There is a clear business case for strategic compensation. Well managed rethinking of performance management, rewards and benefits leads to better business results, stronger capability, higher staff retention levels, heightened motivation and employee satisfaction. The success stories of organizations leading the field in strategic compensation prove that how employees are motivated, rewarded, recognized, fulfilled and challenged to perform better is a key differentiator between excellence and plain mediocrity.
One of the best ways to keep employees from walking out the door is to pay a higher salary. Paying employees more in salary, however, won't necessarily align them with the company's priorities. In order to do that, companies need to adopt a compensation program that gives employees incentives to achieve the company's goals. The challenge is designing a plan that will accomplish the desired result (Designing, 2007).
From top executives to entry-level employees, compensation plans are integral to attracting, motivating and retaining employees.
It's often a factor that sets a company apart from its competitors. While most businesses understand the benefits of a well-designed compensation plan, the development of a successful program can be a daunting and complex task. Several recommendations for an updated compensation and benefits program for Plastec will be discussed.
Paul should begin by updating the company's job descriptions and job specifications. After this initial step, his next move should be to value his jobs. This can be completed through a job evaluation, which is a formal, systematic means to identify the relative worth of jobs within an organization. Since he is creating this compensation plan for one type of job, the machine workers in the company, he should focus on the knowledge and experience it takes to perform the job. Other factors that should be considered are the safety and hazards of using the machinery,