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A compensation system can be defined as “a system that is designed to determine amount of pay given the many individuals in an organization” (Scholl, 2006). If considered in the simplest manner, all a manager or supervisor has to do is to make his/her finest estimation regarding what amount of money an employee should be given as a salary paid and what payment would be acceptable for the employee. On the other hand, if compensation is considered in an intricate way, this system includes a number of rules and regulations (for decision-making), guiding principles and course of action for agreeing on level and structure of reimbursements (Scholl, 2006).
Thus, it is important for a company to have a compensation system that is good enough to catch the attention of expert workforce and hold on such high-quality staff members. Moreover, a good compensation system is also valuable as it assures that employees will demonstrate a satisfactory and responsible behavior and also acts as a motivational factor for them (Scholl, 2006).
On the other hand, awards are a very important component of the compensation system in any company or organization. They may consist of monetary awards or non-material incentives. Thus, it is really important for companies to design effective compensation systems for its employees so that they can be rewarded for their performances and accomplishments. This should take place at all organizational levels, from top to bottom. No one can go on and on about the significance and magnitude of a reasonable and impartial compensation system. Successful implementation requires that each and every one in the workforce be of the same opinion to the goals that are pursued. It is also inevitable for the employees to understand the expectations of the employers. This is not important in qualitative terms only. Companies also seek quantitative benefits. Thus, every company must establish tools for measuring quantitative achievements and then reward the individual according to his/her contribution.
If seen from a Christian worldview, every company must be devoted to design and hold up a total compensation system i.e. remunerations, awards and benefits for recognizing the contributions of its human resources. However, the companies should remember to make an eligibility criterion before the award programs. This is important to avoid any misunderstanding or miscommunication the consideration of particular employees. Thus, employee recognition programs that rewards the best employees promotes encouragement and confidence and are ultimately beneficial for the companies.
References
Scholl, R. W. (2006). Reward Systems. University of Rhode Island | Think Big. We Do. Retrieved March 9, 2013, from http://www.uri.edu/research/lrc/scholl/webnotes/Reward_Systems.htm
