Compensation in an Organization
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Compensation in an Organization
Compensation provides employees with intrinsic and extrinsic values. Intrinsic compensation deals with the emotional part of an employee doing their job. The extrinsic compensation deals with the monetary and nonmonetary rewards. Organizations with great compensation are able to attract and retain high quality employees. It also helps an organization to distinguish itself from others. There are so many organizations out there that seem the same and are able. When an organization is able to offer great compensation, they are then able to have a competitive advantage. The compensation of an organization can have a great impact on it and can affect it.
Compensation is part of the foundation of an organization. The choices an organization makes in can make a difference in the performance and the success of the organization. This is applicable to organizations of all sizes. Ranging from the multi-billion dollar organization to even the small local mom and pop shop. It is important, no matter what the size of the organization, that they choose compensation that goes along with their budget but at the same time make it different to help attract the right candidates. According to Erra, most health care organizations want to strike a balance between cash compensation and benefits that provide protection of family income and adequate retirement benefits linked to tenure. This is applicable not just to health but across the board for all organizations. If a candidate is unable to distinguish an organization from another, then they will think that all organizations are the same. Having a competitive advantage is essential for an organization to be successful.
Great compensation within an organization can not only help make the organization successful, it can also help the employees feel like they are successful as well. Employees that feel great about their organization will speak well about their organization with their friends and family. Word of mouth is some of the best form of advertising for an organization. This can give an organization another competitive advantage. A potential employee that is looking at an organization will view that as an organization that values and is concerned with their employees success. When an employee is successful then the organization is successful.
The compensation within an organization can also be very influential on the performance of Human Resources. Human Resources has to be managed carefully. The performance of Human Resources can affect the organization as a whole. If it performs poorly, then if can affect the whole organization poorly as well. When Human Resources is running effectively, it helps bring in the high quality candidates that an organization needs and is looking for. Once those candidates have been acquired within the organization, it also makes it easier for the organization to retain the best talent.