Benefits & Compensation in Small Businesses

This paper is based on the benefits and compensation in small businesses as this is one of the important factors the small businesses have to consider and likewise have to struggle to compete for top quality employees with big businesses. It is very important for any business to hire good and hardworking employees and for this; they have to plan out proper strategies. Moreover, it is not just important to hire diligent employees but the business also has to make strategies as to how to retain them especially in the case of the small businesses because the competition is very high and it is essential for them to retain them.

Organizational culture The culture followed by an organization highlights its personality. Culture basically comprises of the assumptions, the values and norms the business has, its financial position and about its members and their behaviors. Whenever a new member is added to an organization, they don’t take much time to study and learn about the type of culture being followed, however every company has its different culture and although new employees may take time to adjust but they soon get to know about it and work accordingly.

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There are always some things that are quite obvious for others to understand what type of culture a business has adopted. The way the interior of an organization such as the setting and the furniture being used, what the people working in an organization wear and how and what they talk about tells about the culture of an organization. This is one of the factor that is considered as important by the employees and so the business must set a kind of culture that is easy and favorable for the employees to adjust and is basically the task of the HR department to make the employees feel comfortable.

Can HR system make a difference to the creation of such culture? The human resources are required by all the organizations in order to compete in the extremely aggressive world today. This reason defines the purpose of the HR system extremely necessary, increases efficiency and also enables the company to achieve a competitive advantage over its competitors. HR also helps to identify how and in what ways an individual attributes to affect is organizational effectiveness. The key purpose of HR strategy is to guide the process by which organizations develop and position organizational and human capital to augment their competitiveness.

Nowadays, HR is used as a model that reflects an era of strategic management. It emphasizes on the knowledge-based competition. Therefore, these systems are designed in a way to develop and support ideas of intellectual capital and knowledge management that propel strategy formation. (Pynes, 2004). Problematic areas of Human Resource development activities One of the major problems being faced by the HR department is because of the diversified workforce at an organization. Many people feel uncomfortable to working with people of a different age, sex, or culture.

Despite the fact that employing people from different groups is good but it can lead to a clot of conflicts. The management has to manage a diversified workforce effectively or it can effect employee satisfaction and productivity negatively and the employees who recognize themselves as valued members of their organization are more diligent, concerned, and innovative and this tends them to work harder. Another problem can be the economic unrest prevailing. People from diversified groups would be having different definition of ambition.

The outcome of ambition is mostly unpredictable, some ambitions begun in selflessness end in rancor; others begun in selfishness end in large-heartedness. It can at times be uncontrollable as well and some people may not be able handle ambition serving it as a grief to others. It also leads to jealousy. Other than that, people might opt any way to achieve their goals and these might be unlawful as well. (Evans, 2003). Role and function of HR department To define human resources in the simplest words we can say that they are the “resources for humans” within the workplace.

The task of the HR department is to meet the needs of the employees and it also serves as a connection between all the people who are involved. The HR system of an organization comes into existence depending on the company size. The Human Resource Department can be formed just by appointing Personnel who can manage a small workforce, In case of a small company but in the case where a larger, complex organization is concerned that employs hundreds of people with many departments and divisions, the task becomes more demanding. Employee Compensation Benefits

This includes the remuneration and bonuses such as paid leaves, sick leaves and insurance policies, etc and it is Human Resources Department that is in charge to develop and to manage the benefits compensation system for the staff that serves as an inducement to guarantee the recruitment. Their goal does not just finish after recruitment but they also have to work on retaining employees and make them continue working for the company. After recruiting an employee, the Benefits Coordinator of the business must meet the selected candidates one-on-one or in small group settings and explain their benefits package.

(Brockbank & Ulrich, 2005). Employee Relations These might include age and gender, race discrimination, etc. and it is mandatory for the HR Department to make sure a fair treatment of employees. Employees should know that they are safe and they can approach someone in case they are unfairly treated by anyone. The HR Department acts as an negotiator and works to establish cooperation between the legal entities, regulatory agencies, supervisors and employees to properly tackle and determine the issue is persisting.

Policy Formulation Every company whatever its size is has a set of rules and policies. This is essential so that proper regulation can be maintained at the work place. These policies also help the managers to hire individuals and evaluate the performance of an employee currently working for the firm. Maslow’s model Abraham Maslow was the one who proposed the hierarchy of needs model. The model consisted of the five basic needs that every employee requires from the organization in order to sustain well.

The most imperative need is the physiological need of an employee that includes the basic needs without which he cannot survive such as food, water, clothing and shelter. Next comes the safety needs of an employee, that are also essential to make him perform well in an organization and this is followed by the need of belongingness. As man is a social animal, he always needs family and friends, etc. Third is the self-esteem needs that can be explained by admiration as a person always needs recognition from others for encouragement.

The last is the need of self-actualization i. e. enhancing ones capabilities. However, some factors also put restrictions to this model and one of them is the differences in thinking levels of the employees belonging to different cultural backgrounds. Rewards and Benefits Rewards and benefits are major set of HRM activities. The business should provide their employees rewards and benefits like pay, fringe, etc. The most common rewards they can give to the employees are worker’s compensation, social security and unemployment insurance.

By focusing the employee’s performance it provides benefits to its employees, which are considered by the staff members, executives and managers of the company. Conclusion The leaders are the ones who should encourage their juniors to suggest ideas that could lead to creativity and innovation. The employees should be rewarded, supported and proper amalgamation should be provided for the processes. Fund learning should be encouraged. This can be done by prioritizing it into budgets and work plans and to make it accessible to the employees or it would be of no use.

Trust and respect should be placed on all the levels of the organization. Free communication and personalization should be allowed. Constant training or at least monthly or yearly training programs should be held for all the staff to keep on learning new things. The return on investment should be taken care of. The employees should know how much they are contributing to the company. These are some more factors that could help UN to retain their current employees. (Anderson & Anderson, n. d. ). Reference Anderson, D. & Anderson, L. (n. d. ). A.

Awake at the Wheel: Moving beyond Change Management to Conscious Change Leadership. March 9th, 2009. Retrieved from: http://www. changeleadersroadmap. com/freeresources/P1D. 7. 17. aspx Brockbank, W. & Ulrich, D. (2005). The HR Value Proposition. Boston: Harvard Business School Press. Evans, C. (2003). Managing for Knowledge - HR's Strategic Role. 1st Edn. Butterworth- Heinemann. Pynes, J. E. (2004). Human Resources Management for Public and Nonprofit Organizations. (Jossey Bass Nonprofit & Public Management Series). 2nd Edn. Jossey-Bass.

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