Compensation is important in all human resource strategies as it is important and visible to the employees. Compensation program acts as a way to communicate and reward goals, therefore, pushing the employees to work towards achieving these goals. Decisions such as labor costs and performance of the company are critical to the success of the business and therefore when designing the compensation decisions they have to be strategic. CapraTek is entering the new market through expanding its manufacturing Operations Illinois. The expansion will require CapraTek to expand its workforce and capital. Compensation is a way of rewarding employees for performing their jobs or for their knowledge and skills. Will the employees receive monetary or non-monetary rewards according to their performance levels in the business?
Managers and HR have many challenges when it comes to managing employees to support changes in the organization, technology or business strategy. Employees too are changing their values, expectations, career development, and education as the company expands. Hr practices involve recruitment, performance appraisal, training, career development, selection and termination of employment. With the new entry into the market, the recommended strategic decision for CapraTek company is to infuse lower labor costs and more risk into their system. Other tactical HR strategic decisions include pay increase criteria, the frequency of payout, and some increased programs. Some of the key stakeholders at CapraTek are employees, U.S government, community, unions, owners and the suppliers of the manufacturing plants. HR adopt strategies to enable them to manage their workforces effectively. One the most critical strategic decision is determining employee contribution, that is, why, when and how employee pay increases with the increased labor force. Pay increase in any organization is a powerful communicator as it signals what the company values most. For example, in CapraTek, increasing the pay for the new and highly skilled job is important and will motivate the employees to work better. Pay increase should complement the overall human resource strategy (Martocchio, 2015).
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CapraTek is certainly pursuing a growth strategy, and the company is taking critical financial risks and high investments to expand their market. The company must, therefore, show maximum flexibility in coping with the new market. Contextual influences at CapraTek are local, federal and state laws. Under the federal laws, the company should ensure that there is income continuity, employees’ safety, minimum wage, overtime provisions with the expansion happening and the recommended working hours. According to the Civil Rights Act of 1964, there should not be pay discrimination: equal pay for all employees for substantially equal work regardless of their gender or race. CapraTek should protect and accommodate employees who have mental or physical disabilities and family needs.
A company that is pursuing growth is likely to put more emphasize on compensation programs. Involving internal constituent compensation systems is important. Under the reward plan, employees in the high-level qualification departments, more responsibilities, and multiple jobs should receive higher pay than those with fewer responsibilities, lesser qualifications and complex job duties. An employee receiving an incentive pay for exceptional performance is good because every individual loves it when someone else appreciates them. This rule requires that the HR recognizes job characteristics differences among the employees (Wilson, 2016).
The major objective of compensation programs in any organization ids to attract and retain employees, who have worked there over a long period, are qualified and energetic which is important in the growth of the company. The company will set strategies to provide the employees with enough income and other benefits to sustain their enthusiasm and focus on the firm. A total reward strategy should include total compensation, work-life balance, benefits, and training on growth opportunities.
References
Martocchio, J. J. (2015). Strategic Compensation: A Human resource management approaches (8th ed.). Upper Saddle River, NJ: Prentice Hall.
Wilson, J. (2016). Key Components of an effective total compensation strategy. Retrieved from http://compensationinsights.com/key-components-of-an-effective-total-compensation-strategy/
