OBJECTIVES OF AN ORGANIZATION’S COMPENSATION SYSTEM
There are several objectives of an organization’s compensation system. These objectives are employee motivation, employee attraction, retention of top performers and streamlining employee efforts. The company intends to design a compensation system that can justify these objectives and create a sustainable workforce (Biswas).
FACTORS THAT AFFECT A COMPENSATION SYSTEM
Different factors affect the compensation system in an organization. For Instance, the organization’s ability to pay, labor unions, government interventions, employee performance, and productivity of employees are some key factors that create the impact on the compensation system. By navigating these factors, pertinent strategies are to be made (Biswas).
HOW IS A COMPENSATION SYSTEM LINKED TO EMPLOYEE PERFORMANCE?
The compensation is linked to the employee performance. Attractive compensation plans enhance the visibility of motivation in the workplace. The motivated employees always intend to improve the work performance. Attractive compensation is the best to meet the social needs of employees. It increases the employee’s assertiveness regarding good performance to get rewards.
STEPS TO ESTABLISH A TOTAL COMPENSATION SYSTEM
Steps to establish the total compensation system are defining the compensation philosophy, linking the overall business strategy, changing the culture, rewarding the behavior, total compensation and measuring the return. There are several phases when establishing the systems. Based on the nature of work and the level of employee’s competition and capabilities, these phases can be changed or modified with time. The purpose is just to become relevant and retain effective employees (Biswas).
LEGISLATION AFFECTING THE BENEFITS FUNCTIONS OF HUMAN RESOURCE MANAGEMENT
Civil rights act and anti-discrimination act are two prominent laws that affect the functions of human resource management. For Instance, benefits or rewards are to be given to all deserved employees. These laws bring fairness to the compensation system and other functions of the human resource such as recruitment, training, promotion, job rotation and many others (Biswas).
Work Cited
Biswas, Bashker D. Employee Benefits Design and Compensation (Collection). FT Press, 2014.
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