Introduction
Compensation programs are critical in determining a company’s level of competition in a particular industry. Lucrative pay keeps the staff inspired and satisfied with their jobs, resulting in reduced staff turnovers. Most importantly, good compensation strategies impact a sense of strong commitment in the staff towards the organization, which is vital for quality performance. Moreover, effective pay impacts the development of loyalty in staffs, who strive to become highly productive and prodigious in performance, to attain the set goals. Productive compensation programs are therefore the key to stimulating a company’s competitiveness.
Steps Involved in Job Analysis and Evaluation
Six primary steps are involved in the completion of job analysis and evaluation. The first core step is the collection of comprehensive data on the job. Job analysts should commence the analysis by studying materials that give a depiction of the tasks involved in the job. Furthermore, an individual should scrutinize position descriptions and organization values, work-related studies, performance requirements, and most importantly, subject matter expert input ( Singh, 2008 ). The next step in these two processes is to make a comprehensive list of the responsibilities pertaining to the job. A preliminary list of tasks and proficiencies should be prepared for the purpose of effective performance.
Delegate your assignment to our experts and they will do the rest.
Moreover, the information on the list should be based on the data or SME input gathered in the initial step, as well as the sources that the information has been derived from. The third step is to make an identification of essential errands in the job. In this phase, Singh (2008) argues that it is critical for analysts to rate each task based on its significance. In the fourth step, the job analysts should define the fundamental competencies in the job. All the competencies should be valued depending on their importance.
Additionally, the analyst should specify if the recognized competencies are mandatory at entry. After the competencies have been appraised, the analyst should examine and rule out the critical ones. Most critical entries are rated significant or needed at entry. The fifth step involves the establishment of a link between the responsibilities and the essential competencies. In addition, the analysts should define the magnitudes to which every competency is significant in the execution of each task. Furthermore, all the tasks that have not been linked to even a single competency are excluded. In the final step, the analysts or evaluator should employ a Request and Justification for Selective Quality Ranking Factors ( Singh, 2008 ) to identify the competencies that will be employed as selective factors. It is mandatory for these aspects to be documented.
The significance of the Outcomes of Compensation Programs in Promoting Effective Pay
The outcomes of compensation programs are highly significant in promoting effective pay. The programs necessitate ongoing attention to promote effective functioning. Hence, effective pay becomes a long-lasting organizational trend, promoting the employee's levels of job satisfaction, and increasing firm productivity. The compensation programs also affect a need for frequent observation and evaluation of the performance and efficacy of the compensation programs. Consequently, any errors in the programs are easily identified and modified, impacting constant effective pay. Additionally, these programs foster transparency in pay by ensuring that compensation is fair. The impacts of compensation programs are essential to the promotion of effective pay.
Differences between External Influences on Pay Structures and Internal Systems
A major difference between external motives on pay structures and internal influence on the same is highly apparent in the article by Tenhiala & Vuori (2012). According to Tenhiala & Vuori (2012), internal influences on pay structures augment the influence of the Human Resource Management Unit. Nonetheless, the external influences on pay structures care less on collaborating with HR experts to make pay more effective. Instead, external influences are more interested in developing flawless systems, which appear to follow to best practices in the eyes of outsiders. Furthermore, external influences are aimed at the implementation of surface transformations which can be seen directly by outsiders, to enhance the company’s reputation. On the other hand, internal influences impact the development of good compensation structures According to Tenhiala &Vuori (2012), a transformation is made into the deep structure of compensation platforms.
External influences focus on enhancing the image of the company to the outsiders, but their activities have a little positive impact on the compensations of employees. Nonetheless, internal structures impact both the internal stakeholders, while also impacting transformations that are visible to external stakeholders, which enhance the company’s image and reputation, even if the pay systems are not actively endorsed to external stakeholders. For instance, more effective pay programs which are fostered by internal influences, heighten the levels of staff’s job satisfaction, working morale, and increase their productivity (Tenhiala &Vuori, 2012). In addition, the new changes in the systems of pay, and the satisfaction levels are visible in the quality performance of the employees, which in turn promotes loyal and satisfied customers. Moreover, it increases the brand and fosters the development of a flawless company image, giving a firm more competitive advantage over other such firms in a particular industry.
How HRM Develops Total Compensation Programs
HRM employs a fours stage strategy of developing Total Compensation Programs which utilize market, and labor data to promote a company’s competitiveness, as well as effective recruitment, increased staff motivation, and job retention. Before the process starts, the right team for the job is assembled. According to Heneman & Coyne (2007) the most exemplary senior HR professionals, who have extensive experience in project management and total compensation, are chosen as leaders. The leaders motivate continuous information flow between the top management and the task team. Generally, the selected leaders foster the credulity of the task. After the leaders are selected, other experts such as external consultants are sought, since they bring technical knowledge, as well as wisdom which are acquired from a lot of experience in the field of compensation to the project (Heneman & Coyne, 2007). Additionally, a considerable number of employees are also included in the team, since they are the ones who will be directly affected by the new program, and can, therefore, give insight on which strategies work best, impacting effective decision making. The roles of each team member are then clearly defined, to ensure that everyone comprehends their role in the process.
In the first phase, HRM collects data, to analyze the existing total compensation system within the organization and the external labor markets. The acquired information guides the design stage. Additionally, HRM defines and evaluates potential compensation strategies putting into consideration the needs of the existing market, and the quality of services that are needed to fully gratify the identified needs of the potential market, based on the data collected from the market analysis ( Ramlall, 2006) . Additionally, an analysis of the compensation standards required in the labor market, as well as existing pay rates, is conducted, to determine the best pays for staff, depending on their areas of specialty, levels of education, and work experience, among other critical factors.
In the execution phase, the selected Total Compensation programs are implemented, and the HRM team conducts an evaluation of the program. Furthermore, the HRM team then identifies whether the selected TCP is effective in promoting competitiveness (Heneman & Coyne, 2007). Additionally, the team gauges whether the new pay program is useful in increasing the staffs working morale, job satisfaction levels, and increased retention. If the program is deemed effective, then the program is retained. If the program proves contrary to the expectations, then it is terminated, and the process commences ones more, in order to select the most efficient compensation strategy, to promote productive pay.
The Efficiency of a Total Compensation Program
It is better to design a compensation program that focuses on external labor market conditions, as well as promoting organizational competitiveness in the marketplace when a company is struggling to recruit and retains productive and motivated employees. The main reason for this argument is because this strategy enables companies to set pay levels which are comparable to the ones that are existent in the marketplace. As a result, a company ensures that its compensation program preserves its effectiveness, by employing similar pay rates as its competitors. Concurrently, the company is able to attract various competent individuals in the required fields of specialty, hire them, and keep them highly motivated to promote job retention. Consequently, this results in staffs who have a deep sense of obligation to the organization and its objectives ( Urbancová & Šnýdrová, 2017), giving it a competitive advantage over its competitors.
Additionally, by focusing the compensation on external labor markets and competitiveness, the company is able to determine the levels of satisfaction of workers in various competing firms, to conclude whether their pay programs are effective or not. Based on the collected information, a company may decide to provide higher salaries to its employees as opposed to the pay rates in the existing labor market to intensify the worker's job satisfaction. The strategy heightens the working morale of staff and promotes motivation and job satisfaction, which are critical to job retention and increased competitiveness ( Urbancová & Šnýdrová, 2017) .
Conclusion
A company’s compensation program is a critical determiner of the levels of employee satisfaction, motivation, job retention, as well as the company’s competitive advantage. It is therefore crucial for companies to take a considerable amount of time to identify the various payment strategies that should be employed to achieve these critical goals. Furthermore, companies should employ compensation programs that focus on the labor market, and increase the firm’s competitiveness, to promote productive recruitment, increase staff motivation, and retention. The above outcomes are fundamental in giving a company a competitive advantage over other firms in the concerned. Industry.
References
Heneman, R., L., & Coyne, E., E., (2007). Implementing Total Rewards Strategies. SHRM
Foundation’s Effective Practice Guidelines Series. Retrieved from:
https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert- views/Documents/Implementing-Total-Rewards-Strategies.pdf
Urbancová, H., & Šnýdrová, M. (2017). Remuneration and employee benefits in organizations in
The Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae
Brunensis , 65 (1), 357-368.
Ramlall, S. J. (2006). Strategic HR management creates value at Target. Journal of
Organizational Excellence , 25 (2), 57-62.
Singh, P. (2008). Job analysis for a changing workplace. Human Resource Management
Review , 18 (2), 87-99.
Tenhiala, A., &Vuori, T., (2012). Decoupling Compensation Practices from Human Resource
Management. Int, Studies of Mgt. & Org, 42 (1): 7-23.
