HR Compensation Management - Essay Example

Running Head: HR Compensation Management HR Compensation Management [Institute’s HR Compensation Management Five core job characteristics that promote intrinsic compensation. Briefly describe these characteristics, and give examples of at least two jobs that rate highly on these characteristics. Since few decades, intrinsic compensation has become a major focus of human resource professionals, and experts are carrying out researches to understand its benefits, as well as any loopholes in such an innovative strategy of HR. Besides benefits and drawbacks, HR experts are endeavoring to identify factors that promote intrinsic compensation, and have been able to recognize five core job characteristics that perform such task that are skill variety, task identity, task significance, autonomy, and feedback (Mondy, pp. 297-310, 2009). In specific, skill variety denotes the extent to which an employee gets the opportunity to show his skills varyingly in a specific task, whereas, task identity means the extent to which an employee can acquire an ownership to a task based on personal performance. Moreover, task significance is another imperative job characteristic that denotes the extent of impact of a task on other tasks, as well as individuals in the organization. On the other hand, autonomy relates to the extent of freedom of employees in terms of their decisions during the tasks. Last job characteristic enables employees to give their feedback after the completion of task, and more importantly, it means that managers and employers value their feedback in the organization. In this regard, all these five core job characteristics promote intrinsic compensation in an organization. Although many jobs rate highly on these characteristics; however, positions of marketing executive and HR managers are two of the most highly rated jobs in this regard, as it allows individuals to integrate all the five core job characteristics during their work that increases their performance, as well as their satisfaction at workplace. Describe the three contextual influences on compensation practice, and identify one influence that poses the greatest challenge to companies’ competitiveness, as well as the one that poses the least influence on companies’ competitiveness. Explain your rationale for the choices. As earlier mentioned that organizations are striving to run compensation practice in an efficient manner; however, experts have identified some factors that influence compensation practice in a contextual manner. Experts have indicated existence of inborn issue between employees and employers due to diverse objectives of both stakeholders in an organization, as the former ones strive for their equitable salary, whereas, the later ones look for maximization of their profits (Martocchio, pp. 86-95, 2008). Existence of such conflicts and issues has inclined some other stakeholders to involve in the process that are influencing compensation practices contextually. In this regard, the three contextual influencing factors are employment laws, labor unions, and market forces. In specific, employment laws or federal legislations limit organizations by defining a list of acceptable compensation practices that influence organizational practices contextually. In the USA, employment laws influence organizations on federal, state, as well as local levels. Some of the examples are Equal Pay Act of 1963, Civil Rights Act of 1964, etc. On the other hand, labor unions have continued to influence compensation practices, and such influence has been significant after the enactment of the National Labor Relations Act of 1935 (Martocchio, pp. 105, 2008) that enforce company owners to create a faithful relationship with workers, and for negotiations, employees create labor unions that influence decision-making process of the employers. Lastly, it is an observation that every company strives to hire best workers by lucrative offers and packages that has resulted in significant influence on compensation practices of the organizations. Some of the major components of this influencing factor are compensation differentials or interindustry wage (Martocchio, pp. 106, 2008). Moreover, market influence is the major factor that poses the greatest challenge to companies’ competitiveness, as many companies confront difficulties in competing for wages and lucrative packages. On the other hand, employment laws pose the least influence on companies’ competitiveness, as governments impose such laws on all the companies in the market, and thus, every company has to deal with it. Based on your knowledge of merit pay plans, identify at least three jobs for which, merit pay is inappropriate, and be sure to include your rationale for your choices. Studies and surveys have indicated that merit pay plans have become the most widespread practices of compensation in the United States; however, despite of its benefits and attributes, merit pay plans are not suitable for some organizations, and more specifically, for some job positions. Experts have noted that it is very imperative for HR professionals to consider job designs before offering merit pay plans to employees, as some jobs are inappropriate for merit pays, as individuals do not get opportunities to prove their skills due to lack of skills variety, task identity, autonomy, and similar job characteristics essential for merit pay plans. For example, some of the jobs that are not suitable for merit pay plans are sales professionals, production workers, quality workers, etc (Martocchio, pp. 124-7, 2008). In job of sales professionals, economic factors play a significant role, and this period of economic recession has limited the scope of sales professionals that is one of the examples of inappropriateness of merit pays for sales professionals. In addition, production workers cannot perform their task effectively in case of equipment breakdown (Martocchio, pp. 127, 2008), and similarly, quality specialists cannot carry out their tasks appropriately in case of late deliveries or low quality of raw material. In this regard, it is the responsibility of HR professionals to design jobs in a way that it may complement merit pay plans. Opponents of incentive pay programs argue that these programs manipulate employees more than seniority and merit pay programs. Discuss your views of this statement In my opinion, one of the drawbacks of seniority pay programs is its incompatibility with compensation practices and that is the reason opponents of incentive pay programs argue that such programs control and influence employees more significantly as compared to seniority and other programs. The major incompatibility is no difference package for individuals with average and employees with excellent performances. On the other hand, incentive pay programs either individual or group programs focus more on performances that is an attractive notion for employees and a problematic issue for the advocates of seniority programs. As far as merit pay plans are concerned, earlier discussion indicated that merit pay plans are not appropriate for some job positions, and thus, incentive pay programs dominate them as well. Moreover, adversaries of incentive pay programs argue that such programs incline employees to set working goals that limit their performance due to limitation of incentive pay programs, and thus, such programs affect merit pay plans of the companies as well (Martocchio, pp. 158-162, 2008). For example, if a company offers the highest incentive reward of $100 against 10% increment of performance, the employees will not be keen in increasing their performance above 10% that is a drawback of incentive pay programs, and thus, opponents of such programs are quite logical in their arguments, such as in this statement. You are a compensation analyst for Worry-Not Insurance Company, which is located in White Plains, New York. Define the relevant labor market for insurance claims adjusters and for data entry clerks (i.e., its size, number of potential candidates, etc.) and describe the rationale for your description of each market. Based on personal knowledge of relevant labor market, some factors are very essential and significant for the definition of relevant labor market, and thus, I will be considering those factors for defining relevant labor market for insurance claims adjusters and data entry clerks in the Worry-Not Insurance Company in White Plains, New York. Occupational classification will be the foremost factor in the list that will identify potential candidates based on characteristics similar to abovementioned jobs (Martocchio, pp. 264, 2008). Candidates with background of working with machines will go for data entry clerks, and individuals experienced in working with people will go for insurance claims adjusters. I will consider similar other factors by using the standard manual published by the U.S. Bureau of Labor Statistics (Martocchio, pp. 264, 2008). Secondly, geography will be the second factor considered while defining the relevant labor market that will include candidates living in White Plains and individuals living near to the New York City, as White Plains is located very near to the city. Lastly, service market competitor is another major factor essential for defining relevant labor market (Martocchio, pp. 264-265, 2008). However, it should be keep in mind that perfect matches are very rare to find, and thus, compensation surveys will provide identical characteristics of individuals compatible for mentioned jobs for the Worry-Not Insurance Company. Lastly, it is a fact that White Plains is a highly populated area with huge labor pool of potential candidates that will foresee competitive benefits and salary packages. References Martocchio. (2008). Strategic Compensation. Pearson Education India. Mondy. (2009). Human Resource Management. Pearson Education India. Read More