Human Resources - Compensation Packages

Human Resources - Compensation Packages

Introduction

In today's business world, the human resource management has its own significant importance. In today's fast pace of competition, it is not that easy to attract and retain the employees and to get the desired productivity from them in order to meet the organizational objectives. Now, in today's world, the employees are considered as essential organizational assets that are required to be managed in efficient and effective way. The employees' aspects are now given significance importance and are compensated against their efforts and devotions for the success of the organizations. The human resource departments are now become more concerned for the benefits of their employees and to take care of their rights.

In order to retain, attract and motivate the potential employees, an important tool of human resource management is widely being used that is “compensation management”. The compensation management concerns designing the additional benefits, other than the salary packages, that are offered to the employees. The compensation management that is now carried out in almost all of the well established organizations has found to have the positive impacts upon their employees. Various compensation and benefits packages are developed according to the types and nature of the jobs. The human resource departments are the ones who are responsible for the developments and managements of compensation programs. The compensation packages are designed by keeping in view the organizational goals and objectives and than their effectiveness are evaluated. The effective compensations plans are developed by also keeping in view the competitor's strategies. It has been found that most of the competitors snatch the potential employees of others by offering them attractive compensation packages. Therefore, the effective compensation packages are periodically monitored and managed depending upon the external market situations and economics of the country and are compared on regular basis with that of the competitors and other organizations operating in an industry.

The term compensation is usually considered and perceived as the money that the employees receive for what they have performed their services for the assigned job. However, the compensation is more than receiving the money as their salary. The compensation is the complete package of benefits for the employees. These involve money, benefits, services and other monetary and non monetary benefits. The employers are required under the law of federal as well as of state to provide the necessary benefits to the employees so that can take advantage of it when they are required.

Discussion

The employee compensation packages are designed to attract the new applicant as well the existing employees and to motivate and to retain the existing human resources. Therefore, it is necessary for the organization to communicate the compensation programs and policies clearly and fairly to the employees. It is the matter of fact that employees are concerned to know that what benefits they are being provided both in terms of monetary compensation and benefits and in terms of performance based compensations.

According to McNamara, ...