Compensating Human Resources Essay

Posted in General Society
at 2016.04.25
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Compensating employees or workers is an attempt geared towards attracting and retaining the best talent within an organization. This can simply be taken as the award being given to an employee for the services rendered to the organization. These rewards might include; salaries and wages, recognitions, awards, wellness services, bonuses or other kinds of incentives. These incentives motivate a person to behave in a particular desired direction in sync with the vision of the organization. Thus, organizations should develop a compensation management system.  The system should be tandem with the organizations or departmental needs to support performance goals, and reduce high turnover of high performing employees.

Compensating human resources encompasses a wide range of issues including job evaluation and appraisals, retirement benefits, legal issues, health plans, insurance, etc. that might add morale to the employees, as it has been said that it is not only money that motivates employees but other hidden factors such as a positive work conditions, dressing code, sick leave, holidays and leave, work plan amongst others. Human Resource and Compensation specialists should be able to keep up to date information on wages and revenue trends for different types of work, qualification of workers, socio-psychological factors affecting employees in the work place, etc. For them to be able to develop, implement and evaluate the best compensation plan that both the management and the workers are aware of.

compensating human resources

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Companies should have a talent management system that maintains fairness, simplicity and standardization which cannot bring any kind of complaints of unfair compensation. They should be able to come up with systems that give appropriate salaries within a competitive job market, so that they can measure and evaluate in comparison with external or competitors ranges. If the benefits and compensation are chosen wisely it is not only the organization that will move forward but the employees will also feel valued, and these results into business increased turnover, improved growth, profitability and market share (Byars, & Rue,  2011).

There is some relative difficulty in designing and maintaining compensation plans due to the dynamics of continually fast changing business-work environments.  Therefore, managers should be able to conduct more research into more appropriate leadership training and mentoring approaches, this includes having unambiguous objectives, and putting in place effective succession plans.  This leads to more objective cost benefit analysis of the compensation and benefits plan to implement within the organization. Losing a valued employee to a competitor is more costly than many managers can imagine. It is important to note that, involving all kinds of research in evaluating performance to know your most valued employees is critical to the general growth of the company. This is also important while inducting new employees to the organization.

Also read: Qualities of a good leadership essay

Compensation should be based on a number of multifaceted variables like the availability of similar jobs in the job market, employees with identical skills, desire of the employer to retain talents, profitability of the firm and if the money is available. A deep understanding of the relationship between human resource management and the legal environment is also extremely vital in designing and implementing a compensation plan. It has been confirmed that compensation is not only in monetary form. As the organization develops, so, should be employees. Learning and development incentives provide excellent ground for compensation as employees feel that they are a part of the organization, i.e.  They feel that they are growing together with the company, and this realizes a high retention rate for the best workers. These would include leadership development, personal development and professional development.


According Byars, & Rue, (2011), there are even computer based systems for monitoring compensation within an organization that human resource specialist should be aware of that helps in collecting the necessary data and analyze the same. The advantage of these systems is that they are considered fair as they have an interactive Graphical User Interface that can easily be interpreted by both the manager, and the employees. These systems give employee data prediction, compensation data-processing, compensation-planning tool and method. These data are not limited to receiving compensation information, salary information for various employment cadres, minimum and maximum compensation values, first pay and current pay, etc.


Byars, & Rue, (2011), argue that, there is nothing that should limit a company’s success, provided the managers can influence employee morale, engagement, satisfaction and retention. This will translates into the right performance-evaluation and appraisals that will define the appropriate method to compensate the employees.


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