Compensation

Good Essays
Compensation
Most organizations have formulated a certain strategy regarding compensation policy and made the relevant necessary decisions in order to set the basis of payment, differentiate payment within a specific job, and pay above market rates similar to market compensation rates or below market compensation rates. These decisions which are important by those who manage compensation systems according to Milkovich, Broderick, (1989) are the following.
Compensation's role is very important in Human Resources. Decisions regarding employment security, development and training, career opportunities, employee assistance programs and organization design, along with compensation, form patterns of human resources policies along with forming work teams and other flexible arrangements transform organization structures and are the change agent in the overall human resources strategy. Such decisions highlighted in the article are Wal-Mart’s part –time employee’s cuts at health coverage and on the other hand, the latest perk, paying for female employees to have a procedure that freezes their egg. Both form different human resource strategies as the first focus at labour costs cut back and the second to retain high skilled employees that contribute a lot to the company.
Some organizations use benefit packages, in addition to salary, to attract and retain employees. Being competitive with health, retirement, tuition reimbursement and other benefits play an important role for a job candidate to decide whether to accept a position with an organization or an employee to stay within an organization. The competitive position managers choose affects the quality of the work force and its overall costs. Paying for female employees to have a procedure that freezes their egg or cutting back healthcare benefits illustrates this position. The answers to questions such as what level of pay-base, benefits, incentive, and perquisites should be offered relative to competitors and what

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