MGHB12H3 Chapter 009: Human Resource Management - Chapter 009
Document Summary
Employees desire compensation systems that they perceive as being fair and commensurate with their skills and expectations. Compensation is a way to increase employee loyalty, way to decrease likelihood employees will be hired away by competitors. Direct compensation encompasses employee wages and salaries, incentives, bonuses, and commission. Indirect compensation comprises the many benefits supplied by employers. Nonfinancial compensation includes employee recognition programs, rewarding jobs, organizational support, work environment, flexible work hours. Strategic compensation is the compensation of employees in ways that enhance motivation and growth while at the same time aligning their efforts with the objectives, philosophies, and culture of the organization. Goes beyond simply market rates (an element of compensation planning), linking compensation to organization"s mission and general business objectives. Strategic compensation also helps with functions of hr program, can increase or limit supply of applicants. 3 important aspects of compensation planning: linking compensation to organizational objectives, pay for performance standard, motivating employees.
