piecework coupled with standard hour plans are proposed as important methods for determining the incentive pay (Collings, Wood & Caligiuri, 2014). Incentive pay involves rating employees pay to their individual performance in the case of piece rates or that of a work group or team to the performance of the company. The proposed methods at an individual level can either be based totally on the performance of a person or relate to a particular performance-based bonus adding to a fixed salary. The piece rates, for example, involve a payment scheme based on the units produced by an individual or a group. At a group or team level of performance, several indicators are used to measure a groups performance beyond set different targets for which incentives are given. The profit sharing method relates the performance of both individuals and groups to the companys performance (Collings, Wood & Caligiuri, 2014). The achievement of set profit targets arising from the efforts of groups or individual employees may be structured to include percentage benefits to the employees based on the profits. These methods are bound to increase the level of employee motivation and the general performance. Where incentives are based on the piece rates, employees would work hard to ensure that they produce the maximum possible units of output. Where such incentives are pegged on the profits of the company, efforts would be made by groups and individuals to ensure the performance of the business is excellent. The influence of the government on the issue of employee benefits in the United States intensified during the Great Depression. In the todays highly competitive environment, employee benefits have been profoundly influenced by legislation, control of the economy and monitoring of the benefits programs. Core law requirements demand that employers must make expenditures for the safety and health of the workers and various other forms of insurance that aim at indemnifying employee loss of income. Such loss may be through old age, injury, illness or unemployment (De St. Aubin & Carlsen, 2008). The law in the USA determines how companies develop and operate particular benefits and especially the retirement benefits. Such expenditures are mandatorily required by the law regardless of whether the employees desire them or the employer wants to make them. There are several legally mandated benefits in the US today which employers must pay either in part or whole. These include the social security payments in which the employer pays at the same rate as is paid by the employees and an additional percentage for Medicare (Deb, 2012). The state also mandates the payment of the unemployment insurance by the employer and the workers compensation benefits. The state further requires that employers contribute the family and medical leave benefits and the COBRA benefits for companies with at least twenty employees on more than 50% of the typical days of business. Other benefits are optional and determined by the employer. Considering the competitive business environment of the 21st century, the federal requirements for employee benefits appear far much below what a competitive benefits program would constitute. The organization should consider providing life and disability insurance, paid leave benefits plans, education assistance schemes, retirement savings plan, and employee wellness programs to its employees. Although such benefits plans are at the secretion of the employer, they can go a long way in increasing the motivation of the workers and employee retention. Many companies use a combination of various benefits as a technique to survive the stiff competition (Price, 2009). When designing benefits plans, there are essential concepts that companies must take into account. Firstly, the financial protection that the benefits program provides to the employees and their families. Secondly, how actually the benefits program supports the companys productivity through promotion of positive employee morale. Thirdly, the consideration on how the program acts as a tool for recruitment that attracts and maintains highly talented employees at a reasonable cost. These concepts are important because benefits plans are mostly meant to boost the companys performance and competitiveness without incurring costs that are not worth the course. For the benefit and compensation plans to achieve all their goals, they must efficiently communicate the plans to the employees at a reasonable cost in terms of time and resources. The communication of the compensation and benefits plans plays a central role in the attainment of the firms strategic objectives (Price, 2009). Employees should have a solid understanding of both the systems, the packages and the decision-making process that determines them. An open consultative approach to communication can efficiently achieve the task as opposed to the commonly used technique where communication is taken as a prerogative of the management. The efficiency of the conventional methods thus is quite small given the cost in terms of time and resources and the effectiveness in communicating benefits plans. Many employees are hardly well-informed about the plans, have little knowledge of the decision-making processes and make little or no contribution through feedback implying the inefficiency of the techniques. The efficiency and effectiveness of the communication techniques can be maximized in an open discussion where the employees make input and contribute through ideas (Deb, 2012). The techniques applied in many companies merely involve employees and as a result employees’ morale diminishes to the effect that an incentive to look for work elsewhere is created. Although incentives have the potential to enhance the performance of a company, employees may not always earn them through ethical and moral means. Where the incentives constitute a great portion of the total compensation, rewards for goal achievement come with the risk that employees may be tempted to engage in unethical practices. Employees cheat to earn bonuses and at times may do shoddy jobs to increase the number of units of production (Collings, Wood & Caligiuri, 2014). Where incentives are based on the prevention of a harmful thing, there is a risk that employees may put the dangerous thing in the process so as to increase the incentives. Incentives come with the cost of creating inequalities in pay that at times may harm the performance by affecting the morale of the employees that earn less. Employees are known to assess the fairness of compensation in terms of how their pay compares with that of peers that perform similar tasks. Pay inequalities can result in jealousy, frustrations, resentment, and disappointments. There is another significant risk that the withdrawal of incentives that employees are used to even at the times of poor performance will result in reduced intrinsic motivation. Whether optional or legally mandated, incentives are irreversible and become a lasting cost. It is necessary that companies cogitate deeply concerning the symbolic power of incentives. A recommendation that a careful thought should be done in designing incentive programs, determining who distributes them, where and to whom they are distributed is hereby made. For the employees to give serious attention to the meaning of the incentives and pursue them ethically, the incentive programs should be adequately communicated. The active participation of leaders of a high status can make a positive impact. The company should inculcate the ethical issues in its culture and endeavor to de-campaign the negative consequences of incentives (Branham, 2012). Companies should also ensure that incentives do not constitute a great portion of the total pay and design them in a way that does not lead to pay inequalities. Such care and prudence if exercised can help reduce the risks associated with incentives and making them highly effective. Conclusion The contribution of the employees in any organization around the world cannot be undermined. Companies should consider investing fairly in the workforce to reap the benefits of achieving all of its goals and objectives. The survival of any company in the increasingly competitive global business environment depends on how effectively it manages its workforce (Branham, 2012). Every company aspires to deliver superior products and services, maximize their production capacities and earn maximum revenues and profits. The attainment of either of these long-term goals is determined by the quality of the workforce that a company has. To attract people with desirable job qualifications and experience, organizations in the 21st century must consider offering competitive compensation packages. The company in question does not seem to understand the value it should attribute to its workforce. The demotivation observed and the intentions of the employees to leave the organization can be linked to the perceived low compensation packages and benefits offered by the company. The company must consider introducing some optional benefits to the employees and revising their compensation packages with the rising revenues and profits to revert the situation. Evidence shows the importance and contribution of the qualified employees to the companys performance. However, the companys management does not live up to the expectations of the employees and hence exposing the company to the risk and danger of failure. Failing to properly manage an organizations workforce can be likened to failing to manage a companys future. References Branham, L. (2012). The 7 hidden reasons employees leave. New York: AMACOM, American Management Association. Collings, D., Wood, G., & Caligiuri, P. (2014). The Routledge companion to international human resource management. De St. Aubin, D., & Carlsen, B. (2008). Attract, engage & retain top talent. Bloomington, IN.: AuthorHouse. Deb, T. (2012). A strategic approach to human resource management. New Delhi: Atlantic. Price, A. (2009). Human resource management in a business context. London: Thomson. Read More