Introduction:
Billy’s Bar-B-Q is considering the establishment of a new Texas style restaurant in the North. They have realized that certain things like taste, work ethic, and compensation expectations are different here as compared to South. This research paper aims to explore different compensation policies. The advantages and disadvantages of different compensation systems will be discussed. The article will explain comparable worth and how the companies attempt to compensate their employees without violating federal legislation.
Compensation system:
Compensation is a systemic approach which provide an award in exchange for services to the employees (Compensation, 2012). There are different types of compensation system which include: base pay, as commissions, as overtime pay, in the form of bonuses, travel facilities, stock options and other benefits (HR Guide, 2012).
Advantages and disadvantages:
There are both benefits and certain disadvantages of the compensation system:
Base pay:
The advantage of base pay is that it ensures the employees that they will get pay checks, and hence payment of bills will never be a problem. The disadvantage of base pay is that the amount of base pay has to be equal to the services of the employee.
Commission:
Commission is beneficial in a way that the amount paid for commission job is always greater than base pay. Despite this fact, commission check is not guaranteed if the employee fails to sell product (Rumbauskas, 2010).
Overtime pay:
Overtime paychecks ensure an efficient workforce and a boost in the earnings of employees.Its disadvantage is that the company benefits more and the employees get inefficient and lethargic by doing overtime work (Manage Overtime, 2012).
Bonus:
A bonus attracts the employees to stay longer in the company and encourages healthy competition. Bonuses may lead the employees to feel that injustice has been done to them, and they are not treated fairly.
Stock options:
The stock option has same benefits and disadvantages as bonus encourages the employee to work longer in the company and they work to compete with fellow employees. However, some may get less appreciation, and they may feel are being treated unfairly (Kaput, 2012).
Benefits:
Benefits given to employees help in recruitment and longer stay of employees and the workforce is healthier. The benefits are associated with certain drawbacks which are that it will cost more for the business, and the plans will change (Belcher, 2012).
Comparable worth:
Comparable worth is also referred to as pay equity. It means that all the employees, irrespective of gender difference, who perform services with comparable skills and capabilities, should get the equal pay (Comparable Worth, 2012). The nature of job differs from one another in a company and as skills required in that particular job also varies, so does the pay scale. The job positions in a company are gender specific like females are appointed more for a post of office secretory whereas males get an appointment as construction workers. There is a need to reconsider the wages for the benefit of company and female wages should be increased to a comparable level as males (Comparable worth, 2012). All the job nature should be evaluated, and this policy should be applied. The jobs need to be graded according to the level of responsibilities and degree of knowledge required for the job. Then, after grading this, the company should adjust the salaries if any injustice is done on one gender (Pay Equity, 2012).
Compensation by companies:
The companies must hire consultants from outside who should rate the positions of the job by grades according to the skills, responsibilities and knowledge required for each position in the company. They should have expertise in rating the job position, and as they are outsiders, they do their work with justice and are not in favor or against any job position in a company. For rating jobs, a thorough knowledge is required for each job and about the employees working at that position. The consultants must make changes in the payment if an equal grade employee is getting less pay. For example, a female typist, a clerical job, should be graded equally to a male delivery driver, and they both should be receiving the same amount of salary. Males are employed to work which may be more dangerous to that of females, but a female who has job position of equal skill can be more stressful. The concept of Compensation Worth is hence applied as the employees get compensated pay. By doing this, the laws of federal legislation are not violated.
Conclusion:
Compensation system can be of many types but just like everything, each type of compensation system has certain pros and cons. It is a right of all the employees in a company that they are compensated for their services. Comparable Worth refers to the equivalent amount of pay received by males and females for the services they carry out. Companies are, therefore, bound to apply compensation policies for the employees of different gender for the work they do, so that they do not break laws of federal legislation and to save their companies from getting sued or closed by violating laws. The laws introduced by federal legislation are for the welfare of company so that they keep running and making business by following these laws. If any company is found to violate the laws, then it is heavily fined. If the companies do not give up their practices even after being fined, then they are forced to shut down their business.
References
Belcher, L.M. (n.d.).Advantages Disadvantages of Benefit Plans for Employees. Retrieved 12 September 2012 from Chron: http://smallbusiness.chron.com/advantages-disadvantages-benefit-plans-employees-36667.html
Comparable Worth. Retrieved 12 September 2012 from The Free Dictionary: http://legal-dictionary.thefreedictionary.com/Comparable+Worth.
Compensation. Retrieved 12 September 2012 from Dictionary: http://dictionary.reference.com/browse/compensation?s=t.
HR Guide to the Internet: Compensation: Outline and Definitions. Retrieved 12 September 2012 from HR-Guide: http://www.hr-guide.com/data/G400.htm.
Kaput, M.B. (n.d.).Advantages & Disadvantages of Employee Incentives. Retrieved 12 September 2012 from Chron: http://smallbusiness.chron.com/advantages-disadvantages-employee-incentives-21220.html.
Manage Overtime. Retrieved 12 September 2012 from Business Link: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1074415479&type=RESOURCES.
Pay Equity And Comparable Worth. Retrieved 12 September 2012 from Minnesota Management & Budget: http://www.mmb.state.mn.us/comp-pay-equity.
Rumbauskas, F. (17 November 2010). Salary or Salary + Commission. Retrieved 12 September 2012 from Eyes On Sales: http://www.eyesonsales.com/content/article /salary_or_salary_commission/
