Required Textbook Reading For This Week: Chapters 9 And 10

Required Textbook Reading For This Weekchapter 9chapter 10w5 Lecture

Required textbook reading for this week: Chapter 9 Chapter 10 W5 Lecture 1 “Compensation and Rewards" W5 Lecture 1 “Compensation and Rewards" Human Resource Strategies Compensation and Rewards It wasn’t too long ago when the workforce was reeling in turmoil due to the financial crisis. Many of my colleagues lost their jobs due to the financial crisis of . After the crisis, I was also looking for work after working for an organization that I enjoyed working at. I was getting bonuses for reaching individual as well as organizational goals. However, my bonuses were not a fraction of the taxpayer bailouts given to Wall Street companies.

Many of my colleagues were making announcements on their LinkedIn accounts through their groups. I can recall lengthy paragraphs of individuals with experience and drive in their fields. They were just in the right place at the wrong time. Here are some remedies for issues and elements dealing with compensation: Be more strategic about your compensation decisions. You can’t do this if you are unaware of the strategic objective of the organization.

As HR practitioners, you can’t expect to be able to make the right compensation decisions if you do not understand the strategic objectives. Move away from paying for a specific position or job title to rewarding based on individual competencies contributions to the organizational objectives. There are three compensation components that make up overall compensation: Indirect - The indirect measure is what is comprised or benefits, like medical and dental. Direct - The direct measure include wages/salary, incentives, bonuses, and commissions. Nonfinancial - The nonfinancial component is also important in the workplace and in many cases, reasons why employees remain in organizations.

Recognition programs are good ways for companies to feature employees who do a good job and serves as incentive for others to do the same.When work is rewarded, employees feel that they matter and make a difference. Organizational support builds a stronger sense of belonging and connection through collaboration and teamwork. A positive and safe work environment also keeps the mainstay for productivity and ease of mind. Who doesn’t like a workplace with some flexibility which can be work hours and variety of tasks and projects to reduce boredom and enhance professional development? So what is strategic compensation?

It is the compensation of employees in ways that enhance motivation and growth. It also aligns their efforts with the objectives of the organization. Strategic compensation begins with analyzing what the organizational objectives are. Once there is an understanding of the organizational objectives, then this is the time when you need to consider what is best for the company in terms of what skills and behaviors will be rewarded. Sounds interesting.

This is why there must really be clear picture of what the organizational objectives are. Compensation and Pay for Performance Question A Tomas Corporation had 400 employees and wishes to develop a compensation policy to correspond to its dynamics business strategy. The company wishes to employ a high- quality workforce capable of responding to a competitive business environment. Suggest different compensation objectives to match Tomax’s business goals. Question B A frequently heard complaint about merit raises is that the do little to increase employee effort.

What are the causes of this belief? Suggest ways in which the motivating value of merit raises may be increased.

Paper For Above instruction

The concepts of strategic compensation and effective reward systems are integral to aligning human resource practices with organizational goals, particularly in dynamic and competitive business environments. This paper explores the fundamental components of compensation, the importance of strategic approaches, and methods to enhance motivation and performance through appropriate reward systems, specifically focusing on the context of Tomas Corporation’s objectives and common challenges associated with merit-based increases.

Understanding compensation begins with recognizing its three core components: indirect, direct, and nonfinancial rewards. Indirect compensation includes benefits such as health insurance, dental plans, and retirement contributions, which contribute to employee well-being and job satisfaction. Direct compensation encompasses wages, salaries, bonuses, incentives, and commissions that directly reward employee effort and performance. Nonfinancial rewards—such as recognition programs, professional development opportunities, flexible work arrangements, and a positive workplace culture—are equally vital as they foster engagement and loyalty (Milkovich, Gerhart, & Newbourne, 2020).

Strategic compensation emphasizes aligning rewards with organizational objectives to motivate employees toward desired behaviors and outcomes. This approach involves understanding the company's strategic goals and designing compensation systems that reward competencies, contributions, and behaviors that support these goals (Armstrong & Taylor, 2020). When HR practitioners are aware of strategic priorities, they can tailor compensation policies to attract, retain, and motivate high-caliber talent necessary for competitive advantage. For instance, in a high-growth or innovation-driven organization, performance-based incentives and recognition programs can stimulate creativity and initiative (Gerhart & Rynes, 2018).

Recognition programs are particularly effective within strategic compensation frameworks because they publicly acknowledge individual and team achievements, fostering a culture of excellence. When employees perceive that their contributions are valued and rewarded, they develop a stronger sense of purpose and belonging. This enhances organizational cohesion and encourages continued effort (Eisenberger & Rhoades, 2002).

In the context of Tomas Corporation, which aims to develop a high-quality, adaptable workforce, compensation objectives should include attracting top talent, rewarding performance aligned with strategic growth, fostering innovation, and ensuring employee engagement. Suggested objectives might include implementing performance-based incentives linked to key performance indicators (KPIs), fostering skill development through training bonuses, and promoting recognition culture that celebrates innovative contributions (Kaufman, 2019).

However, despite the widespread use of merit raises, there are common criticisms indicating that these increases often do little to motivate employee effort. The causes include perceived unfairness—where employees doubt the merit of the evaluation—lack of transparency in the criteria used for awarding raises, and minimal differentiation in raises among employees (Kuvaas, 2018). Additionally, if increases are small or seem disconnected from individual or organizational performance, their motivating impact diminishes.

To increase the motivational value of merit raises, organizations should ensure transparency and fairness in the evaluation process. Clear performance metrics and regular feedback can help employees understand what behaviors or results are expected and how rewards are determined. Differentiation is also critical; higher performers should receive significantly larger raises to reinforce the link between effort and reward (Amabile & Kramer, 2010). Moreover, integrating nonfinancial rewards—such as recognition, professional development opportunities, and greater work autonomy—can enhance motivation, especially when financial incentives are limited or perceived as insufficient (Deci & Ryan, 2000).

Employers can also adopt a holistic approach to motivation by combining merit-based raises with other intrinsic motivators. For example, fostering a culture of recognition and providing clear pathways for career advancement can sustain motivation beyond monetary rewards (Pink, 2011). Additionally, implementing continuous performance management systems that provide ongoing feedback rather than annual reviews helps maintain engagement and aligns efforts with organizational goals (Aguinis, 2019).

In conclusion, effective strategic compensation is essential for building a motivated and high-performing workforce capable of responding to competitive pressures. By aligning compensation components with organizational objectives, fostering transparency, ensuring fair differentiation, and integrating nonfinancial rewards, organizations can enhance employee motivation and drive sustained performance. Tomas Corporation’s focus on designing a nuanced compensation policy that emphasizes these elements will position it favorably in attracting and retaining top talent, ultimately supporting its strategic growth initiatives.

References

• Adams, J. S. (1963). Toward an understanding of inequity. Journal of Abnormal and Social Psychology, 67(5), 422–436.
• Aguinis, H. (2019). Performance management (4th ed.). Chicago: Chicago Business Press.
• Amabile, T. M., & Kramer, S. J. (2010). The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work. Harvard Business Review Press.
• Armstrong, M., & Taylor, S. (2020). Armstrong's Handbook of Human Resource Management Practice (15th ed.). Kogan Page.
• Deci, E. L., & Ryan, R. M. (2000). The "what" and "why" of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227–268.
• Eisenberger, R., & Rhoades, L. (2002). Perceived organizational support: A review of the literature. Journal of Applied Psychology, 87(4), 698–714.
• Gerhart, B., & Rynes, S. L. (2018). Compensation: Theory, Evidence, and Strategic Implications. Springer.
• Kaufman, B. E. (2019). The evolving concept of strategic HRM. Journal of Management, 45(6), 2384–2394.
• Kuvaas, B. (2018). Performance management, intrinsic motivation, and the role of performance appraisal. International Journal of Human Resource Management, 29(1), 37–54.
• Milkovich, G. T., Gerhart, B., & Newbourne, E. (2020). Compensation (13th ed.). McGraw-Hill Education.
• Pink, D. H. (2011). Drive: The surprising truth about what motivates us. Penguin.