Chapter11 - NiraliPatel Chapter11:Compensation MGT530:...

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Nirali Patel Chapter 11: Compensation MGT 530: Strategic Human Resource  Management Janice Newman
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Compensation is very important in strategic human resource management. Compensation strategy is designed to attract new talents, retain current employees and ensures the optimal level of the performances by employees in meeting organizations strategic goals. Designing of compensation system should be such that it ensures all the employees, the sense of equity. There are separate components of organizations compensation system: Direct and Indirect, while former includes, base pay and incentive pay and the later includes legally required compensation by law and other optional benefits that employer wants to provide like healthcare, pension plans, paid time off, disability etc. In designing overall compensation system, an organization needs to be concerned with the perceived equity of the system for employees. Some of the key issues that organizations faces in setting their compensation policies include compensation relative to market, balance between fixed and variable compensation, utilization of individual versus team based pay, appropriate mix of financial and non-financial compensation and developing an overall cost effective program that results in high
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Chapter11 - NiraliPatel Chapter11:Compensation MGT530:...

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