Benefits and Compensation in Human Resource Management - Essay Example

Benefits and Compensation in HRM Benefits are any form or methods of appreciation given to employees for the work done though they are not the basic payment given to the employee (WorldatWork 12). They can be in form of services or cash. For example, health insurance, though the employee contributes, is more of a service while maternity pay is in form of cash. They also act as motivation to workers as recognition of the work done (Sims 18). Compensation is the rightful recognition given to an employee incase of theft, death or abrupt termination of employment (Kleynhans 209). The work that follows highlights problems solved by giving compensation and benefits to employees and its importance. Issues addressed by compensation and benefits Benefits and compensation are some of the important methods of motivating workers in an organization or a company. Due to high competition in the job market, employers seek to maintain their employees (Grobler 24). The award of benefits and compensation by employers to their employees saves them a number of problems. First, it saves the organization loss of employees because an employee cannot go for another job (Sims 458). A company that lacks good motivation to its employees will always look for more employees to replace those that have left the company due to unfavorable working conditions. An employee will always admire to work under better terms of service. Secondly, it saves poor production. This is because there will be enough workforce for the particular fields in the organization. Poor production will only result in an organization where there is no recognition on the importance of the work done by employees (Kleynhans 59). It is only that organization that gives motivation to its workers through giving benefits and compensation that will succeed it solving this problem. Poor production leads to poor achievement or profits. Poor quality of the products will always lead to poor sales in the market. This also leads to high losses incurred by the organization due to lack of recovery of the expenses incurred in the production process after sales (WorldatWork 451). Thirdly, it reduces competition on the company’s products (Kleynhans 35). If the employees leave and have the ability to start their own companies, they will, and this will give competition to the organization from which formerly employed them. If the employees are unable to start their companies, they will look for employment in other companies in the same field, which offer better terms of service. Due to the increased demand for labor force, the workers prefer the company that offers fair terms (Grobler 85). This promotes production due to enough workforce and motivated workers. Compensation and benefits saves a company of bad reputation. For example if an organization abruptly terminates a worker’s employment is and there is no compensation, definitely, the worker would not be happy with the treat given. This tarnishes the organization’s name, and as long as employers still flock the market looking for employment, they will not wish to work in an organization that treats workers unfairly. Reputation is a virtue that is very vital in the business line. If the is spoilt, the organization goes on low production due to lack of workers (Kleynhans 237). Compensations also save a company from court cases. Court cases emerge for instance when an injury occurs to an employee in the line of duty and no compensation. The worker may look for a personal lawyer and sue the company to court (Grobler 88). On the contrary, if the company awards compensation to workers incase of emergencies like these, the program will save the company time, because of all the processes undergone in processing the cases and pursuing them in court and saves finances accompanying the court cases. Suing a company in court leads to decline in the production progress, as many activities will slow down due to lack of the personnel involved in the process, and the finances used in processing the case. The innovativeness in compensation and benefits program Compensation and benefits program is a creative plan that helps in the productivity of an organization. We notice innovativeness of the compensation and benefits program when we analyze the challenges facing the production efficiency in both developing and developed countries (Kleynhans 18). Unemployment, for example, is a great challenge facing the job market in many countries. The many people who are looking for job look for organizations that have favorable terms of service, services that will meet the high economic times. Therefore, the creativity in compensation and benefits program in looking for more employees is that, it has seen the need for motivating the employees and the its effects. Concerning product and service quality, setting the program cares for how the production output will be, in an organization. The program sees that if the employees are motivated they will deliver their duties appropriately with ease and free from stress. It also sees the company’s need to retain the employees given that there is very high competition in the market for workers. That is why its establishment is of help to any organization. The program considers the importance of reputation to an organization. A company’s good reputation leads to its good production output (Grobler 224). This is why the program fights for the company’s reputation by allowing compensation and benefits for workers incase of any shortcomings. The program also foresees that, the workers already in the organization, having gained knowledge, then decide to start their own companies in the same field will bring competition to that company. This is why forming compensation and benefits programme cuts the idea because the workers will be satisfied in their field of work. The effectiveness of benefits and compensation program The programme is effective in an organization in many ways; first, it helps retain the already employed workers because they will be satisfied with the motivation given (WorldatWork 16). Secondly, it saves the company’s time and money, as it avoids court cases resulting from employees’ failure to receive compensation incase of emergency (Grobler 88). Thirdly, it ensures that the company meets its goals and objectives, as workers will avail themselves for effective work due to the motivation given. Compensation and benefits programme ensures that the organization gets the top qualified workers because, the better the terms, the more qualified staff the organization gets. The effectiveness of getting qualified staff is the last production result. Compensation systems positively influence a worker’s performance. This shows that if the compensation terms are better, it boosts the morale of the workers and in return, the morale helps in the production of the company. Conclusion Compensation and benefits programme is generally important in the production industry because it saves the company many problems as have been discussed above. An organization that lacks programmes on employee motivation generally lacks good production. Because production output is the core objective of a company or an organization, it is important to reinforce a good working relationship between the workers and their employers (Sims 27). Thus, establishing a compensation and benefits programme helps an organization in meeting its goals. Work Cited Grobler, Pieter A. Human Resource Management in South Africa. London: Thomson Learning, 2006. Print. Kleynhans, Ronel. Human Resource Management. Cape Town, South Africa: Pearson/Prentice Hall South Africa, 2006. Print. Sims, Ronald R. Human Resource Management: Contemporary Issues, Challenges and Opportunities. Greenwich, Conn: Information Age Publ, 2007. Print. WorldatWork. The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals. New Jersey: John Wiley & Sons, 2007. Internet resource. Read More