HOW COMPENSATION AND BENEFITS EFFECT ON HUMAN RESOURSE MANAGEMENT

 

HOW COMPENSATION AND BENEFITS EFFECT ON HUMAN RESOURSE MANAGEMENT

Introduction
Companies are facing more challenges than ever before, partly in response to a rapidly changing economy and increased market competition. Organizational flexibility is a critical success factor, as highlighted in the current global pandemic (Covid-19). Furthermore, good governance and effective management will help organizations to overcome some of these challenges. Because human capital is so important in every firm, implementing an effective compensation and benefits (C&B) strategy is important (Bhattacharyya 2009).




Compensation refers to the monetary remuneration that employees receive in exchange for their labor, which can take various forms such as fixed or variable salaries, whereas benefits refer to the value provided to employees in addition to compensation. With employee engagement becoming increasingly essential, firms must consider non-monetary incentives that must be implemented in addition to compensation or benefits Chandra (2012).

Compensation and benefits are important aspects of an employee's workplace satisfaction because they have a direct impact on an employee's performance and motivation to work. As a result, it is critical for an HR department to ensure that the compensation and benefits offered to their employees are appealing enough to keep morale high. This ensures that employees understand that the company values them and appreciates the work they do. Humans are, after all, a company's most valuable asset Bhattacharyya (2009).

Ways of HRM Deal with Compensation and Benefits

Hiring and retaining the most competent and talented employees is a top priority for any organization's human resource (HR) department. Offering a compensation package that employees find difficult to refuse is one of the most important methods in an HR professional's arsenal for attracting top talent.

  • Allure suitable staff
  • Assure that rewards and salary costs handle changes in market rates or organizational change
  • Motivate and retain employees
  • Manage pay structures to mirror inflationary effects
  • Maintain compensation levels and differentials under review and control salary or wage costs.
  • Develop reward structures that are equitable with logical and fair pay relationships between differently valued jobs

Conclusion

To help companies grow greatly in the future, every company must incorporate 'compensation and benefits' into their policies. The organization's best talent is constantly on the verge of being attracted by other companies' attractive compensation packages and other benefits. In that case, engaging them through Compensation and Benefits can be an excellent choice! It will also benefit businesses in terms of faster growth and development.


References

•BHATTACHARYYA DK. Compensation management. Second edition. New Delhi, India: Oxford University Press; 2015. 445 p. (Oxford higher education).

•CHANDRA PB, PRABIR P. Compensation management: a theoretical preview. Trans Asian Journal of Marketing and Management Research [Internet]. 2012;1. Available from: https://www.researchgate.net/publication/259786503_Compensation_Management_A_t heoretical_preview

•https://www.startuphrtoolkit.com/compensation-and-benefits-in-hrm/#:~:text=Compensation%20and%20Benefits%20in%20HRM%20refer%20to%20the%20salary%2C%20monetary,the%20employees%20in%20their%20work.

•https://www.aihr.com/blog/compensation-and-benefits/

•https://degree.pittstate.edu/online-programs/mba/human-resources/hrs-role-in-compensation-and-benefits/

•https://www.youtube.com/watch?v=579DvIy4hq0

•https://www.google.com/search?q=compensation+and+benefits&rlz=1C1GCEC_enLK939LK939&sxsrf=ALiCzsaa-4S3HJaHopeqe2wfGYjBRuznsQ


Comments

  1. Dilini MBAMay 5, 2022 at 7:23 AM

    As discussed, employee benefits and recognition is a very important role of HR managers. When employees are rewarded, recognised and appreciated, it will increase their morale and engagement levels. This will in turn increase productivity. When employees are happy they are more committed which will reduce absenteeism and turnover levels.

    ReplyDelete
  2. Pasan NanayakkaraMay 6, 2022 at 9:56 AM

    Providing proper compensation and benefits to employees is essential in retaining and recruiting talented and employees to an organization and HRM is key in managing the company HR policies. This is a great article that shows the importance of compensation and benefits as well as how HR department manages such policies. Well done.

    ReplyDelete

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