Issues in Compensation Planning

Issues in Compensation Planning

Introduction

Compensation plans for employees are one of the most important functions of human resource management. Following are the issues that the organizations face, and must address to when they are making the compensation plans for their employees.

Discussion

Changes Induced by Technology

Some positions should receive greater compensation than indicated by their relative value due to market forces. These forces are largely due to situations created by the technology (Sarma, 2009).

Pressure Association

When a segment or the entire workforce is organized in trade unions, it is possible to use the bargaining power of these entities to obtain more compensation to be determined by the relative value of each position in a free labor market.

Productivity

A company cannot pay its workers more than they contribute, by their productivity. When the level of compensation begins to exceed the productivity, the company has no choice but to re-designing jobs more effectively, training new workers, automated and seek by all means to restore a climate of trust and cooperation.

Internal Policies Wages and Salaries

A common policy is to give non-union employees the same increases to the union. Some policy companies preserve their compensation levels at a higher level than the market, to prevent staff turnover and attract human resources selected. Some companies opt for the automatic granting of increases with increasing inflation (Sarma, 2009).

Government Regulations in the Workplace

In general, the trend is towards protecting the rights of workers. However, this trend has occasionally exceeded the limits of the actual capacity of some organizations. It is up to the organization to respond in a responsible, legal and effective these laws.

Incentives and Profit Sharing

The incentives and profit sharing compensation approaches are specific accomplishments that drive the plans. Establish incentives performance-based incentives and not seniority or hours has been worked. Most often, they are granted on an ...