discuss the determinants of compensation and rewards

Reward and Compensation as a Determinant of Employee Commitment: A Survey of Ktda Tea Factories in Kenya. /Type /Font /MissingWidth 250 supplementary compensation in the form of fringe benefits. << /StemV 82 The industry has proved to be one of the most valuable in Nigeria economy and the productivity of the industry cannot be refrained from its rewards and compensation structure, directly or indirectly. >> Higher wages have to be paid by the firm to its workers under the pressure of the trade unions. /FontDescriptor 9 0 R Many external environmental factors impact an organization, but only a few have a direct effect on an organization’s reward system. (Medical insurance, company car etc.) Reward structure for the most part comprises of pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and team reward. 13 0 obj To attract more talent, check out what candidates want in today’s job market. This article reports on the extent to which a limited number of determinants of In practice, a lot of lip service is given to the value a good job performance, but the organizations rewards do not closely parallel employee performance. A well-designed job evaluation program helps to determine an appropriate compensation system. /Encoding /WinAnsiEncoding Define Compensation and Reward System and related terms Describe Fair and Non-discriminatory Compensation Discuss Unfair Compensation Explain the relationship between income, remuneration and pay Discuss financial and no-financial returns as forms of pay]] /Subtype /TrueType /CapHeight 638 Salary and incentive packages are one of the main reasons why people apply for specific jobs. 500 500 500 500 333 389 278 500 500 722 500 500 444 0 0 0 World at Work, 2009. Reward management intends to make and proficiently work a reward structure for an organisation. Compensation is the monetary benefit which is given to an employee or worker giving their services to an organization. /FontName /Cambria /BaseFont /ArialMT Odisha State Open University Page 2 1.1 Introduction If the abilities of employees have been developed to the point where they meet or exceed … Compensation is a tool used by management for a variety of /Descent -216 0 0 0 488 0 441 0 488 0 494 0 278 0 0 0 832 /Leading 150 << describe the various forms of compensation and explain the concept of equity in financial compensation. Tax implication also influences employees. /LastChar 32 A union is a power and it affects compensation. /Descent -212 %PDF-1.4 Union pressure depends on the high rate of compensation through collective bargaining, negotiated pay settlements serve as the basis for compensation. Consequently, HR professionals who work in this area need to be numerate, commercially aware and have a detailed knowledge of financial laws and regulations. STEP 5: PESTEL/ PEST Analysis of The Role Of Compensation And Rewards In Modern Organization Case Solution: Pest analyses is a widely used tool to analyze the Political, Economic, Socio-cultural, Technological, Environmental and legal situations which can provide great and new opportunities to the company as well as these factors can also threat the company, to be dangerous in future. The organization enjoys the stability. The term compensation is used to indicate the employee’s gross earnings in the form of financial rewards and benefits. You will be surprised at the benefits your company will reap when you reward good performance with job assignments, recognition, growth and learning, additional responsibility, trust, authority, and autonomy. The determinants of executive compensation An optimal mix in fixed and variable executive rewards for listed companies in the Netherlands Master Thesis Financial Management Faculty of Economics and Business Administration Tilburg University R.B.M. /Leading 150 The compensation and reward management plays a vital role in achieving human resource management objectives. Organisations reward their staff when they attain the goals or targets that they have jointly set with the employees. Government law and regulation affect compensation management and policies. 3 0 obj On the contrary, benefits entails the non-monetary rewards offered to an employee as a part of their salary package for his/her contribution to … >> 0 0 568 0 0 0 0 0 0 0 0 0 0 0 0 0 (1999) rewards refer to all form of financial returns and tangible services and benefits and employee receives as part of an employment relationship. /StemH 77 • Employee’s Relative Worth – Rewarding individual employee performance /ItalicAngle 0 Previous Article. /LastChar 115 /Descent -222 Factors affecting compensation A) External Environmental Variables. Wage rates will be different in a stable economy than in a depressed economy. /FontName /TimesNewRomanPS-BoldMT /StemH 77 Many external environmental factors impact an organization, but only a few have a direct effect on an organization’s reward system. /Type /FontDescriptor /FirstChar 32 Factors affecting wages or compensation or determinants of wages or compensation: 1) Productivity of workers: to get the best results from the employees and to increase the productivity compensation has to be productivity based. 0 0 0 0 333 444 444 0 500 1000]>> Other than that, WorldatWork (2007), the total rewards association depicts total rewards into five elements that are compensation, benefit, work-life, performance and recognition, and development and career /Creator (PDF-XChange Office Addin) The compensation and rewards as received by employee is proportional to the effort exerted by them. This way it can attract a superior caliber of personnel. 0 0 0 722 667 667 722 611 556 722 722 333 389 0 611 889 /CreationDate (D:20111024143127+05'00') 558 531 0 0 414 430]>> /FontName /Calibri Initial reading is to get a rough idea of what information is provided for the analyses. endobj /Length 10457 /FontBBox [-665 -325 2000 1006] /Encoding /WinAnsiEncoding Expert Answer The answer to Q 1: Determinants of Direct Financial Compensation: Direct Financial compensation includes hourly and monthly rated wages or salaries, and Incentives. /CapHeight 662 12 0 obj Companies use compensation to reward and boost the morale of high-performing employees, but also to motivate underachievers. There should be equality between the employees otherwise, they will be demotivated. Compensation means the basic returns that an employee obtains from his/her work. /MaxWidth 2919 5. /Type /Font Mendonca, (2002) sees reward and compensation system that is based on the expectancy theory, which suggests that employees are more likely to be motivated to perform when they perceive there is a strong linkbetween their performance and the reward they receive. /StemV 85 The study used descriptive research design. Expatriate Compensation: A Total Reward Perspective. /Widths [ 278]>> Matching for the market rate is a major consideration. Legal considerations can be taken as an important determinant of compensation. turnover, retention, rewards, compensation, talent at UNIV OF MEMPHIS on October 13, 2014 cbr.sagepub.com Downloaded from 172 Compensation & Benefits Review 45(3) 1.3 The structure of the thesis This thesis includes five chapters of which the first chapter has been already presented. /FontDescriptor 13 0 R Compensation is a discretionary concept whose determinants may not necessarily be the same in all organisations. Determination of compensation is reasonably viewed in terms of equity. They work for all the members of the interest of their class.Generally, compensation is determined to balance the pressure of union and organization abilities. I. Franken August, 2010 … /StemH 85 10 0 obj 1 H. M. Douty, The Wage Bargain and the Labor Market (Baltimore: John Hopkins, 1980).. 2 World at Work, Fiscal Management of Compensation Programs: A Survey of Member of World at Work, Scottsdale, AZ.World at Work, August 2005 and World at Work and Hay Group, Rewards Next Practices Survey Scottsdale, AZ. we will discuss various research works done on the determinants of CEO compensation, the controversies in their results, argue on the importance of intrinsic rewards along the monetary rewards … endobj /Type /FontDescriptor Our cloud based SaaS solutions combine best of breed features with an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees. /Widths [ 250 0 0 0 0 0 0 0 333 333 0 0 250 333 /LastChar 32 << Compensation includes components like salary, wages, bonuses etc. /MissingWidth 278 Often the labour unions also demand an increase in compensation on the grounds that the organisation is prosperous and is able to pay more. B)Discuss the difference between base pay and pay for performance. /AvgWidth 401 There are a number of internal and external factors that affect compensation  which are: Objectives of compensation may be controlling cost, establishing fair and equitable pay structure, attracting and retaining competent human resources, improving motivation and morale, improving labor relation, improving the image of an organization and comply with the legal framework and policies of the organization. presented and analysed in depth, the reasons how reward practices can impact employee motivation were found. << /Type /FontDescriptor Reward, which is at times been described as compensation or remuneration, is possibly the most critical contract term in each paid-work. /Type /FontDescriptor When developing and designing a compensation system, organizations must take into consideration the external environment in which they do business. Alice Chepkorir Milgo, Gregory Namusonge, Christopher Kanali, Elizabeth Nambuswa Makokha. The organization should compensate the employee at least to meet the cost of living. /Subtype /TrueType There are many factors that affect the levels of pay and this article discusses some of them. /Leading 150 Determinants of compensation INTERNAL DETERMINANTS • Employer’s Compensation Strategy – Setting organization compensation policy to lead, lag, or match competitors’ pay. This is one of the most significant factor influencing employee compensation. 4) Labor union: labor union also helps in paying better wages to the workers. Compensation: Meaning, System and Objectives of Compensation! /CapHeight 716 /MissingWidth 250 Key Words: Salary, Rewards, Indirect Compensation and Employee Performance 1. /FirstChar 32 /Type /Font endobj /Type /FontDescriptor Initially, fast reading without taking notes and underlines should be done. endobj Skills in short supply carry the high rate of compensation. Compensation policy is the policy made by the organization.They serve as guidelines for formulating compensation. 15 0 obj The Pros and Cons of Behavioral Interviewing. Compensation Transparency China Gorman. It should be fair within the same organization of similar jobs. /CapHeight 662 /Type /Font 0 722 556 722 667 556 611 722 722 944 0 722 0 0 0 0 /Ascent 952 556 500 556 556 444 389 333 556 500 722 500 500 444 0 0 0 Every organization offers a good compensation to attract and retain the ablest employees on the actual work floor. >> 0 0 0 444 500 444 500 444 333 500 500 278 278 500 278 778 /XHeight 447 6 0 obj Learn the pros and cons of the behavioral interviewing style. compensation, remuneration and all other benefits for the employees. The perfect compensation system provides platform for happy and satisfied workforce. << Compensation would include rewards when you offer monetary payment such as incentives, various bonuses and performance bonus. 172 Compensation & Benefits Review 45(3) … This is followed by discussions of how both the labor market and the job are factors in determining financial compensation. /Ascent 891 Compensation is used to mean the financial and non-financial reward paid to the employee for the services provided by him/her to the organization. endobj In the case study organization rewards in use are positively impacting employee motivation and the reasons why rewards are impacting motivation was explained through the use of grounded motivation and reward theories. In many organizations, employee performance relative to organizational goals serves as the basis for compensation. /Filter [/FlateDecode] Introduction Compensation is output and the benefit that employee receive in the form of pay, wages and also same rewards like monetary exchange for the employee’s to increases the Performance(Holt,1993).Compensation is the segment %���� 3.1.1 Research from the managerialist and neoclassical Traditions. /StemV 77 /MaxWidth 2000 It should account for inflationary pressures. Sound compensation/ Rewards system bring peace in the relationship of employer and employees, collective bargaining generally focus on compensation issues 4. In a study that relief on data collected by compensation consultant, however, Fisher Govindarajan tested a model of business unit GM pay. Introduction Compensation is output and the benefit that employee receive in the form of pay, wages and also same rewards like monetary exchange for the employee’s to increases the Performance(Holt,1993).Compensation is the segment of transition between the employee and the … /Subtype /TrueType It is because if the company does not offer an attractive package of compensation, compared to other competitive firms, the efficient employees may leave the firm. This study reports on the extent to which a limited number of determinants of compensation, as identified in this study, namely job performance, external equity, job families, organisational tenure and employee /Encoding /WinAnsiEncoding Apart from that, the growth of the industry is another determinant of the level of pay. Aggregate pay can influence purchasing power. /FirstChar 32 Compensation rates should be competitive. The rate of compensation should not be determined differently on the basis of religion, gender, caste, race etc. of total reward system will help to retain the best worker and ensure the organization stay in a best positioned for future success. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Hence, the employees should be compensated adequately. 6) Demand and supply of labor: it is one of the important factors affecting wages. The compensation is concerned when the gratification that employees are getting for the work, included all forms of payment or rewards that the employees receive (Dessler, 1996), and contributing to the satisfaction, in addition this help the organization to obtain, maintain and retain a productive workforce This is true despite academic theories holding that high motivation depends on performance base rewards. This study began with an attempt to help anHR manager explain the reasons behind variations in managerial compensation to the managers in his unit (described later). This minimizes the labor turnover. Determinants of employee compensation: an exploratory study By Frans Maloa* and Mahamed Rajah** Abstract Compensation is a discretionary concept and the determinants of compensation may not necessarily be the same for all organisations. Compensation, benefits and reward careers are all about money. endobj An organization can be leader or follower regarding pay. Franken August, 2010 … /Flags 32 As well as monitoring their own company’s salary structures and benefits, these people may be required to research and analyse the salary rates of their competitors. Although the work cited earlier on the determinant of divisional reward system has been informative, little research has been done on the determinants of the actual level of GM pay. Presentation of Compensation. Financial compensation includes salary, bonus, and all the benefits and incentives, whereas non-financial compensation includes awards, rewards, citation, praise, recognition, which can motivate the employees towards highest productivity. Nature of demand and supply of various types of personnel determine compensation (wages and salaries). Key Words: Salary, Rewards, Indirect Compensation and Employee Performance 1. /AvgWidth 427 /ItalicAngle 0 Modeling executive compensation as an independent variable directs attention not only to firm performance, but also to a potentially wide set of strategic choices, organizational characteristics, and stakeholder reactions that may be responsive to executive compensation plans. COMPENSATION: AN OVERVIEW Compensation—The total of all rewards provided to employees in return for their services. Guest, (2002) is of the opinion that reward is one of the keys that motivate employees to perform as expected. /Subtype /TrueType The Determinants of Compensation Committee Membership The Determinants of Compensation Committee Membership Vafeas, Nikos 2000-10-01 00:00:00 Nikos Vafeas* This study extends the work of Kesner (1988) and Bilimoria and Piderit (1994) in examining the determinants of compensation committee composition. The Determinants of Director Compensation ABSTRACT While executive compensation has been studied extensively, relatively little is known about the compensation of outside directors. These two factors determine the compensation to be required for payment. stream 5) Cost of living: wages depends upon the cost of living if it is high wages will also hike. determinants of compensation practices in the CEE region. /LastChar 150 Job evaluation states job description and job satisfaction. << /AvgWidth 503 Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. In practice, performance is only a minor determinant of rewards. Determinants of Compensation: A Study of Pay, Performance, and Gender Differences for Fundraising Professionals Debra J. Mesch, Patrick M. Rooney This study examines the determinants of compensation for fundraising professionals by addressing the following research questions: (1) Is there a significant pay-performance relation-ship? 0 350 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Productivity determines compensation. /Author (DELL) HRsoft is the industry leader for compensation planning and total rewards software. /Producer (PDF-XChange 4.0.174.0 \(Windows Seven Ultimate Professional Service Pack 1 \(Build 7601\)\)) Contact Information . >> Having summarised some influential theories about the determinants of compensation, we begin the discussion of the background events leading to our study. One rea- son for the lack of empirical testing is that given the constraints and characteristics of the nonprofit sector, examining pay is problematic (Hallock, 2000). /FirstChar 32 Compensation and Reward Management – 2 Major Determinants: Internal and External Determinants. /FontBBox [-476 -194 1214 952] The compensation, benefits and reward schemes that these HR professionals manage are not only important for retaining and motivating employees, but also for attracting new people to the company. 4.3 The Determinants of GM Compensation. HRsoft is the industry leader for compensation planning and total rewards software. specific determinants of compensation, and secondly to be able to indicate an acceptable level of compensation (Oberholzer & Theunissen 2012). /Leading 172 A comprehensive compensation strategy can be the foundation for creating an environment that recognizes and rewards employee performance and helps to establish a strong culture of employee engagement. xڵ}]s$���;E=6�z� Organizations are only as successful as their approach to hiring the right people, setting clear expectations, managing performance, and recognizing and rewarding employees for a job well … /StemV 77 0 350 0 0 0 0 0 0 0 0 0 0 0 0 0 0 endobj A comprehensive compensation strategy can be the foundation for creating an environment that recognizes and rewards employee performance and helps to establish a strong culture of employee engagement. Our cloud based SaaS solutions combine best of breed features with an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees. /Widths [ 250 0 0 0 0 0 0 0 0 0 0 0 0 333 How a manager speaks regarding pay can inadvertently create ill will when the intention was to deliver good news. Benchmarking Compensation Trends Industry 47 . Factors affecting compensation A) External Environmental Variables. /Ascent 950 The new trend is to link pay with performance. We attempt to fill this gap by studying the determinants of outside director compensation using a dataset of over 57,000 board positions from 2006 to 2010. For many years economist have been interest in the relative importance of sales and profits in explaining compensation. Business administra- ... available and answer my questions each time I doubted or wished to discuss an issue that bothered me in one of my papers. /BaseFont /TimesNewRomanPS-BoldMT A tool that is used to foster values and culture. 0 0 885 0 0 0 0 0 0 0 0 0 0 0 0 0 1.5 Objectives of Compensation and Rewards 1.6 Methods of Compensation 1.7 Compensation Structure 1.8 Framework of a Compensation Policy 1.9 Let’s Sum-up 1.10 Key Terms 1.11 Self-Assessment Questions 1.12 Further Readings 1.13 Model Questions . /Type /Font Utilizing Monetary Compensation Growing businesses that struggle with cash flow issues and “making payroll,” will want to think creatively about how to provide monetary compensation and rewards to their management and staff. /XHeight 457 “Reward is the benefits that arise from performing a task, rendering a service or discharging a responsibility” Colin (1995). Thus, the prevailing research has been on the determinants of pay. /Widths [ 226]>> The compensation awarded to the employee is dependent on the volume of effort exerted, the nature of job and his skill. Indirect Financial Compensation—All financial rewards that are not included in direct compensation. Human resources departments face challenges in effective compensation management. Considering financial rewards alone, whether paid in cash or in shares, directors seem to have little reason to break a sweat in the boardroom. we will discuss various research works done on the determinants of CEO compensation, the controversies in their results, argue on the importance of intrinsic rewards along the monetary rewards … Determinants of compensation. 5 0 obj 0 0 0 0 333 0 0 0 500]>> endobj /FirstChar 32 /LastChar 151 3. Compensation should be adjusted according to the rise of market price rate. Compensation is far from the only factor candidates consider when applying to jobs. It is to be considered to maintain living cost through compensation. /Leading 221 Policies of an organization influence compensation. As the Director of the PhD Program, Professor Bernard Forgues provided a cru- /Descent -216 The cost of living at the average level may change. 14 0 obj Abstract. In doing so, I focus on a wide range of compensation practices included in the notion of total rewards (cf., for instance, Manas & Graham, 2003) in CEE transition states: Base pay, variable and non-monetary compensation, and share-based pay schemes. 9 0 obj /BaseFont /TimesNewRomanPSMT Therefore, the purpose of the present research is to contribute to the empirical development of the determinants of executive compensation in the context of South African SOEs. Generally, a firm, which is prosperous and successful, has the ability to pay more than the competitive rate. /XHeight 467 /Encoding /WinAnsiEncoding /Flags 32 Rewards can be non-monetary such as a paid vacation for two. /Ascent 905 Advantages of Good Compensation SystemsIt is essential that each organization create a fair reimbursement system which includes the following advantages: A reasonable compensation system will encourage the employees toward greater performance and productivityIt will motivate an average employee to achieve endowed targets in case the compensation systems promote a built-in view of rewards … Besides, there are several other internal and external factors affecting the compensation. Therefore, the compensation and rewards system you offer to employees should include both monetary and non-monetary ideas. /Widths [ 220 0 0 0 0 0 0 0 0 0 0 0 0 0 /StemV 78 Compensation management is more than providing a paycheck and cost of living increases. /FontDescriptor 7 0 R /MaxWidth 2000 Employees have the legal right to have collective bargaining. Compensation is something, most usually money, which is given to the employees of a… << Compensation System: Compensation is a tool used by management for safeguarding the existence of the company. Direct Financial Compensation—Consists of the pay that a person receives in the form of wages, salaries, bonuses, and commissions.

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