Compensation
Compensation
Todays competitive and ever-changing business landscape and conditions, it has become increasingly challenging for employers to acquire and retain experiences and productive talent.
New workers need a different compensation mix from the one that suited their seniors. Highly paid workers wish to put their pay in retirement funds to defer taxes while the younger ones may have high cash needs to support a family, buy a house or to finance their education.
Compensations can be separated
into 3 elements,namely direct monetary rewards, indirect monetary payments (i.e. benefits) and psychological satisfactions or psychic income.
The foundation of any HR strategies or programs will certainly be that it needs to support the organizational goals and culture. For example, if a company starts off its pay program design by asking employees why they leave, then building a pay structure around the reasons, it is in effect letting employees drive the pay program which then drives the business strategy.
As organizations operate in an environment legislated by the different governments, they are subjected to its laws. Thus compensation strategies and levels are impacted at the same time.
Because governments are major stakeholders in determining compensation, lobbying to
The labour supply and demand of particular skill-sets that organizations need has an impact on compensation. For example, if the supply of technical workers has trailed its demand, compensation will significantly increase as firms compete with each other for talents, driving rates upwards.
However in reality,