Compensation Strategy of the Organization

HRM 533 Assignment 5
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HRM 533 Assignment 5
Question 1: Determine how innovations in employee benefits can improve the overall competitive compensations strategy of the organization.
The world has rapidly transitioned over the years and the field of human resource management is not an exceptional. Employers have sought for more innovative and creative rewards for their employees to increase their motivation as well as acknowledge their needs for being creative and accomplishing their individual goals. Therefore, innovations in employee benefits have consequently improved the overall competitive compensation strategies in organizations (Westman, 2010). Some of the innovative employee benefits include the provision to use internet at an employee’s workplace for personal reasons such as socializing with friends, shopping online, and sports betting pools among others. The modern employee’s needs are unique and diverse compared to the traditional ones and employers should be able to appreciate this in order to effectively nurture their unique qualities and abilities at the work place effectively. The work place should provide an environment that encourages professionalism and growth of the employees holistically as well as ensure the organizations compensation strategy is competitive. Innovative benefits serve to enhance employee’s commitment improving their overall performance and productivity. (Shanks, 2010).
Additionally, an excellent compensation strategy differentiates an organization from others in the job market consequently bringing the differentiation within the organization making top talent employees and other excelling employs identify with the success through innovative employee benefits (Society for Human Resource Management, 2009). The effectiveness of an organizations compensation strategy makes employees share with others promoting the compensation competitive strategy of an organization especially among rivals or competitors. This is an indicator that an organization values its human resource as the most important asset. Innovative employee benefits also increases employees focus on delivering results to their organization because there is sustainable motivational approaches that are innovative and beyond the traditional fringe benefits. Effective competitive compensation strategy develops a competitive advantage improving the overall performance management best practices in a particular organization.
Some of the competitive compensation strategies an organization can adopt include rewarding employees for competencies through annual bonuses, merit based benefits, stock options and innovate benefits such as a paid holiday for recognition of outstanding performance. This is an effective reward system that ensures employees remain committed towards achievement of the organizations goals after the organization clearly communicates to its employees the key competencies expected and helping them towards achieving them. Through this important knowledge, skills, and behaviors are also promoted contributing greatly to outstanding performances. Effective reward programs should be designed to successfully deliver both extrinsic and intrinsic motivation to the employees while at the same time ensuring the rewards are innovative to improve the overall competitive compensation strategy of a particular organization. Compensation packages should be tailored according to the needs of the employees in order to promote commitment while at the same time meeting important personal goals together with those of the organization.
Question 2: Explain how innovative benefits could be tied to specific jobs
In a highly competitive environment for talent, using innovative benefits to show appreciation for employees is a great approach to retain employees and reduce employee’s turnover as well as increase their productivity at all levels (Westman, 2010). Innovative benefits may be tied to specific jobs depending on employee’s abilities, knowledge, skills and other characteristics and competencies such as leading, analyzing, creating, adapting, supporting, organizing, and presenting. Specific jobs require a specific set of skills and abilities and therefore an organization must ensure innovative benefits are applicable to specific jobs employees’ exhibit outstanding performance. For instance, most managers are required to have leadership competencies and effective leadership in a given department within an organization may be innovatively rewarded through a paid trip or holiday for the outstanding leadership competencies recognized in the organization. Jobs that require career development may also be innovatively rewarded whereby an employee may be accorded on job training to advance his or her career. Some organizations may also have compensation packages designed for different job categories such as managerial compensation packages and leadership that are highly innovative to boost the motivation of employees.
The ability of an organization to have an effective compensation plan for the different job categories promotes the total reward system through the reinforcement of value added contributions of all employees as evidenced by their talents, their capabilities, and the outcomes of their assigned duties and responsibilities. Therefore, specific jobs may directly be related to the success factors of a giving organization necessitating constant motivation through innovative benefits to promote commitment and retention of top talent and outstanding performers in an organization and also through performance appraisals (Kamphorst & Swank, 2012).
Question 3: Critique the effectiveness of equity-based reward systems versus those with more creative approaches
Equity based reward systems involves the benefits that employees receive as part of their salary such as commissions and overtime payment which rewards the collaborative efforts expresses by employees towards the achievement of an organizations goals. On the other hand, the creative approaches are supplementary benefits given to employees that are aimed at ensuring commitment and high performance as well as the retention of the best and multi-talented employees. Creative rewards allow employees to experience and explore their full potentials in a balanced environment that allows creativity and meaningful engagement that promote the quality of life at work since the employers express greater concern for them. While both reward systems serve to promote employee motivation, the creative approach recognizes the importance of creativity and innovation which remains a hallmark in the human resource function of any organization. Innovation is not only essential for new approaches towards employee motivation but is also an essential element for success in every organization. Innovation provides an opportunity for efficiency through new working methods, increased growth, improved performance and innovative employee benefits.
The equity reward based systems has constantly failed to anticipate and recognize the changing needs of employees in highly dynamic and changing organizational environment. The innovative approach of employee’s benefits therefore addresses employee’s current needs beyond monetary benefits developing and retaining the best and most talented individuals. Innovative approaches allow employees to be developing their leadership as well as their functional competencies which promote core organizational processes to realize the set goals more efficiently and effectively. Additionally, specialized skill sets re...