Role of HR in Employee Compensation and Benefits


Over the last two decades, the HR department has been obligated to develop competitive strategies that aid in the performance of organizations. Currently the HR department is held responsible for the retention and maintenance of highly motivated and satisfied employees. Nevertheless, despite this new role, not much study has been conducted on the actual role and efficiency of modern day HR teams in achieving their goals. The paper presented explored all this aspects thus giving a definitive answer after completion.




Abstract 2

Introduction. 3

Problem statement. 3

Research method. 4

Data Analysis. 5

Expected results. 8

Conclusion and Recommendation. 8



Role of HR in Employee Compensation and Benefits


Over the 21st century, one of the main functions of the Human Resources department is to improve workforce satisfaction, engagement, and motivations in improving employee satisfaction. One of the strategies used by HR to attain their objectives is by creating policies that improve benefits and compensation. According to Noe, Hollenbeck, Gerhart, and Wright (2013) ‘pay systems for antiquity have been designed to attract, retain, as well as motivate employees’ (p. 412). Nevertheless, it should be noted that over the last one and a half decades the field Human Resources management has used pay systems particularly compensation and benefits as a strategic element in business. According to Hansen (2015), initially, employee compensation was merely a payment for service rendered, meaning the more an employee gave in reference to service the more he or she could be enumerated. Nevertheless, in the era of aggressive human resource management strategies, employee benefits and compensation as a tool to attract skilled employees and reduce turnover a factor that a factor that.

Problem statement.

For years the Human Resources department across has grappled with issues regarding discriminatory payments such as gender pay gaps. In the current era, it is clear that the modern HR department has to find solutions to this age-old pay issues as well as develop new policies of Employee Performance Management through benefits and policies. As indicated by Weaver and Trevino (2011), the 21st century HR management team ought to develop benefit and compensation policies that increase the chances of requiring the best employees available globally, reduce turnover while improving retention, as well as improve workforce engagement, motivation, and satisfaction. From the information provided it can be argued that today’s HR management department has a growing significant role in administration strategies.

 Research method

The current research used a descriptive survey approach. As indicated by Sekaran and Bougie (2016), a descriptive study is more formalized as well as typically structured that have states hypothesis or investigative questions. Such processes serve a variety or study objectives; for instance, descriptions of phenomenon or profiles linked to a subject population approximates of the proportion of the sample class, as well as the discovery to other variables (Colorafi & Evans, 2016).). In this case, the population will involve 1500 individuals who work in different organizations within the service industry. The variables studied will be increased employee satisfaction and engagement levels due to different compensation plans employed within the workplace (Poole & Jenkins, 2015). Email questioners were sent to all respondents in order to cover larger geographical distances as while maintaining low costs.

Limitations of Study

The study was faced with a variety of limitations such as

  1. Delayed response from different respondents due to work-related attachments.
  2. There were pieces of evidence of a casual approach from the answers provided by the respondents towards filling the questionnaire.

3 The study was crippled to some extent with the increased absence of comprehensive HR manuals particular in instances where companies reviewed the reactions from the respondents.

  1. Some of the respondents were biased in presenting their reactions particularly when it came to the provision of benefits.

Data Analysis

The data collected was coded according to the research questions ad later statistically analyzed using social sciences (SPSS) package. The Quantitative data was examined through the use of a mixture of descriptive statistics predominantly frequency distributions tables, percentage as well as mean used in the measurement of dispersion for instance variance plus standard deviation (Wiek & Lang, (2016). Inferential statistics for example correlation were used. The data was presented in tables and graphs.

  Frequency Percentage  
Respondents 1273 84.84%  
Non-respondents 227 15.16%  
Total 1500 100%  



Name Frequency Percentage
Human Resources Managers 121 40.33%
Human Resources Advisors 87 29%
Huma Resources Assistances 92 80. 67%
Total 300 1000


Respondents Work Experience

Work Experience Frequency Percentage
Less than 10 years 257 17.13%
11 to 20 years 482 32.13%
21 to 30 years 399 26.6%
Over 30 years 362 24.13%
Total 1500 100%



Availability of Human Resources Policy

Human Resources Policy Frequency Percentage
Yes 826 50.07%
No 674 49.93%
Total 100 100%


Appraisal Systems

  Mean Standard Deviation
Performance Based pay 3.12 0.01
Ability Pay 4.15 0.22
Internal Equity 2.47 2.10
External Equity 3.00 1.04
Management Philosophy 2.40 2.30
Government regulations 2.57 1.41
Trade Unions 4.66 0.03
Seniority 4.50 0.02
Job Rank 4.28 0.15
Competition 3.01 1.00
Industry Practice 3.87 1.12
Reward Strategy 3.14 0.87


Compensation incentives

Incentives Frequency Percentage
Bonuses 398  
Subsidized Loans 271  
Fringe Benefits 189  
Job Promotion 522  
Employee Recognition 120  



It should be noted that some of the HR department had incentive policies that involved more than one compensation program.

Expected results

From the study conducted, it was clear that the companies that had HR policies on compensation and provision of benefits highlighted higher employee engagement and satisfaction. This showed in their responses on the interview most employees showing high enthusiasm for promotions, provision of benefits, in addition to overall recognition. In general, the HR department establishes employee efficiency when selecting the type of compensation incentives that best suits their workforce, Appraisal Systems that are none bias to all employees, and overall management of performance.

Conclusion and Recommendation

From the study, it can be argued that a modern-day HR department is obligated to attract, retain, and manage the workforce in a manner that provides an organization with an additional competitive advantage. The right compensation incentive as well as a non-bias appraisal system is key for organizations to improve their performance as well as reduce costs in the processes. Nevertheless, despite the study’s success, there is a need for much improvement in the collection of data particularly when large samples of respondents are involved. Despite this challenge, it is clear that the HR department is important in delivering a comprehensive strategy to businesses in a highly competitive environment.



Hansen, F. (2015). Currents in compensation and benefits. Compensation & Benefits Review39(3), 5-27.

Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2013). Human Resources Management: Gaining a Competitive Advantage, Tenth Global Edition. McGraw-Hill Education.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.

Weaver, G. R., & Trevino, L. K. (2011). The role of human resources in ethics/compliance management: A fairness perspective. Human Resource Management Review11(1-2), 113-134.


Colorafi, K. J., & Evans, B. (2016). Qualitative descriptive methods in health science research. HERD: Health Environments Research & Design Journal9(4), 16-25.

Wiek, A., & Lang, D. J. (2016). Transformational sustainability research methodology. In Sustainability Science (pp. 31-41). Springer, Dordrecht.

Poole, M., & Jenkins, G. (2015). Responsibilities for human resource management practices in the modern enterprise: evidence from Britain. Personnel Review26(5), 333-356.