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Compensation System Analysis

Satisfactory Essays
Julian Xhelo
MGT307.90
5-11-14
Compensation is given to employees in return for their work performed. Companies have to find a strategy that works for everyone. First, the company has to afford to offer any kind of compensation system before trying to pass those offers to employees. Most business base their compensation system on, how much the competitors are paying, and what kind of pay are they offering. A company must be reasoning of changes, flexible, and willing to prepare for them when necessary. External competitiveness is one part of organizations compensating system. If any company wants to compete with others in the business world today their compensation plans should be planned similar to other organization, or if possible far better and strategic. A simple compensation system won’t work in today’s business because of all the competition that is out there. In order for a company to stay externally competitive, it needs to have a diverse work force and offer divers forms of pay. Organizations will develop different strategic compensation policies based on their operation and other important variables.
A well-structured compensation system could have a major impact on employee’s behavior, performance and effectiveness in that company. Most compensation systems reflect the value of the company and how the company treats their employees. Employees look at the pay system of any company and they get a general idea about the company. A well strategist compensation system will bring in the right kind of employees because it says a lot about the organization values and practices. The company has to show in their compensation system that they help motive employees by offering some sort of security, advancement opportunity, and ...

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A better the compensation rate, leads to greater the employee satisfaction. Compensation and benefits for many employees are being recognized as important part they consider when applying or accepting jobs. Pay and benefits are very important to both new employees and existing employees. The compensation system is the reason behind why people seek employment. A company with a good strategy that’s wants to compete externally is aware of what other companies are paying their employees. It will not be easy for any organization to exist for a long time if they don’t have a strategy. Every organization is unique it their own way, but their goal is mission is to have the best employees work for them. Change is expected, if organizations don’t keep up with changes, they won’t be able to be externally competitive. It will affect the organizations long term stability.
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