Last Updated 27 Jul 2020

Compensation and reward management

Category management
Essay type Research
Words 374 (1 pages)
Views 187

Compensation and reward management

The reward system of the company is believed by the human resources (HR) field as pivotal in the motivation, attraction, and retention of HR that are so vital to the successful attainment of a firm’s goals (Burke and Cooper, 2004). The company’s reward principles should differ accordingly, based on the desired managerial behaviors necessary to implement the strategy of the particular business unit. Data gathered from different organizations reveals that different compensation strategies are being employed for the respective company’s departments (Sims, 2002). Professional employees’ compensation, for instance, is harder to allocate, as their professions are constantly evolving fields of knowledge, and they require receiving compensation far beyond the base pay most ordinary workers receive.

Sales professionals, on the other hand, also have a unique compensation package being offered to them, as the nature of their job (selling), calls for incentive payments tied to their individual performances in the field. They often have a base salary pay apart from the commission pay that they receive depending on the sales that they made for a particular period. Many of the current reward practices being observed in the company are similar to initiatives used ten years ago in the domestic market, and although they are still sufficient to cover the basic need of the employees to be rewarded, the changing times have brought with it factors that ten years ago were not present and therefore not included in the design of the system. It has also been suggested in existing reward management literature that a number of culture-oriented psychological factors, such as national value orientations, distributional justice, the concept of socially healthy pay, and the role of pay as a motivator, should be considered (Briscoe and Schuler, 2004). The necessity for the reward strategy of the organization to be congruent with business objectives and the consequent movement towards greater flexibility and variability are considered together with the important and growing concept of broad-banded basic pay systems.

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Briscoe, D. & Schuler, R. (2004). International Human Resource Management: Policies & Practices for the Global Enterprise. New York: Routledge.

Burke, R. & Cooper, C. (2004). Reinventing Human Resources Management: Challenges and New Directions. New York: Routledge.

Sims, R. (2002). Organizational Success through Effective Human Resources Management. Westport, Connecticut: Quorum Books.


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