The compensation strategy is a human resource management tool that defines best remuneration principles in an organization based on strategic values and behaviors. It clearly guides on the organization’s valued behaviors that should be rewarded. The study of the compensation strategy is critical in understanding the whole process for purposes of equipping me with the appropriate skills required for application in the human resource industry.
The knowledge of compensation strategy provides me with skills that I will use to develop a sound compensation strategy that enhances my organization’s competitive advantage within the market. Its development process requires a review of the business environment with a clear understanding of the important external factors. Also, the business design must be assessed with regard to the key business goals and the resulting human resource implications. Through the study of compensation strategy, I will be equipped with skills on aligning employee’s roles with the organization’s business strategy and thereby defining what to reward, how and why. Moreover, my understanding of the compensation strategy is important in the identification of the gaps and priorities that need to be fixed thus the development of an action plan that guides the whole process.
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The study is critical in positioning an organization in the market with a strong competitive advantage. The strategy provides knowledge on how to properly mix payments, benefits and career opportunities in a way that upholds the company’s corporate culture and values and attracts skilled employees while controlling costs. In this sense the skills I acquire will help in integrating the compensation component in my organization’s overall strategy that values recruitment and selection of skilled talents, developing and motivating employees and best talent retention as key to the success of the business. This is achieved through a policy that incorporates an attractive benefits package that includes proper pay, incentives, benefits and career advancement and promotions.
In conclusion, as a human resource professional equipped with the knowledge of compensation strategy, I will be able to address issues on compensation system design, compensation criteria, employee pay and benefits within an organization. Eventually, the impact will be reflected by the company’s competitive advantage in the market.
