Strategic compensation programs are among the approaches employed in order to enhance motivation and growth in a firm (Bohlander & Snell, 2004). This approach has numerous advantages both to the organization and at individual levels. Before the execution of this program, the firm’s objectives need to be defined. In order to develop establish an effective strategic compensation program, the following steps are necessary. The first step involves defining the compensation philosophy. The next step involves linking the compensation program to the overall firm strategy. After linking the program, change the existing culture and reinforce the new one with compensation (Bohlander & Snell, 2004). Changing culture mainly entails setting new expectations as per the firm’s objectives. Then, reward the behaviors and various approaches by your workforce that drive the results. Thinking of total compensation is the next step that will require the employee to determine the approaches to drive total compensation. Then lastly, measure your return drawing a comparison on the invested payroll.
An employer should prioritize strategic compensations program following the following benefits (Bohlander & Snell, 2004). The program improves employees’ future performances towards the firm’s objectives. As a way of rewarding employees, the employer will be assured of efficiency in the work environment since this approach is a form of motivation. Moreover, through this program, the employee is likely to attract new employees, skilled and innovative hence promoting the growth of the business. The strategic compensation program will also help in maintaining salary equity among the employees. In addition, the employment of the strategic compensation approach will help in reducing unnecessary turnover in a firm (Bohlander & Snell, 2004). Considering the work environment, strategic compensation will enhance competition hence improving the firm’s performance. The approach will help the firm maintain a competitive nature in the labor market hence promoting its performance. Lastly, linking strategic compensation to the overall firm strategy will aid in controlling the compensation budget and align the firm's efforts towards its objectives (Bohlander & Snell, 2004).
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References
Bohlander, G., & Snell, S. (2004). Implementing compensation and security. Managing Human Resources , 439-442.
