1. Strategic compensation based on pay
Compensation and benefit is one of the roles under which the Human Resource Management department is responsible for, and for this reason therefore, the HRM desk office is responsible for all then activities and roles that are required as per the compensations’ laid down legislations. Some of its roles include the following.
One of the most important goals for any compensation department is to set down the compensation policies, and these include how an employee will be compensated in case of such a case arising in the course of the employee’s contractual terms. It is important to note that the employee should be informed about these terms and policies prior to his/her employment (Desler, 2010, p. 25).
Pensions
It is the compensation department’s goal to oversee the company’s pension scheme. The compensations’ department is responsible for the company’s pension schemes upon the employee’s retirement after his contractual term ends. However, this is only in the case whereby the employee is employed on permanent basis.
Fairness in compensation
When compensating an employee for example in case of an accident at work, pensions after retirement or any other factor that might lead to the same, it is the compensation department’s goal to ensure that the activity is conducted in a free and fair manner and that the employee gets a fair share compared to the cause of the compensation.
2. Contextual influence affecting companies’ competitiveness
Companies’ competitiveness in the market is one of the most important aspects of any business setting because it ensures the company’s relevance in production of goods and services to customers. One of the greatest challenges that a company may face related to this is producing products and services vertical to the market’s demand. If the services and products produced do not in any way relate to the customers’ needs, alternative companies will definitely take over. The least of challenges on the other hand will be the existence of other companies offering similar services as the company. As much as it’s a challenge in itself, it can be overcome by providing unique services and products that will make the company stand out in comparison with the others (Dessler, 2010, p. 87).
3. Subjective performance vs. objective ratings
Objective rating is derived from a chart ranging from extremely good to extremely bad that is used to rate employees’ performance in a working setting, while subjective performance is the assessment based on the resource’s usability, and looks more into what the employee can offer, but not what he is expected to. Subjective performance can be more efficient than objective ratings in cases whereby the exact amount of an employee’s proficiency and exact capabilities are required before he/she is posted for a certain task. This is because subjective performance gives the employee’s exact level of capability, while objective ratings give a very relative answer which cannot be applied for specific tasks (Noe, Hollenbeck & Wright, 2010, p. 89).
4. Profit sharing
This in employment terms is the form of payment of customers based on the company’s profitability and the roles employees have played for the company to realize its profits. Profit sharing plan as a way of paying employees can be both advantageous and disadvantageous to employees’ motivation. In cases where there is a large room for customers to make high income and the working environment (both internal and external) favors the employees, motivation will be high. However, if the employees’ hard work will not in a significantly large way interpret to high profits, the employees will be lowly motivated to work hard because regardless of whether they work hard or not, the pay will not increased or decrease with a significant share. Another thing that may motivate the employees to work hard in a profit sharing plan is high competition, whereby each employee has his own responsibilities to which he is accountable (Noe, Hollenbeck & Wright, 2010, p. 171).
5. The pay-for-knowledge pay concepts
The pay-for -knowledge concept is one of the newest payment methods in many companies that have been received with a lot of positive as well as negative criticism. Many companies have adopted it in an attempt to maintain competition in the amount of skill and knowledge that employees possess concerning the work in which they are being employees to do (Dessler, 2010, p. 116). However, this according to various institutions responsible for employees’ rights is not the most effective means to ensure total productivity especially because it undermines employment and careers’ terms and conditions. There are some career opportunities whereby this system cannot work and will be detrimental both to the career as well as the task at hand. These careers include medical, aviation and law careers. Other than the fact that these are career opportunities driven by passion, the main reason is because they do not have a defined pass mark or a measure to determined how much a candidate is qualified or not. Rather, they are duties that call for efficient training and upon acquisition of the necessary knowledge, there is no define measure to determine which candidate is more qualified than the other.
REFERENCES
Dessler, G. (2010). Human Resource Management (12th Edition). New Jersey: Prentice Hall.
Noe, R., Hollenbeck, J. & Wright, P. (2010). Fundamentals of Human Resource Management. New York: McGraw-Hill.
