Total compensation comprises a combination of monetary and non-monetary rewards offered to employees so as to motivate them to be more productive in the workplace. Motivating employees is also one way of retaining them at the organization and is, therefore, one of the objectives of the human resource management (Wilson 57). The results of a well designed and implemented total compensation include an enhanced performance at the individual and organizational level, employee loyalty and improved job satisfaction (Heneman 33).
The Makey Company holds a belief that excellent customer service is an essential element for any business and holds this objective in higher priority than the profit maximization objective. They also believe that ensuring that their employees are kept motivated and happy at the workplace is one way of ensuring that they deliver excellent customer service by working as a team to ensure that the best service is delivered to the customer (Keen 91). The company, therefore, employs a range of intrinsic and extrinsic rewards in keeping its employees motivated and enhance their job satisfaction (Mathis and Jackson 71).
The company, for instance, rewards its employees with trips and outdoor adventure days. It does this with the objective of connecting its staff with the business values that is the love of outdoor lifestyles. The company believes in giving a share of the business profits to its employees and in 2014, the Makey Company paid a 10 percent company-wide bonus to its employees in 2014 after the company reported impressive sales of $ 2.9 Billion. Such practices go in line with the company's belief that employee passion together with effective management entailing the four elements of sacksful management translates to excellent customer service which results in good company performance (Marshall 164).
The practice of sharing profits with employees is not common among businesses in the United States. A few companies, however, practice the same. Enterprises that share profits with their employees include; Huawei (A Chinese telecom giant) and Waitrose (a British online grocer). The idea of sharing profits with employees, in my opinion, is a good practice. Not only does it instill a sense of ownership among employees but it also results in employee retention and enhances the motivation of employees. The effect of this is that the company’s performance is improved (De Cremer and Tao).
The Makey Company’s chief weakness was evident in its strategic review and was rooted in the way Makey’s financial and human resources were directed towards improving the catalog business but while limiting resources channeled to the retail function of the company. Also, the decentralization of management functions hampered the effective infusion of company values with non-corporate facilities (Kerr and Rifkin 18). From a total rewards perspective, the Makey Company responded to these weaknesses by carrying salary surveys and designing job descriptions. This enabled the company to design a compensation and benefits plan so as to overcome the weaknesses mentioned above.
Works Cited
De Cremer, David, and Tian Tao. "Huawei: A Case Study of When Profit Sharing Works." Harvard Business Review. N.p., 2014. Web. 27 Jan. 2017.
Flamholtz, Eric. Effective Management Control. 1st ed. Boston: Kluwer Academic Publishers, 1996. Print.
Heneman, Robert L. Implementing Total Rewards Strategies. 1st ed. Alexandria, VA: SHRM Foundation, 2007. Web. 27 Jan. 2017.
Keen, Thomas R. Creating Effective & Successful Teams. 1st ed. West Lafayette, Ind.: Ichor Business Books, 2003. Print.
Kerr, Steven, and Glenn Rifkin. Reward Systems. 1st ed. Boston, Mass.: Harvard Business School Press, 2009. Print.
Marshall, Don R. The Four Elements of Successful Management. 1st Ed. New York, N.Y.: AMACOM, 1999. Print.
Mathis, Robert L, and John Harold Jackson. Human Resource Management. 1st ed. Mason, Ohio: Thomson/South-western, 2003. Print.
Wilson, Thomas B. Innovative Reward Systems for the Changing Workplace. 1st Ed. New York: McGraw-Hill, 2003. Print. Bottom of Form
