Wednesday, December 11, 2013

Total Rewards and Compensation

Final Blog
I will be focusing on the different types of compensation that is used in Human Resource Management when it comes to employees being rewarded and compensated for their work. Different compensation payment works better for different companies. I will be focusing on how each compensation works in their own way. Whether human resource use base pay, variable pay, and benefits to compensate their employees.
Base Pay
            Base pay is basic compensation that an employee receives usually as a wage or a salary. Normally human resource associate base pay between hourly and salary. “The roots of evaluation are in the nature of the organization: its mission, objectives, and environment.” ("Evaluating Base Pay Programs."). Human resource will sometimes go by these steps to plan, program management and evaluate. Job evaluation programs needs to be addressed further so management can have a better understand on how to pay their employees. There are twelve steps but I will only be writing down the first eight factors managers must follow in order to evaluate employee jobs:
“Is job content monitored and are changes acted on, are employees classified into the correct job, are all qualified and capable employees allowed access to all jobs, based on actual job-relevant qualifications, are job specifications defensible as bona fide occupational qualifications, are job evaluation factors appropriately selected and weighted, are job evaluators credible, is the job evaluation process viewed as a credible and just?
("Evaluating Base Pay Programs.").
            Human resource management must consider employee perception. Which means total amount of rewards should be distributed if the organization have adequate share. Equity if the organization wants to attract based on values and preference, or they can retain and motivate their employees. Fairness of pay so that managers can pay on a basis of performance. Some of the pay systems managers might use when deciding individual wages: “Fixed rate systems, step-rate or seniority systems, skill-based systems, and performance-or contribution-based pay. Fixed rate means everyone get paid the same rate, step-rate means pay is based on length of time in a job, skill-based means it is based on individual skill, and performance pay means wages are determine according contribution made by individuals” ("Evaluating Base Pay Programs."). Furthermore an effective pay system can help organization do a better job at administering pay programs.
Variable Pay
Variable pay means compensation linked directly to individual, team, or organizational performance. Most companies uses variable pay for incentives, bonuses, and commissions. Incentives, bonuses, and commissions may include: “Any form of variable pay tied to predetermined performance goals, After-the-fact reward or payment based upon the performance of an individual, group of employees, division or entire workforce, Cash payments based on a predetermined performance and reward schedule that usually make up a larger portion of an individual's total compensation” (Jason, C. Kovac.). Variable pay is used for to drive organization sales up by focusing on alignment, motivation, and reinforcement. Examples of alignment, motivation, and reinforcement would include “It establishes the link between organizational success and individual performance, Variable pay establishes the link with how employee actions can make a difference regarding organizational performance, and acknowledges desired behavior/results and provides positive reinforcement.” (Jason, C. Kovac.). In order to be even consider for variable pay it is based on both the organizational compensation philosophy/strategy. Here are some of the factors that is pointed out to determine who is eligible for variable pay:
“Is the employee full- or part-time? How does that affect his or her contribution? At what organizational level does the employee reside? How does that position affect organizational performance? Should employees who have poor performance ratings be eligible for participation? Does it matter if an employee is eligible for other variable pay plans? When does eligibility begin? -First day of employment? - After a probationary period? - Beginning of the measurement cycle? - Other criteria?”
(Jason, C. Kovac.).
            “The human resource manager and financial officer for a corporation should understand the value of these coverage’s if they are going to implement and maintain vision and/or dental benefits.” (Roger, S. Schultz). Benefits means indirect rewards given to an employee or group of employees as part of membership in the organization. PPO, HMO, and POS plans proliferate within medical insurance benefits. “There remain few employers that offer only indemnity plans without some form of managed care as an alternative.” (Roger, S. Schultz). Benefits play an important role in employee satisfaction. Especially when employees have a family of their own and they would like to work for a company who gives out the best benefits. Benefit costs are controlled by three factors: “Annual maximums, Co-insurance, and Benefit payments to the patient with the patient being responsible for payment of the expenses they incurred.” (Roger, S. Schultz).

Work Citied
"Evaluating Base Pay Programs." Compensation and benefits review 23.5 (1991): 20. ProQuest. Web. 11 Dec. 2013.
Jason, C. Kovac. "Variable Pay." Workspan 48.7 (2005): 59. ProQuest. Web. 11 Dec. 2013.
Roger, S. Schultz. "Employee Benefit Planning." Journal of Financial Service Professionals 53.2 (1999): 18-9. ProQuest. Web. 11 Dec. 2013.

No comments:

Post a Comment