Human Resource Management
2016-04-27
One of the most important aspect of each organization is its payment system. It includes a way to establish the relationship between the measure of labor and the measure of compensation for it. The payment system for any employer is established in accordance with the labor laws and other regulations.
The compensation system of the organization can balance many forces, including equity issues, labor markets, the financial health and federal laws. The importance of compensation to strategic human resources management is described in the paper of scientist Pynes and other specialists. According to Pynes (2013), a compensation strategy is usually associated with the mission and values of the organization, which limits the use of some form of salary and bonuses. In this case, the compensation policy significantly depends on the public opinion and public control measures. At the same time, pay system of the administrative staff is strictly regulated by the tax legislation.
It needs to pay greater attention to the factors, which can influence the compensation policy. The main of them are the following:
organizational structure – it can interfere to use the compensation system that depends on the employee's performance;
range of performance indicators – the choice of such indicators can be difficult and depends on the organization’s features;
role of the labor market and possible models of the pay system, which are used by the nonprofit organization;
public sector unions, which defend positions of employees.
As a rule, non-profit organization has a special procedure in order to regulate a personnel policy, including staffing, job descriptions, hiring process, the compensation system and bonuses and others. It can help to ensure the transparency of labor, low staff turnover and equal opportunities for all members of the organization. The hiring process differs by greater attention to the psychological tests and candidate’s understanding of the organizational strategy, its mission and the social significance of the job.
One of the important issues is the following: are employees of nonprofit organizations overpaid, underpaid or fairly paid (Jost, 2011, p. 312). In this case, the payment system of the nonprofit organization must be based on the concept of validity (or judgment). Such factors as nature and scope of employee responsibility, features and position of the organization, competitiveness of the organization in the labor market and monitoring of employees’ wage of similar organizations impact on the whole compensation system. One more related issue is the difficulty to evaluate the importance of jobs in the public sector and responsibility of the employee in the nonprofit organizations.
It should be noted that unions of employees can significantly impact on the compensation system of the nonprofit organization. The main functions of the employees’ unions are to protect and promote worker rights and to transform labor management relations in order to contribute the increasing in productivity. Also employees’ unions are interested in hiring more qualified staff that allows negotiating in the context of the compensation system and possible bonuses. There are numerous examples of that public sector unions have been successful in responding to the fiscal crises through the negotiations (Kearney, 2010, p. 92). At the same time, the overall effects of such negotiations or collective bargaining are less than in the private sector. The main reason of it is that public sector employees are less educated and lower paid (Kochan, 2011, p.2).
References
Jost, K. (2011). Public-employee unions. CQ Researcher, 21 (14), 313–336. Retrieved from http://cepr.net/documents/CEPR_News/cqresearcher-042011.pdf
Kearney, R. C. (2010). Public sector labor – management relations: Change or status quo? Review of Public Personnel Administration, 30 (1), 89–111.
Kochan, T. (2011). Transforming Public Sector Labor Management Relations: A Call to Action (pp. 1-8). Chicago: Institute for Work and Employment Research. Retrieved from http://www.law.northwestern.edu/research-faculty/searlecenter/workingpapers/ documents/Kochan_An_alternative_to_Wisconsin.pdf
Pynes, J. (2013). Human Resources Management for Public and Nonprofit Organizations: A Strategic Approach, 4th Edition. Chapter 7 and 11. Safaribooks. Retrieved 27 April 2016, from https://www.safaribooksonline.com/library/view/human-resources-management/9781118460344/xhtml/Chapter07.html
