The Importance of a Compensation Package
One of the most important Human Resource Management functions deals with compensation and the total pay package for employees. The total pay package has a direct impact on the successful recruitment, selection and the retention of staff within any organization. This pay package is critical for any business to remain competitive in today’s business world. Competitive compensation packages are vital to both large and small organizations as they encourage the retention of talented staff.
Components of a compensation package
A compensation package includes salary but also includes other non-salary benefits such as: health-care benefits, 401(k) plans, PTO (paid time off) and other perks. Businesses often utilize experienced Human Resources prof...
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...income every year that we 're retired. A 401k retirement plan has tax advantages for the employer and the employee, including tax-deductible advantages for the employer and tax deferred growth for the employee” (Heathfield, 2015, pg. 2).
A well planned compensation plans take into consideration what 's necessary for businesses to maintain a competitive edge but also be able to sustain that growth in the future. Compensation, along with a good balance of benefits and recognition programs can help to attract and offer the ability to retain top talent. Businesses that offer quality HRM programs to staff may have an easier time recruiting and retaining staff that directly impact a business’s bottom line. When a business does well by its employees, its employees will feel more engaged and work to ensure the daily operations help the business succeed.
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