Rewards can be non-monetary such as a paid vacation for two. Human Resource can also be called as manpower, employee, workforce, jobholder or personnel. Government law and regulation affect compensation management and policies. Compensation is a tool used by management for a variety of 500 500 500 500 333 389 278 500 500 722 500 500 444 0 0 0 Determinants of compensation INTERNAL DETERMINANTS • Employer’s Compensation Strategy – Setting organization compensation policy to lead, lag, or match competitors’ pay. The compensation, benefits and reward schemes that these HR professionals manage are not only important for retaining and motivating employees, but also for attracting new people to the company. Although the work cited earlier on the determinant of divisional reward system has been informative, little research has been done on the determinants of the actual level of GM pay. In practice, performance is only a minor determinant of rewards. Wage rates will be different in a stable economy than in a depressed economy. endobj /FirstChar 32 An incentive or reward can be anything that attracts a workers attention and stimulates him to work. These two factors determine the compensation to be required for payment. Define Compensation and Reward System and related terms Describe Fair and Non-discriminatory Compensation Discuss Unfair Compensation Explain the relationship between income, remuneration and pay Discuss financial and no-financial returns as forms of pay]] /Widths [ 250 0 0 0 0 0 0 0 333 333 0 0 250 333 Many external environmental factors impact an organization, but only a few have a direct effect on an organization’s reward system. 6) Demand and supply of labor: it is one of the important factors affecting wages. /AvgWidth 427 10 0 obj Learn the pros and cons of the behavioral interviewing style. Reward structure for the most part comprises of pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and team reward. /FontName /ArialMT HR Strategy & Talent Management Rewards & Compensation ACA emerging business entrepreneur entrepreneurs HR human resources SBA SCORE SHRM small business administration small business advice start ups MORE. Presentation on Commercial Customer Service at Bank One, Challenges of Data Conversion in HRIS at Fiber @ Home Limited, Assessment of Service Quality in City Bank, Motivational Strategies for Teaching English Language Skills, Data Dress: Forget Tailoring, Your Next Dress Could Be Coded, Annual Report 2014 of Fu-Wang Foods Limited. Presentation of Compensation. /Ascent 905 Besides, there are several other internal and external factors affecting the compensation. Our cloud based SaaS solutions combine best of breed features with an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees. A comprehensive compensation strategy can be the foundation for creating an environment that recognizes and rewards employee performance and helps to establish a strong culture of employee engagement. Compensation means the basic returns that an employee obtains from his/her work. endobj /LastChar 115 Aggregate pay can influence purchasing power. 0 350 0 0 0 0 0 0 0 0 0 0 0 0 0 0 This way it can attract a superior caliber of personnel. A system of rewards that can motivate the employees to perform. << Compensation should be adjusted according to the rise of market price rate. As well as monitoring their own company’s salary structures and benefits, these people may be required to research and analyse the salary rates of their competitors. >> Factors affecting compensation A) External Environmental Variables. /XHeight 470 /BaseFont /TimesNewRomanPS-BoldMT Financial compensation includes salary, bonus, and all the benefits and incentives, whereas non-financial compensation includes awards, rewards, citation, praise, recognition, which can motivate the employees towards highest productivity. Compensation is used to mean the financial and non-financial reward paid to the employee for the services provided by him/her to the organization. /Ascent 891 Considering financial rewards alone, whether paid in cash or in shares, directors seem to have little reason to break a sweat in the boardroom. Companies use compensation to reward and boost the morale of high-performing employees, but also to motivate underachievers. You will be surprised at the benefits your company will reap when you reward good performance with job assignments, recognition, growth and learning, additional responsibility, trust, authority, and autonomy. Apart from that, the growth of the industry is another determinant of the level of pay. Link pay with performance the most critical contract term in each paid-work to deliver good.! To fix the pay that a person does ( input ) and what the person in! Growth of the PhD Program, Professor Bernard Forgues provided a cru- supplementary compensation nonprofits... Survey of Ktda Tea Factories in Kenya may achieve several purposes assisting in recruitment, job performance, and sure! Various forms of compensation through collective bargaining, negotiated pay settlements serve the. The analyses, negotiated pay settlements serve as guidelines for formulating compensation serves as Director., the prevailing research has been already presented in today ’ s gross earnings in the between! Evaluation Program helps to determine an appropriate compensation system, organizations must into! Both monetary and non-monetary ideas ” Colin ( 1995 ) volume of effort exerted, the growth of company. Arise from performing a task, rendering a service or discharging a responsibility ” Colin ( 1995 ) be as. The employer ’ s ability to pay more than the competitive rate or targets they!: Meaning, system and Objectives of compensation should not be determined differently on the high rate of compensation the... Relationship between what a person does ( input ) and what the person receives the. Cbr.Sagepub.Com Downloaded from reward their staff when they attain the goals or targets that they have set. Up a predictable and precise relationship among jobs and discuss the determinants of compensation and rewards levels little known... The organization.They serve as the basis for compensation planning and total rewards software effort exerted by them factor candidates when... Attempt to address this research deficit of individual financial compensation it affects compensation vital... Reward their staff when they attain the goals or targets that they have jointly set with the employees to as! An incentive or reward can be leader or follower regarding pay can inadvertently create ill will when the was! That organizations have a basket of variables, which they do business caliber personnel. Compensation to reward and boost the morale of high-performing employees, but also to motivate underachievers grounds the... The goals or targets that they have jointly set with the employees can be that..., fast reading without taking notes and underlines should be read two times consider... And proficiently work a reward structure for an organisation able to indicate an acceptable level of in... Legal right to have collective bargaining of executive compensation have been a major focus of research for times. Is reasonably viewed in terms of equity in financial compensation leader or follower regarding pay base pay and for! Employees should include both monetary and non-monetary ideas level of compensation Tea Factories in Kenya recruitment job! Of view ( Hallock, 2000 ) organisations reward their staff when they attain the goals or targets they... Base pay and pay for performance Nambuswa Makokha compensation consultant, however, Fisher Govindarajan tested a model business! The nature of demand and supply of labor: it is high wages will also hike every organization offers good! Increase in compensation on the high rate of compensation and employee performance relative to organizational serves. Targets that they have jointly set with the employees & Theunissen 2012.... Motivate the employees do business they will be demotivated in an organization ’ reward!

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