From the Islamic perspective, one major drawback in this organization compensation policy is organizational injustice towards employee. According to Abulhassan (2006), Islamic principles are concerned with justice and fairness. Organizational justice is essential as it represent employee’s perception about fair treatment in organization (Murtaza et al, 2011; Prof. Dr. Muhammad Ehsan Malik et al, 2011). Greenberg and Baron (2003) found that organizational justice comprised of employee’s perception toward distribution of outcome and perceived fairness.
There are four axioms that govern Islamic ethics, namely unity, equilibrium, free will and responsibility (Naqvi, 2001). Islamic ethical system that is related to overcome this drawback is the concept of ‘adl or justice. Employee should be given compensation equivalence to the efforts given. When their efforts are valued justly and rewarded fairly, employee’s motivation will increase. Subsequently, their performance is enhanced. Considering the fact that Lu Yueting has worked in the company for more than 15 years, his salaries and wages should also in proportion with his experience in the company. His merit should increase to recognize his past work behavior and also to reflect changes in experience or skill. 15 years of working experience in the company makes a person very skilful. Thus, Lu Yueting should be compensated for that. Besides, the cost of living in 1993 will not be the same with that in 2009. The cost of living adjustments should be increase to create satisfaction in employee. The increment has to be equal to all employees. Therefore, the company needs to increase the cash compensation in terms of merit and cost of living adjustments.
Hashim (2009) and Khan et al...
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Khan, B., Farooq, A., & Hussain, Z. (2010). 'Human resource management: an Islamic perspective. Asia-Pacific Journal of Business Administration, Vol. 2, 1, p. 17.
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Naqvi, S. N. H. (2001). The Islamic ethical system. In Khaliq Ahmad & Abulhassan M. Sadeq (eds.). Ethics in Business and Management. London, UK: ASEAN ACADEMIC Press.
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The Equity Theory touches on the effects these situations have on the employee’s motivational level. In society today employees are constantly comparing how they are treated compared to others within the company (Carpenter, Bauer, Erodgogan & Short, 2013). A major challenge being faced is the fact that everyone will see themselves as unappreciated for the things they contribute to the company when in fact they may be receiving the same treatment as their colleagues (Pinder, 1998). A person tends to base fairness on how other people or groups, otherwise known as referents, are rewarded for their “input-to-output” ratio compared to their own. The ratio has to deal with the way a person feels they are giving back to society compared to the “outputs” or rewards they feel they are entitled to for their contribution. Another theory in the work place is the expectancy theory. This theory says that employees will consider if the hard work will pay off, second is if their efforts will lead to greater rewards, and third is if the award valuable to the individual. Managers can use these facts to their advantage to motivate employees by awarding their hard work (Carpente...
Noe, Raymond A., et al. Human Resource Management: Gaining a Competitive Advantage. 7th ed. New York: McGraw-Hill/Irwin, 2010. Print.
With the concept of organization justice, Shkoler (2017), defines the concept of organizational justice as the “Perceptions of the degree to which an organization provides its employees with appropriate, fair and respectful treatment, adequate and accurate information, and resources and rewards.” (Shkoler & Tziner, 2017). With this, the researchers (2017) found that employees who perceived injustice in the workplace and acted to resolve the issues developed some behaviors that demonstrated negative feelings towards the organization. These behaviors included a lack of motivation and manifestations of mistrust towards the workplace or the manager. (Shkoler et al., 2017). The consequence of perceived injustice to employers is job burnout. Emotional intelligence was measured using the Trait Emotional Intelligence Questionnaire-Short Form. Organizational justice was measured by the justice scale and burnout was measured with the Maslach Burnout Inventory. Work Misbehavior was measured by the Interpersonal and Organizational Deviance Scale. Meetings were conducted among threatened participants to gather the information about what might be going on in terms of employee’s personal, social, and mental health. This included issues of expertise, self-esteem,
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.
Ethics in business is a highly important concept, as it can affect a company’s profits, salaries paid to employees and CEOs, and public opinion, among many other aspects of a business. Ethics can be enforced by company policies and guidelines, set a precedent when a company is faced with an important decision, and are also evolving thanks to new technology and situations that arise due to technology usage. Businesses have a duty to maintain their ethical responsibilities and also to help their employees enforce these responsibilities in and out of the workplace. However, ethics and the foundation for them are not always black and white. There are many different ethical theories, however Utilitarianism, Kant’s Deontological ethics, and Virtue ethics are three of the most well known theories in existence. Each theory is distinct in that it has a different quality used to determine ethicality and allows for a person to choose which system of ethics works best with both the situation and his or her personal ethical preferences.
Tracey, W. R. (1994). Human resources management & development handbook. Amacom books. Retrieved from EBSCOhost.
Remuneration management is defined as the sum received for an employment or service delivered, this includes the money received on a monthly basis as well as benefits given as rewards (investopedia,para.1 ). Individualism need to be taken into account when implementing these remuneration structures or reward schemes, equal pay plays a role in balancing earnings among the diverse workforce (Shen, Chanda, D’Neetto and Monga,2009,p.241). The Woolworth’s Holdings uphold remuneration policies which have the purpose of making sure to attract and hold on to the best talent, that they are congruent with the strategies of the company and are the determinants of performance during the short and long phases. The policy considers the board members and the employees. This policy manages employees of the company by giving...
Fisher, C., Schoefeldt, L., & Shaw, J. (1996). Human resource management. (3rd Edition). Princeton, NJ: Houghton Mifflin Company.
Human resource is the most valuable and unique asset of an organization. The successful management of an organization’s human resource is an exciting, dynamic and challenging task , especially at a time when the world has become a global village and economies are in a state of flux. The lack of talented resource and the growing expectation of the modern day employee has further increased the difficulty of the human resource function.
Formalized compensation goals serve as guidelines for managers to ensure that wage and benefit policies achieve their intended pur¬pose. The more common goals of compensation policy include to reward employees’ past performance, to remain competitive in the labor market, to maintain salary equity among employees, to motivate employees’ future performance, to maintain the budget, to attract new employees, and to reduce unnecessary turnover. It is important for the organ...
McMullen, Stark and Jenson find in their research by understanding the employee/ reward dynamic go hand in hand by developing rewarding programs that are in line with organization vison and employees attentiveness to contribute to the organization success. (McMullen, Stark and Jenson, 2007) Reward programs provide organization to creating a competitive an advantage but it is the employees that bring the full circle. Reward programs contribute to organization success but it does have it pros and cons. Many pros develop when using reward programs such as attracting top talent, motivating employees; strive for growth, development, and retaining good
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay