4 Jul 2022


Compensation as a Change Agent

Format: APA

Academic level: Master’s

Paper type: Case Study

Words: 632

Pages: 2

Downloads: 0

The business environment is ever changing today. There are fixed parameters for success. As a result, business has to keep changing their strategies to enable them to thrive in the dynamic environment. Valuable assets in business include workforce. Forces of change include competitive market pricing, the emergence of substitute products, changes in technology and changes in a human force whose work is to implement these changes (Caluwé, & Vermaak, 2003). Using compensation directly affects the employees so that they can respond to forces of change in the business environment and attain sustainability through the compensation. Compensation influences the morale of the employees, satisfaction of the workforce, level of production and the recruitment of employees.

Compensation is an improvement in Business that entails the payment of workers. The workers are paid in exchange for services offered in the firm. Compensation is an imperative aspect of human resource management as it influences the behavior of employees directly. When employees are satisfied and motivated, they will increase the productivity levels hence benefiting the business. Businesses who use compensation as a change agent have never failed to attain success. Nonetheless, compensation is dependent on a few factors within the business. The business revenue, costs incurred a total number of employees, and the efficiency of the employees in their duties will determine the amount of money they will get as compensation. It will also affect rewards that they will get because of doing exemplary work.

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Compensation has several designs which can be used to achieve a particular desired employee behavior. There is a total compensation plan which accounts for every benefit and employer and employee gets. The total compensation plan, lets the employee know how much the company is contributing towards the benefits that the employee is receiving. The main importance of this type of compensation plan is that the employee can appreciate what the employer does for the sake of their benefits. It creates a win-win situation whereby the employee gets satisfied and improves on productivity and the business benefits through getting better services from a motivated workforce. The major setback is that in the case where the employee feels the company is not doing enough for the sake of their benefits, they will not be satisfied hence their performance levels will reduce.

Using total compensation plan as a way of improving employee behavior is always a good strategy provided the company effects it accordingly. The company is supposed to give employees what they deserve for the value of their services. For that reason they should maximize ion employee benefits from compensation as long as it’s according to their input in the business and the business will still make revenue (National Institute of Business Management, & Thomson2006). Employees, on the other hand, will understand the compensation plan as per their work input.

There are also other compensation plans which can be used to effect change in business. For instance a shift in payment plans from salary to commissions. The main benefit of such a scheme is that the employees will put in more effort so that they can earn more hence the business will benefit as well as the employee. The major setback is that changing the compensation plan may entail changing the contract agreement which I against the rights of the worker. Another compensation strategy would be changing from monthly pay to hourly or weekly pay. The plan will also affect the contract agreement while to some extent the employee will be able to see the value of their work.

Evidently, the total compensation plan is so far the best plan to use to effect change. The program benefits both the employee and the employer and urges both parties to be up to the task. For instance, as the employee continues to work better they will expect the value of their efforts to reflect in the paychecks. The potential negative consequence will be in the case where the business is making loses the employee might not understand the situation ad still demand more benefits.


Caluwé, L. ., & Vermaak, H. (2003). Learning to change: A guide for organization change agents . Thousand Oaks, CA: SAGE.

National Institute of Business Management., & Thomson Gale (Firm). (2006). Compensation & benefits . Falls Church, VA: National Institute of Business Management.

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StudyBounty. (2023, September 16). Compensation as a Change Agent.


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