MODEL A general model of compensation administration encompasses the creation and management of a pay system based on four basic, interrelated policy decisions: Compensation professionals work with these policy decisions according to individual corporations' needs, keeping in mind the ultimate objectives of compensation administration—efficiency, equity, and compliance. Companies develop their individual compensation strategies by placing varying degrees of emphasis on these four policy decisions.
Since, among four Ms, i. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.
Similarly the labour expects wages from the process. The other factors being human, has expectations, emotions, ambitions and egos. Therefore a fair compensation system is a must for every business organization.
The fair compensation system will help in the following: An ideal compensation system will have positive impact on the efficiency and results produced by employees.
It will encourage the employees to perform better and achieve the standards fixed. It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system. The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
It should be easy to implement, should not result in exploitation of workers. It will raise the morale, efficiency and cooperation among the workers.
It, being just and fair would provide satisfaction to the workers. Such system would help management in complying with the various labor acts. Such system should also solve disputes between the employee union and management.
The system should follow the management principle of equal pay. It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
It aims at creating a healthy competition among them and encourages employees to work hard and efficiently. The system provides growth and advancement opportunities to the deserving employees. The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover.
The organization enjoys the stability.
The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce. The success and stability of organization is measured with pay-package it provides to its employees.Thus, a fair compensation system is created in every organization on order to make the most of most important ‘M’ element.
Compensation attributes to all forms of pay and rewards received by employees for their performance, including all forms of benefits, perks, services and cash rewards. Compensation administration is a segment of management or human resource management focusing on planning, organizing, and controlling the direct and indirect payments employees receive for the work they perform.
Compensation includes direct forms such as base, merit, and incentive pay and indirect. What are the advantages of a fair compensation system? Topics: Employment, Maslow's hierarchy of needs, Salary Pages: 5 ( words) Published: April 16, IntroductionCompensation is an essential and universal component of the management process of every organization.
Most organizations want to fulfill their mission, achieve their. The White House is stripping enforcement power from the Consumer Financial Protection Bureau’s Office of Fair Lending and Equal Opportunity, which has been the chief driver of discrimination lawsuits in the auto finance space..
Employees in the fair lending unit have been moved into the office of the director, will no longer have enforcement capabilities, and will be focused on “advocacy. This is a comprehensive how-to guide to designing and implementing a fair and effective forced ranking system, including how to accurately categorise A, B and C .
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