StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Compensation Strategy - Essay Example

Cite this document
Summary
Compensation Strategy Executive Summary Various factors in a company require the company to compensate its employees. As such, variant companies adopt diverse compensation strategies to its employees. A compensation strategy seeks to reward employees for right behaviours in monetary or non-monetary terms (Bohlander & Snell, 2009)…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
Compensation Strategy
Read Text Preview

Extract of sample "Compensation Strategy"

Download file to see previous pages

However, any compensation strategy must bear the interest and goals of the company and the employee. As such, to achieve this balance, variant compensation strategies apply uniquely in a given company. This paper highlights and evaluates three compensation strategies that can apply in our manufacturing company. Moreover, it will recommend the modes of applying these compensation strategies while considering the company and employee’s interests. Introduction A compensation strategy refers to the planned utilization of the pay system as a fundamental integrating mechanism geared towards achieving company objectives and rewarding employees subject to limitations within the company (Gomez-Mejia, Berrone, & Franco-Santos, 2010).

As the human resources manager in our manufacturing company, I have the mandate of evaluating the different compensation strategies that are available for adoption within our organization. Actually, the best compensation strategy will ensure attraction and retention of critical employees. Our manufacturing company has 120 employees and various compensation strategies can apply to them. The compensation strategies that I will evaluate in this paper include the Competitive strategy, Retention-based strategy, and the performance- based strategy.

I will hence compare and contrast them with an aim of applying them in our organization. Indeed, the compensation strategies should be reasonable to both the employees and the company itself (Deb, 2009). I will therefore determine recommendations on how to implement them within our organization. Research findings I have done substantial research on the three compensation strategies and gathered relevant information that can help in the application of these strategies in our manufacturing company.

Most specifically, in the competitive strategy, the company pays employees the market rate. On the other hand, in the retention-based strategy, the employees earn more as they stay in the company. Additionally, in the performance- based strategy, the pay relates to the performance of an employee, the team or the entire organization. Specific findings on each compensation strategy follow here in. Findings on the competitive strategy It is notable that one of the main goals of any company is to remain competitive in the market and where possible gain competitive advantage over other competitors (Kumar, 2010).

As such, the competitive strategy seeks to retain existing employees in offering them rewards that equal to industry standards. Additionally, this compensation strategy seeks to attract potential employees by motivating them to join the company as it offers compensation that meets what others in the industry offer (Petroleum Human Resources Council of Canada, 2012). Nevertheless, the competitive strategy offers the reference company no competitive advantage over its competitors since its compensation rates are at par with those of its competitors.

Hence, this strategy may not motivate employees to remain in the company for a long time. Indeed, this strategy keeps the management at risk of fluctuating wages, as the industry would dictate. As such, where the company cannot keep up with the escalating wages, then there is a high risk of employee turnover. Moreover, the existing employees are at a high risk of leaving the company if another company offers higher rewards than the reference com

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Compensation Strategy Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Compensation Strategy Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1470831-compensation-strategy
(Compensation Strategy Essay Example | Topics and Well Written Essays - 1000 Words)
Compensation Strategy Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1470831-compensation-strategy.
“Compensation Strategy Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1470831-compensation-strategy.
  • Cited: 0 times

CHECK THESE SAMPLES OF Compensation Strategy

Petro-Canadas Total Compensation Strategy and Program

Petro-Canada's Total Compensation Strategy and Program Contents Introduction 4 Overview of the Company 4 Compensation Program for Applications Analyst I 5 Cash Compensation 5 Benefits 5 Medical Insurance 6 Income security 6 Time off benefits 7 Pension plans 7 Life Insurance 7 Other benefits 8 Comparative analysis 8 Internal 8 External 9 Conclusion 9 Appendices 10 Appendix 1 10 Reference 13 Bibliography 14 Introduction It is imperative that large organizations are associated with better salaries while the smaller ones offer lower salaries in comparison to their counterparts....
6 Pages (1500 words) Research Paper

Designing a Compensation Strategy

compensation of the executive is often a continuous and complex subject that involves the nature and process of the pay-setting.... The issue of the supervisory rating is related to executive compensation in banks, in that weaker ratings are closely related to intensive outside monitoring by the regulators.... As such, the most favourable executive compensation design can be developed from a trade-off between risk shifting and perk consumption both of which are agency problems that the executives are faced with....
10 Pages (2500 words) Literature review

Compensation Philosophy and Critical Components of A Compensation Strategy

  Compensation Philosophy and Critical Components of A Compensation Strategy Defining Compensation Compensation can be defined as the total paymentthat includes monetary as well as non-monetary part made to an employee in lieu of the work performed according to the need of an employer.... Critical Components of a Compensation Strategy Greene (2011) argues that before formulating a Compensation Strategy it is necessary to identify all its components....
3 Pages (750 words) Research Paper

Compensation Strategy of Bank of America

The Compensation Strategy is designed depending upon the business strategy and goal.... The strategy depends upon both the internal and external factors as well as on the life cycle of an organization (Bhattacharya & Sengupta, 2009, p.... The author deals in understanding the compensation policy of Bank of America and concludes that Bank of America offers a versatile range of benefit programs that help the employees to meet their diverse need at the various stages of their life and help them to plan for future....
6 Pages (1500 words) Case Study

What Shapes External Competitiveness (Compensation Strategy)

Finally, coming to organizational structure, it is believed that whether the business is labour or capital intensive, technology driven or market driven- all contribute towards the kind of wage or Compensation Strategy that would be enforced.... Compensation Strategy:In the sphere of external competitiveness, that is wage bargaining, there are several factors which make their mark.... The “comparing of compensation rates of one organization with that of its competitors” is what determines Compensation Strategy....
2 Pages (500 words) Essay

Petro-Canada's Total Compensation Strategy and Program

The project seeks to explore the total… For this purpose it analyses the compensation structure and package of Applications Analyst I who belongs to the Department of Information Systems.... However, the report analyses the above compensation structure before This paper illustrates that Petro-Canada is a public organization producing oil and gas organization and taking part in all of the upstream and downstream operations.... The cash compensation received by an Applications analyst I in Petro-Canada is CDN$75,000-85,000 (Tang, 2010)....
6 Pages (1500 words) Research Paper

Compensation Strategy in Walmart

From the paper "Compensation Strategy in Walmart" it is clear that Walmart ensures that its pays are better and enough for its employees to work and cater to their needs.... Marketing competitiveness strategy Wal-Mart human resource ensures that its jobs are fair and competitive.... Wal-Mart compensation and benefits $12,000- $22,000 Health/ Medical Insurance (Medical, hearing and vision) Retirement/ pensions plans: 401 (k) Education Profit-sharing Store discounts Illness protection (Jathar para 2) compensation philosophies Externally competitive: the above-average pay is similar to those of other firms Internally fair, the pay provided does not depend on factors such as age, ethnicity, or nationality, but on the job description....
1 Pages (250 words) Case Study

Developing a Compensation Strategy

The author of the paper states that developing a comprehensive total Compensation Strategy is key to the overall performance of an organization and more importantly the efficiency of employees.... In as much as developing a total Compensation Strategy demands the consideration of internal and external market factors, there is a greater reward when it is in tune with the existing business strategy.... As the paper outlines, with the focus on the total Compensation Strategy of Wilson Bros, the pay philosophy reveals the foundation on which the Compensation Strategy is placed....
9 Pages (2250 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us