Compensation and benefits management Essay Example | Topics and Well Written Essays - 1250 words

Compensation and benefits management - Essay Example Compensation & Benefits Management An effective compensation and benefits plan is one of the most crucial human resource procedures. A well equipped compensation and benefits policy assures effective returns for an organization. There is a famous axiom according to which a person will always have to offer things to people in return for what they acquire from them, in short, give and take. Compensation refers to this trend; however in financial terms. Compensation is the employer’s reaction towards an employee’s effort. It determines the financial worth an organization offers to its workforce in return of their services. Since employees are not motivated to work merely for the money alone, they want ‘extra’. This extra can be termed as the employee benefits. It is also commonly known as the fringe benefits. Employee benefits are non-fiscal compensation suggested in addition to money for the enhancement of employee’s well being (Biswas, 2012). Contribu tion of an effective compensation and benefit system towards organizational effectiveness An effective compensation and benefit program supports to attract, encourage, and maintain talent in an organization. A well planned compensation and benefits philosophy can benefit an organization in a number of ways (Henderson, 2006). Workplace satisfaction: Through effective compensation and benefit management, workers would be content with their occupations and would be motivated to perform better if they are awarded with adequate appraisals and incentives in return of their services. Encouragement: Every individual poses different motivational triggers. Many of them are motivated by money and willing to work for companies which offer higher pay. While some consider self-accomplishments as a greater motivation for themselves and tend to work in an environment where they find greater opportunities of learning, growth and promotion. Thus, a compensation policy that targets employee’s r equirements is more likely to encourage them to work in a desired manner. Lower Absenteeism: Through an effective compensation and benefits management, employees would not want to miss any day of their work. They will be happy with the way they are paid as well as with other incentives they desire. Minimum Turnover: If the compensation and benefit management is effective enough, then the employees least want to shift the organization. Employee’s Well-being: Through offering numerous types of incentives to your employees alleviates them from specific fears. The employees will perform with more confidence (Henderson, 2006). The city’s largest employer, Holland Enterprises after facing a massive turnover rate recently, needs to have an effective compensation system comprising of few major objectives. It has to empower the organization so that it can attract and maintain talented individuals. The compensation and benefits management should encourage employees, nurture a se nse of equity and offers a reward for their efforts. The program must help, interact and strengthen the organization’s culture, norms, and long term competitive strategy. Moreover, the compensation and benefits management should develop a cost structure which determines the organization’s potential to pay its employees. Finally, it has to coordinate with state laws and policies (Idemobi and Onyeizugbe et al., 2011). In order to attain Holland Enterprise