The purpose of this paper is to highlight the best practices followed by HRM and to acknowledge the importance of compensation and benefit strategies used in organizations all around the world. Compensation and Benefits are used by different organisations globally to attract, motivate and retain their employees. This paper contains a case studies, summary and analysis of academic journals and books to understand the latest trends in compensation and benefits field. The three primary components which are used in designing a strategic compensation plan are listed. During the course of the paper, it discusses how the compensation and benefit strategies can be tailor-made for the different generations joining the workforce, and how these strategies are used in the organisations. Further, this paper highlights four different case studies giving the reader insight on the different ways compensation and benefits schemes were used by organisations in different scenarios. In this present day circumstances, with employees having access to all kinds of information regarding salaries, wages and benefits of other companies it is extremely important for any organization to have a fair and an attractive compensation system in place.
Employees are the most valuable assets of any organization. The main purpose of human resource management (HRM) is to manage the development and performance of people employed in an organization. Some of the significant tasks of HRM comprise of attracting and retaining employees with the right skills and abilities, match people to the right positions within an organization and to align employee’s goals and objectives with that of the organizations. All these key tasks are directly or indirectly affected by compensation and benefits plan which the human resource management decides. Compensation and benefits redefines value and success in any workplace. An efficient compensation and benefits strategy is seen as an opportunity by organisations to differentiate themself from their competitors, who may otherwise take away talented workforce. Hence, organisations need to know the evolving needs of the working population to make sure they offer the most competitive package. This paper adopts a general approach which may be relevant to number of different organizations or industries and discusses how the new generation workforce is making an impact and forcing organizations to change their traditional compensation strategies. This paper also examines how companies located in different sectors and countries look at compensation and benefits aspect of human resource management, to attract and retain their highly qualified staff. Finally the paper summarizes and analyses few articles related to HR practices in compensation and benefits, and see if they fit into organizations seeking best practice. Compensation and benefit strategies for current generation workforce: Compensation is a major driver in the success of any organization and it is also true that it is one of the highest expenses for an organization. Therefore, compensation is always under heavy scrutiny by the top executives of a company. Compensation is not only carefully analysed by the management, but also analysed by employees and prospective employees. If properly executed, effective compensation design can improve organizational effectiveness, support human capital requirements of the organization, and motivate the employees to achieve key corporate strategic and financial goals (Ellig, B. R. 2007). Effective compensation and benefits strategy is no easy task, especially with the large organizations and ever-changing demands of the workforce. To construct the most attractive compensation and benefits package, organizations must now tackle the fundamental landscape change in workforce requirements and demands. Employees born in the 60s and 70s (generation X) have ceded place to a new generation of workers (generation...
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