Total Compensation Methods

Essay by brokeheartUniversity, Bachelor'sA, March 2009

download word file, 5 pages 5.0

Total Compensation MethodsThe majority of jobs and careers in today's global marketplace have a workforce that depends on fair compensation for a dedicated output of work. "Because pay is important both in its effect on employees and on account of its cost, organizations need to plan what they will pay employees in each job" (Noe, Hollenbeck, Gerart, and Wright, 2007, p. 361).Without adequate planning it is difficult to estimate the costs establish an equitable pay structure. "Human resource professionals develop this pay structure based on legal requirements, market forces, and the organization's goals, such as attracting a high quality work force and meeting principles of fairness" (Noe, et al, 2007, p. 362).

"In contrast to decisions about pay structure, organizations have wide discretion in setting…incentive pay. Organizations continually connect incentive pay to individual performance, profits, or many other measures of success" (Noe, Hollenbeck, Gerart, and Wright, 2007, p. 391).

In addition to equitable pay and incentive pay, benefits are important to employees in the workforce.

"Benefits serve functions similar to pay. Benefits contribute to attracting, retaining, and motivating employees" (Noe, Hollenbeck, Gerart, and Wright, 2007, p. 422). There are many possible benefits that can be tailored to attract a specific workforce. Benefits can offer a competitive edge when establishing and maintaining a quality workforce (Noe, et al, 2007).

This paper will examine various benefits programs and analyze the impact of salary and benefits programs on employees and organizations. It will also relate salary and benefit administration strategies to organizational culture and performance.

Benefits ProgramsMany companies have incorporated different attributes in order to attract a constant flow of potential employees. The one thing that all companies have in common is the basic needs that cover many of the same benefits, such as total pay component. Total pay components consist of...