One Observer Argues That External Equity Should Always Be Th ✓ Solved

One observer argues that external equity should always be th

Question 1: One observer argues that external equity should always be the primary concern in compensation, noting that it attracts the best employees and prevents the top performers from leaving. Do you agree?

Question 2: The United States mandates only four benefits, yet U.S. employers provide many other benefits – such as health insurance, retirement benefits, and paid vacations – voluntarily. Why do so many employers provide these benefits even though they are not legally required to do so?

Question 3: Many U.S. companies outsource activities, such as manufacturing, to factories in Asia and Latin America. For example, Nike manufactures shoes in Indonesia and Hewlett-Packard uses electrical parts made in Chinese factories for its computers. Should the workers in these overseas factories that are part of the global supply chain for an American company have the same rights as U.S. employees? For example, should workers in overseas factories that make shoes for Nike have the right to the same working conditions as Nike employees working in the United States? What are the advantages of maintaining a policy that offers consistent employee rights on a global basis? What are the disadvantages of such a policy?

Question 4: Do you think a company should keep pay secret and request that all employees not disclose their pay to coworkers? Why, or why not?

Question 5: From a company’s perspective, what are the advantages and disadvantages of telecommuting employees?

Question 6: The administration of discipline usually occurs between a manager and a subordinate employee. How can HR staff contribute to the fairness of the administration of discipline? How can HR staff contribute to the reduction of the need to administer discipline to employees within a company?

Question 7: Some benefits experts claim that unemployment insurance and workers’ compensation benefits create a disincentive to work. Why do you think they say this? Do you agree or disagree with this position?

Question 8: A customer survey for Landmark Company reports that people do not trust what sales representatives say about their firm’s products. How might you use the compensation system to help change this negative image?

Question 9: Chapter 11 identifies three assumptions underlying pay-for-performance plans. Do you believe these assumptions are valid? (the three assumptions are: 1. Individual employees and work teams differ in how much they contribute to the firm – not only in what they do, but also in how well they do it. 2. The firm’s overall performance depends to a large degree on the performance of individuals and groups within the firm. 3. To attract, retain, and motivate high performers and to be fair to all employees, a company needs to reward employees on the basis of their relative performance.)

Question 10: Several companies are moving in the direction of paying employees with non-monetary rewards in lieu of higher wages. Why do you think this is happening? Do you think this is a good thing for companies and employees? Explain your answer.

Paper For Above Instructions

Compensation within organizations remains a multifaceted challenge, with various perspectives on best practices shaping how employees are rewarded. The principle of external equity, which focuses on how the pay of employees compares to similar positions in other organizations, is critical for attracting and retaining talent in an increasingly competitive labor market (Gerhart & Rynes, 2003). This paper discusses the importance of external equity in compensation, examines employers’ motivations for offering voluntary benefits beyond legal requirements, considers workers' rights in global supply chains, evaluates pay transparency, delves into telecommuting, explores the role of HR in discipline administration, scrutinizes disincentives created by benefits, and analyzes non-monetary rewards in employee compensation.

External Equity in Compensation

External equity signifies the importance of aligning internal compensation structures with external market rates for similar work. Organizations that prioritize this form of equity often succeed in attracting high-quality candidates while minimizing turnover among top-performing employees (Milkovich & Newman, 2008). Therefore, it can be argued that external equity should always be the primary concern in compensation. By offering salaries and benefits that are competitive, organizations can position themselves as desirable employers, helping them to foster a skilled and motivated workforce.

Voluntary Benefits Beyond Legal Requirements

In the United States, employers are mandated to offer only a limited set of benefits, yet many organizations choose to provide additional benefits such as health insurance, retirement plans, and paid leave (Doris, 2020). This practice may stem from various motivations, including improving employee morale, enhancing job satisfaction, and boosting organizational loyalty. Additionally, offering more benefits can serve as a powerful recruitment tool, allowing companies to stand out against competitors by promoting a more attractive total compensation package (Fitzgerald, 2019). It is evident that while not legally required, voluntary benefits offer substantial advantages to employers and employees alike.

Workers' Rights in Global Supply Chains

The question of whether overseas factory workers should enjoy the same rights as U.S. employees presents a challenging ethical dilemma. Workers in countries with stringent labor laws and working conditions often face exploitation due to lax regulations in other countries (Harrison, 2018). Advocating for consistent employee rights across supply chains not only promotes fairness but also enhances brand reputation globally (Smith, 2019). However, this uniformity could lead to increased operational costs for companies, raising concerns about competitiveness in a global market (Harrison, 2018). Thus, balancing ethical responsibilities with business viability remains an ongoing challenge for multinational corporations.

Pay Secrecy among Employees

The topic of pay secrecy is contentious, with advocates arguing that it fosters confidentiality and protects company interests, while detractors assert that transparency promotes fairness and equity (Baker, 2020). Revealing pay within organizations can help address wage discrepancies, especially related to gender and race, and create an environment of trust and equality (Gault et al., 2019). Conversely, maintaining pay secrecy might discourage open discussions about compensation, leading to demotivation among employees who may feel undervalued. Therefore, businesses should carefully assess the repercussions of pay secrecy and consider embracing transparency to enhance engagement and trust.

Advantages and Disadvantages of Telecommuting

Telecommuting has gained prominence due to advances in technology and changing work preferences. From a company's perspective, advantages include reduced overhead costs, increased employee satisfaction, and broader talent access (Gajendran & Harrison, 2007). However, challenges such as potential decreases in collaboration and communication may arise in a predominantly remote workforce (Mello, 2020). Companies must weigh the benefits and shortcomings of telecommuting to derive effective strategies that align with organizational goals.

HR's Role in Fair Discipline Administration

The role of Human Resources (HR) in the administration of discipline is critical for fairness and consistency. HR can provide managers with guidance, establish policies, and ensure procedures align with legal and ethical standards (Bennett, 2021). Additionally, HR can play an essential role in implementing preventive measures by fostering a positive organizational culture and providing training that reduces instances necessitating disciplinary actions (Harris & Ogbonna, 2019). Ultimately, HR serves as a bridge to enhance the efficacy of disciplinary practices.

Disincentives to Work from Benefits

Experts argue that unemployment insurance and workers’ compensation can create disincentives to work, suggesting that employees might opt for benefits instead of employment (Hirsch & Macpherson, 2019). While some agree with this viewpoint, others argue that these benefits are essential safety nets, promoting workforce stability (Reville & Nanda, 2018). Understanding both perspectives is crucial in shaping policies that encourage work while providing necessary support for those in need.

Using Compensation to Change Negative Perceptions

A customer survey indicating distrust in a product's sales representatives may hinge on compensation structures. Organizations can align incentive compensation with transparency and customer satisfaction metrics, thereby encouraging sales representatives to build authentic relationships with clients while fostering trust (Anvari & Khoshgoftar, 2020). By addressing these negative perceptions through an effective compensation framework, companies can rebuild brand reputation and enhance customer loyalty.

Validity of Pay-for-Performance Assumptions

The assumptions underlying pay-for-performance plans can be valid if implemented correctly. Companies that regard individual contributions and foster collaboration often benefit from motivating high performers (Armstrong, 2019). However, the challenge lies in ensuring that performance metrics are meaningful and centered on both individual and collective goals while promoting fairness within the organization.

Non-Monetary Rewards Trends

Increasing trends toward non-monetary rewards stem from a broader understanding of employee motivation and satisfaction beyond just financial compensation (Kumar & Padhy, 2019). Non-monetary incentives, such as recognition programs and flexible working arrangements, can often yield higher engagement and satisfaction levels. This approach allows companies to maintain financial control while still delivering value to employees in creative and personalized ways (Cohen, 2021). Thus, crafting a compensation strategy that integrates both monetary and non-monetary rewards can foster a high-performance culture.

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