Download to read offline
COMPENSATION strategic human resource mg
- 1. STRATEGIC HUMAN RESOURCE MANAGEMENT Strategiccompensation
- 2. What is acompensation strategy? A compensation strategy is how your organization offers pay and benefits to employees. This includes setting salary ranges, determining how raises and bonuses are calculated, and identifying which additional benefits you want to offer to your staff. An effective compensation strategy should reflect your organization's needs, the culture you want to create, and trends in the external market.
- 3. Why is acompensation strategy important? Your compensation policy can be the difference between potential employees applying to work for your organization or your competitors. It helps you compete for top talent, reduce turnover rates, boost employee performance, and more.
- 4. Let’s look ata few of the perks of having an effective compensation strategy: Attract qualified job seekers You'll attract more highly skilled workers when you offer a competitive salary range and fringe benefits. With the global labor shortage, there are more open positions than there are qualified workers to fill them. To fill your vacant positions, you need to offer a base salary and perks at or above current market rates. When you have a standout compensation program, job candidates will view you as an employer of choice.
- 5. Boost employee moraleand engagement When employees are offered the perks and salaries they want, they’ll feel valued and appreciated. When they feel taken care of, they’ll be inspired to improve their individual performance, which increases productivity and employee engagement so that the organization can meet its business goals.
- 6. Reduce turnover Whenyour employees are satisfied with their pay and the perks you provide, they’re more likely to stay with your organization instead of searching for new opportunities with your competitors. This reduces turnover and saves you time and money on hiring and recruitment efforts and training to replace employees.
- 7. What are thedifferent types of compensation strategies? While every compensation plan looks different, you need to be aware of a few popular types of compensation. Common compensation strategies include: Straight salary: Paying workers a base salary based on their role and job title. Salary and commission: Paying workers a base salary and added commission. Commission only: Generally used for independent salespeople, this involves only paying workers commissions for the sales they make. Team commissions: Similar to regular commission structures, salespeople earn commissions based on their sales. However, commissions and bonuses are based on how well the team performs as a whole.
- 8. Profit marginor revenue-based: Employers pay workers entirely with the profits generated by the organization. Profit margin compensation is common with startups. Residual commission: Employers pay workers a commission based on sales and continue to earn revenue from their accounts, even after they leave the company. This is the least common compensation method, but some organizations may offer it to top- performing workers. Dearness allowances Incentives Bonus commissions
- 9. non- financial compensationstrategies: Recognition of merit through certificates Offering challenging job opportunities Promotion growth prospects Comfortable working conditions Competent supervision Job sharing & flexi-time
- 10. Pros & Consof Strategic compensation Career development Ensure better growth Increase organizational effectiveness Ensure conflict management Help to motivate employees Enhance job satisfaction Provide better managerial experience
- 11. Legal liabilities Lack of transparency Cost bearing Improper development programs Biasness, favoritism Conflict arises
- 12.