Compensation: Employment and Internal Alignment

1. Define wages and discuss the variety of returns tribe ingestd from their exit? (8 marks) Compensation refers to whole(prenominal) forms of financial return and tangible services and benefits employees receive as go against of manipulation relationship. some early(a) than that compensation meat something that counterbalance, offsets, or makes up for something else. so far in the unalike language the compensation itself have richness of meaning, which combines entitlement, returns and reward.Compensations argon related with the employee and the employer performances, it content by employee performance of their inclines and the employer as the administration performance. Compensation need to be consider in all vista especially in internal or external factor much(prenominal) as technology advancement, human capital, economic, government and others because it may affect the organizations itself. Other than that, the benefit of compensation toward the employees is it m ay ontogeny the employee morale and its similarly a way to attract and retain employees.The variety of returns people receive from their work that argon categorized as total compensation and relative returns. The total compensations be transactional and the relational returns are psychological. totality compensation go off be divided into two. First is cash compensation that means by they include suffer directly as cash such as base, merit/cost of living, short term incentives and long term incentives. That commonly employer requitals for the work performed based on their result in performance appraisal.Second is indirectly as benefits such as income protection, work/life balance, and allowance. That is non-monetary benefits for the employees, for employment all female employees are entitled for maternity allowance, transportations allowance, EPF or SOCSO and others. The relational returns are compound learning opportunities, status, challenging work and so on. By means the compensation is intangible. For example for recognition and status, as human being ordinarily people are loved to be respect by the others because that is a human nature.The increase of status means position of the employee may rectify their morale and individual self-esteem. It as well may influence other people to compete and improve their performance and gain the competitive advantages. 2. Pay trunk are designed to achieve certain target, list and briefly describes the trinity compensation objective? (10 marks) i. Efficiency ? Performance ? Quality ? Customer and shareowner ? Cost ii. Fairness iii. Compliance iv. Ethics EfficiencyCan be stated more(prenominal) specifi chit-chaty first in improving performance, increasing quality, delighting customers and stakeholder and second is imperative weary cost. It also means by the succumb of the employees are equivalent with the employee performance. When the employees are satisfied with their retribution it will impr ove the quality of work indirectly will also increase the product quality. When the employees savours satisfied with their stomachment it will make the organization stable and it will help for the customer and stockholder loyalty ( profound image of organization).The organization also my control labor cost because they are able to attract and retain their employees. Fairness It is call as a fair treatment for all of the employees by recognizing two employees contributions for example high hire for greater performance, exist, or training and employees needs for example fair wage as fair procedures. The procedural fairness is refer to the process employ to make stipend decisions. It suggested the way a pay decision is do be tingely as grandeur to employees as the result of decisions.For example, the CEO position are received the higher pay in organization it is because the decision that been made may clear a big violation towards the organization rather than the decisi on that had been made by the operator that may give a little impact only in department. Compliance As a pay objective means conforming to federal and state compensation law and regulations. If laws change, pay system may need to change, too to ensure continued compliance. As compliance go orbicular, they mustiness comply with the laws of all the countries in which they operates.It means by, even they are same position but in different country, the employees cannot have the same pay. It is because every country has own currency. So, it is not desirable to use the same compensation system in different country, it also may cause dissatisfaction among employees. 3. Discuss quad perspective of compensation? (12marks) i. nine Some people canvass pay as measure of justice. For example the comparison of earning mingled with men and women highlights what many consider inequities in pay decisions. Benefits given as part of total compensation package may also be seen as a reflection o f equity or justice in society.The society also may see that involved job losses or job gain in a country over time. It means by the compensation may increase the employee morale (job gain) or decrease employee morale (job losses) because of dissatisfaction. Some consumers know that pay increase often lead to price increases. Its because the employer need to pay the employees by using their profits. ii. Stockholders They are also interested in how employees are paid. Some believe that using stock to pay employees creates sense of willpower that will improve performance, which will, in turn, increase stockholder wealth.It is because, the employee will feel more responsible as they feels that the organization as their own. iii. Managers For manager, compensation influences their victor in two ways. First it is major(ip) expense. Competitive pressures, both global and local, force manager to consider the affordability of their compensation decision. Other than that, managers also use d it to influences employees behavior and improve the organization performance because they have an authority to assess the employees performance that relate to the compensations and benefits. v. Employees The pay individuals receive in return for the work they perform is usually the major source of their financial security. Employees may see compensation as a return in an exchange between their employer and themselves, as an entitlement for being an employee of the order, or as a reward for a job well done. The employees see pay as the important things in their live because it determines the standard of living and the money that they need to plan for their future. 4. Elaborates four steps in developing a compensation strategy? 12 marks) i. Assets Total Compensation Implications Think about any organizations past, present, and its future. What factors in its parentage environment have contributed the companys success? Which factor that arrive more or less likely important as co mpany looks ahead? The company classifies the factors as business strategy and competitive dynamic, HR strategy, culture/values, social and political context, employee/union needs and others HR system. Which is the employer itself must have clear understanding about their business. i. Map a Total Compensation Strategy Mapping is often used in market to clarify and communicate a products identity. A strategic map offers a picture of company compensation strategy. It can also clarify the kernel that the company is trying to deliver with its compensation system. The comparison with competitors using the plat based on element on pay model such as, objective, internal continuative, external competitiveness, employee contributions and management. iii. Implement strategyInvolve implementing strategy through the design and action of compensation system. Where implement the system that had been created. iv. Reassess Reassess and realign, closes the loop and choose that the strategy must be changing to fit the changing conditions. and then the periodic reassess is needs to continuously learn, adapt, and improve. The result from using the system need to be assessed against objectives we are trying to achieve. 5. Define an internal continuative and briefly discuss any four factors which shape internal alignment? (10 marks)Internal alignment can be define as internal equity, refers to the pay relationships among different jobs/ skills/ competencies within a single organization. It also means by how to structure the position in organizations. For example, if a person holding degree, he will be measure under competencies, which is he has a good qualification than others. Factors which shape internal alignment - i. Government policies, laws and regulations. The gibe employment legislations forbids pay system that discriminate on the basis of gender, race, religion or national origin.The equal pay for equal work with considers under equal if it is equal skills, equal e ffort and equal responsibility and is performed under equal working conditions. ii. Organization strategy It may influence the internal alignment. The flavor is that pay structure that are not aligned with organization strategy may become obstacles to the organization success. iii. Organization human beings Capital Human capitals are based on education, experience, knowledge, abilities and skills require performing the work. It is a major influence in internal alignment.The greater the values added by the skills and experience the more pay those skills will command. iv. Overall HR policies The organization other human resource policies also may influence internal pay structures. Most organizations tie money to promotions to induce the employees to apply for higher-level position. If organization has more levels, it can offer more promotions, but there may be smaller pay differences between levels. The belief is that more frequent promotions (even without important pay increase) o ffer sense of career progress to employees. pic