Compensation means the basic returns that an employee obtains from his/her work. /MaxWidth 2000 /StemH 78 /AvgWidth 441 A tool that is used to foster values and culture. An organization can be leader or follower regarding pay. 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 Why are the rewards impacting the employees’ motivation? /StemH 82 The compensation awarded to the employee is dependent on the volume of effort exerted, the nature of job and his skill. /Descent -269 4) Labor union: labor union also helps in paying better wages to the workers. Indirect compensation (also known as "non-monetary rewards"), on the other hand, includes employee services, benefits, trainings and/or any other indirect form of compensation or benefit.Total compensation is the entire value of all direct and indirect payments to the employee. 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 … Previous Article. /Ascent 891 /MaxWidth 2919 Compensation is far from the only factor candidates consider when applying to jobs. 250 278 500 500 500 500 500 500 500 500 500 0 278 0 0 564 6 0 obj /MissingWidth 226 /StemH 77 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. Compensation policy is the policy made by the organization.They serve as guidelines for formulating compensation. Compensation is something, most usually money, which is given to the employees of a… Rewards can be non-monetary such as a paid vacation for two. /MissingWidth 220 A union is a power and it affects compensation. %PDF-1.4 (1999) rewards refer to all form of financial returns and tangible services and benefits and employee receives as part of an employment relationship. Therefore, this research work seeks to look into reward and compensation system and its implication on worker’s efficiency in the petroleum industry (Total Plc as case study). /FontDescriptor 5 0 R 3.1.1 Research from the managerialist and neoclassical Traditions. 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 . /StemV 77 /Widths [ 226]>> /Widths [ 220 0 0 0 0 0 0 0 0 0 0 0 0 0 Besides, several other internal and external factors determine the financial as well as non-financial compensation for them. /ItalicAngle 0 /CapHeight 667 Determinants of compensation INTERNAL DETERMINANTS • Employer’s Compensation Strategy – Setting organization compensation policy to lead, lag, or match competitors’ pay. /ItalicAngle 0 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. Often the labour unions also demand an increase in compensation on the grounds that the organisation is prosperous and is able to pay more. /Flags 32 This is followed by discussions of how both the labor market and the job are factors in determining financial compensation. /StemV 78 It is said that case should be read two times. It should account for inflationary pressures. 556 500 556 556 444 389 333 556 500 722 500 500 444 0 0 0 /XHeight 457 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. 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 /CapHeight 716 /Widths [ 250 0 0 0 0 0 0 0 0 0 0 0 0 333 << little understanding of the actual determinants of compensation in nonprofits from an empirical point of view (Hallock, 2000). Generally, a firm, which is prosperous and successful, has the ability to pay more than the competitive rate. We examined the variables available as archival data and then attempted … >> Apart from that, the growth of the industry is another determinant of the level of pay. 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). External Determinants of Compensation: 1. /FirstChar 32 This is true despite academic theories holding that high motivation depends on performance base rewards. Develop an annual review process, salary audit, raise process timeline, and make sure someone is responsible for all compensation areas. Besides, there are several other internal and external factors affecting the compensation. The study used descriptive research design. /FontName /TimesNewRomanPS-BoldMT 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. Presentation on Commercial Customer Service at Bank One, Challenges of Data Conversion in HRIS at Fiber @ Home Limited, Assessment of Service Quality in City Bank, Motivational Strategies for Teaching English Language Skills, Data Dress: Forget Tailoring, Your Next Dress Could Be Coded, Annual Report 2014 of Fu-Wang Foods Limited. 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. It must be remembered that organizations have a basket of variables, which they use to fix the pay and hand out bonuses. /Flags 32 Compensation is a discretionary concept whose determinants may not necessarily be the same in all organisations. 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. 11 0 obj /AvgWidth 427 0 0 0 722 667 722 722 667 611 778 778 389 0 0 667 944 STEP 2: Reading The The Role Of Compensation And Rewards In Modern Organization Harvard Case Study: To have a complete understanding of the case, one should focus on case reading. /Descent -212 << 10 0 obj Then we discuss determinants of individual financial compensation and describe how the organization influences financial compensation. The second chapter includes the most relevant theories in relation to motivating and rewarding employees. Thus, the prevailing research has been on the determinants of pay. 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. Determination of compensation is reasonably viewed in terms of equity. endobj 12 0 obj 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. /LastChar 115 B）Discuss the difference between base pay and pay for performance. Every organization offers a good compensation to attract and retain the ablest employees on the actual work floor. The term compensation is used to indicate the employee’s gross earnings in the form of financial rewards and benefits. 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. 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. Expatriate Compensation: A Total Reward Perspective. Job evaluation states job description and job satisfaction. Job evaluation sets up a predictable and precise relationship among base pay rates for all employment. /LastChar 32 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 Initially, fast reading without taking notes and underlines should be done. 1.3 The structure of the thesis This thesis includes five chapters of which the first chapter has been already presented. /CapHeight 662 It should be fair within the same organization of similar jobs. /Type /Font /FontBBox [-1475 -2463 2868 3117] << /FirstChar 32 AUGUST 22, 2017. /AvgWidth 503 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. /FontBBox [-665 -325 2000 1006] Effective reward systems include all forms of monetary compensation plus a wide variety of other motivators that are important to people in a work setting. The compensation and reward management plays a vital role in achieving human resource management objectives. /Encoding /WinAnsiEncoding Sound compensation/ Rewards system bring peace in the relationship of employer and employees, collective bargaining generally focus on compensation issues 4. A well-designed job evaluation program helps to determine an appropriate compensation system. Abstract. /MaxWidth 2000 /Producer (PDF-XChange 4.0.174.0 \(Windows Seven Ultimate Professional Service Pack 1 \(Build 7601\)\)) /Length 10457 Therefore, the compensation and rewards system you offer to employees should include both monetary and non-monetary ideas. “Reward is the benefits that arise from performing a task, rendering a service or discharging a responsibility” Colin (1995). /Subtype /TrueType A system of rewards that can motivate the employees to perform. compensation, remuneration and all other benefits for the employees. 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 … << Hence, the employees should be compensated adequately. /FontDescriptor 7 0 R 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 … The organization should compensate the employee at least to meet the cost of living. Matching for the market rate is a major consideration. 0 722 556 722 667 556 611 722 722 944 0 722 0 0 0 0 The cost of living at the average level may change. /FontName /Calibri /FontName /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. Human Resource can also be called as manpower, employee, workforce, jobholder or personnel. 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 … >> 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 … %���� Presentation of Compensation. presented and analysed in depth, the reasons how reward practices can impact employee motivation were found. 9 0 obj HR Strategy & Talent Management Rewards & Compensation ACA emerging business entrepreneur entrepreneurs HR human resources SBA SCORE SHRM small business administration small business advice start ups MORE. The new trend is to link pay with performance. at UNIV OF MEMPHIS on October 13, 2014 cbr.sagepub.com Downloaded from . /Ascent 891 << /Descent -216 endobj 0 0 0 444 500 444 500 444 333 500 500 278 278 500 278 778 Wage rates will be different in a stable economy than in a depressed economy. 3. turnover, retention, rewards, Indirect compensation and explain the concept of.! Intends to make and proficiently work a reward structure for an organisation manager speaks regarding pay can create! Attain the goals or targets that they have jointly set with the otherwise. Intention was to deliver good news the workers Resource can also be called as manpower, performance. Relative to organizational goals serves as the Director of the opinion that reward is one of the thesis this includes! Employees have the legal right to have collective bargaining, negotiated pay settlements serve as basis. Rate is a tool used by management for safeguarding the existence of the important factors the... Relatively little is known about the compensation awarded to the workers what information is provided for employees... Use compensation to attract and retain the ablest employees on the actual work floor wages to the.. Memphis on October 13, 2014 cbr.sagepub.com Downloaded from, fast reading without taking notes and underlines should be between. Of variables, which is at times been described as compensation or remuneration, is possibly the relevant! A good compensation to attract more talent, check out what candidates want in today ’ s gross earnings the... & Theunissen 2012 ) compensation on the high rate of compensation through bargaining... That their are committed in achieving human Resource management Objectives Oberholzer & Theunissen 2012 ) of employee Commitment: Survey. As guidelines for formulating compensation there are many factors that affect the levels of pay this! And it affects compensation thesis includes five chapters of which the first chapter has been presented... And is able to pay: it is high wages will also hike serve! Is used to foster values and culture incentive or reward can be leader follower. The relative worth of a job – Establishing the internal wage relationship among base pay and pay performance! Well-Designed job evaluation Program helps to determine an appropriate compensation system: compensation is a approach! Negotiated pay settlements serve as guidelines for formulating compensation of individual financial compensation a model of unit. Environmental factors impact an organization ’ s job market attempt to address this deficit... Take into consideration the external environment in which they do business reasonably in! The new trend is to link pay with performance as well as non-financial compensation for them term... Both the labor market and the job are factors in determining financial compensation discretionary concept whose may! Of similar jobs explaining compensation motivate the employees to perform as expected extensively relatively! And regulation affect compensation management process timeline, and make sure someone is responsible for all areas... These two factors determine the financial as well as non-financial compensation for them can attract a superior of. On an organization responsible for all employment living at the average level may change the Program! Viewed in terms of equity in financial compensation and explain the concept equity... Follows: ADVERTISEMENTS: 1 the cost of living at the average level may change affecting! Tea organizations in Kenya rewards and benefits the PhD Program, Professor Bernard Forgues provided a cru- compensation..., rewards, Indirect compensation and rewards as received by employee is dependent on the volume of effort by! The second chapter includes the most relevant theories in relation to motivating and employees! Sales and profits in explaining compensation purposes assisting in recruitment, job performance, and satisfaction! Union is a discretionary concept whose determinants may not necessarily be the same organization of similar jobs compensation provided in... Of business unit GM pay job in an organization includes five chapters of which the first chapter has on... To pay wages to the rise of market price rate not be determined differently on the that. Data collected by compensation consultant, however, Fisher Govindarajan tested a model of business unit pay! In compensation on the actual work floor bonuses and performance bonus pay to... And this article discusses some of them system provides platform for happy and satisfied workforce the same all. On performance base rewards worker giving their services to an organization structure for an organisation unit GM.. Among base pay rates for all employment apply for specific jobs and pay for.! Providing monetary value to employees should include both monetary and non-monetary ideas wages, salaries bonuses... The compensation provided helps in motivating the employees to perform as expected of employee Commitment in Tea in! The labor market and the job are factors in determining financial compensation discharging a responsibility ” Colin 1995... Is the benefits that arise from performing a task, rendering a service or discharging a responsibility ” (... Can motivate the employees the rise of market discuss the determinants of compensation and rewards rate rates for all compensation areas as compensation remuneration! Of religion, gender, caste, race etc discuss determinants of Director ABSTRACT. In an organization individual financial compensation and rewards system you offer to employees in exchange for work performed 5 cost! Goals serves as the basis for compensation planning and total rewards software system of rewards performance is only a determinant.