Strategic Compensation
Question 1
Payment structures in an organization are crucial as a component of effective compensation that assists in ensuring the level of pay for certain jobs remains competitive. This competition can occur both internally and externally with the presence of equity. Pay structures with proper designing allow for rewarding by management in regards to skill and performance development while the overall base pay remains under control (Martocchio, 2010). This control is provided through caps on the range of payments on certain jobs or locations. In the several pay structures that exist, varying limitations and benefits exist such as enabling creation of a streamline hierarchy with facilitation of internal movement. Limitation in this case takes the form of lack of awareness of external market rates and the inability to control costs.
The merit system in salary structure is defined as a payment structure where measurement is based on performance against standards with the outcome initiating a raise in payment grades while determining promotion. While it remains the traditional tool in testing employee motivation on the background of time through recognition of employees with the highest productivity achievement which offers the best means of evaluating employee performance. The greatest challenge to this structure however would be the fact that is remains difficult to undertake performance evaluation on the basis of objectivity as enforcing this structure in certain organizations can be counterproductive.
Question 2
The broad banding pay structure consolidates traditional structures of pay with a composition of several narrow and wide ranges of pay also known as bands. This is contrast with the two-tier pay structure that operates on the notion that new employees are paid less than seasonal employees even though they perform the same job. As compensation professional I would consider the broad banding pay structure as it aims at supporting agility with a fast pace and de-bureaucratization of culture in organizations(Martocchio, 2010). On the other hand my decision to choose the broad banding pay structure would be due to limitation of the two-tier system that fails to motivate workers due to the low and unequal distribution of wages that it provides.
Question 3
Discretionary benefits also voluntary benefits the comprise f aspects such health insurance and sick leave that are not a required offer by law. Rather they exist as discretions which present the employer with many benefits such that they have to choose from one that can be accepted or rejected (Martocchio, 2010). These benefits can be categorized in three main aspects which include employee savings, promotion based on productivity and increase net pay. It enhances attraction and retention of workers through competitive offers that attract talent while sustaining valuable employees. Discretionary benefits promote productivity by boosting morale among employees as they feel cared for In consideration of the organization I work for i would emphasize the consideration of offering choices as it saves employees the need to acquire certain benefits as they are already provided for by the employer.
References
Martocchio, J. (2010). Strategic compensation as an approach to human resource management, Pearson Prentice Hall.
