Compensation is a key aspect in corporations. The term compensation in employment entails an arrangement that is meant to provide employees with the support they require to execute their mandated roles and responsibilities. Primarily, an employee is offered a compensation scheme that supports his or her well overall well-being in exchange for rendering services. For instance, a compensation scheme would be composed of a house, transport, and medical allowances. Collectively, the level of financial input of an organization into its HR’s compensation scheme determines the productivity of employees hence the success or failure of the entity.
Different employees perceive an organizational culture of compensation in diverse ways, which are mostly inclined towards the allocation of financial resources. For instance, some employees believe that an attractive compensation includes being paid enough to cover their both their needs and wants (Rasheed et al. 105). On the contrary, others think that a compensation package is not wholesomely attributed to financial resources listed in an employment contract. Most employees, unfortunately, consider compensation schemes as a financial obligation that is mandatory upon the rendering of labor.
Disagreements between an organization’s management and its employees may culminate in go-slows, peaceful protests, or full of strikes. Most employees feel unappreciated if a compensation package does not improve their overall lifestyle and enable them to afford medication, education, and professional growth among others. If a compensation package agreed between a worker and an employee is not satisfactory, a conflict may arise and end up in a struggle that may hamper the production activities of a firm (Rasheed et al. 107). Successful organizations package their compensation schemes in ways that satisfy both them and their employees. For instance, these firms endeavor to create a personal relationship between them and their human resources as part of their compensations schemes to foster a working partnership that is considerate.
Employers provide benefit plans to employees as a means of ensuring that their professional and personal availability is not compromised in any way. For example, covering an educational expense on behalf of the workforce assures an enterprise that the acquired skills and benefits would significantly improve its production quality (Yang et al. 1043). However, even if organizations opted to provide benefit plans as part of compensation schemes, employees may fail to honor their roles and responsibilities. Even if a compensation scheme provided an education allowance, employees might choose to skip a course to cater to other needs that they may consider more important than the courses. Therefore, benefit plans are more effective and efficient when implemented by an organization than when left to employees.
A health insurance cover, pension plan, and life insurance are the most fundamental benefits that a firm should provide for its workforce. These benefits are vital for the workers as they are an assurance the worker is protected on all angles of employment. For example, a health cover would cater to the medical needs of an employee hence ensure that he or she is healthy enough to be productive at the work place. It also promote the well-being of an individual. Similarly, a pension plan is a benefit that guarantees an employee of a comfortable life upon retirement. Collectively, these plans ensure that the interests of both parties (the employer and employee) are assured in the benefits plan.
Rasheed, Muhammad Imran, et al. “Factors Affecting Teachers’ Motivation: An HRM Challenge for Public Sector Higher Educational Institutions of Pakistan (HEIs).” International Journal of Educational Management 30.1 (2016): 101-114.
Yang, Li-Ren, et al. “A Framework for Evaluating Relationship among HRM Practices, Project Success and Organizational Benefit.” Quality & Quantity 49.3 (2015): 1039-1061.