Compensation is an employer's response or feedback on an employee's well-done job (Nazir, 2010). Payment can be in the form of monetary value or employment benefits such as health insurance coverage and retirement benefits. However, some pros and cons are associated with compensation and its effect on employee behaviors.
Compensation leads to job satisfaction among employees. It is always peoples' expectation that employees get impressed with their job if they enjoy fair settlements in exchange for their work input. Also, compensation is a source of motivation amongst employees. Employees are more likely to consider firms that offer good pay and exposes them to higher chances of getting promoted.
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There are some limitations of employee compensation. Employee compensation can brew employee rivalry rather than fostering and encouraging teamwork (Nazir, 2010). In this scenario, the employees will be discouraged from working with each other, thereby causing inefficiencies in production.
Several factors motivate employees in an organization (Olusadum et al., 2018). Firstly, appreciation and recognition for a job well done is an essential factor that motivates an employee. Employee recognition plays a vital role in making them feel good about their accomplishments. Secondly, having an Understanding attitude as a manager is very important. Such an attitude is critical in determining how best to treat and correct employees when they make mistakes. Constant manager-employee interaction is a crucial motivational factor. Moreover, this motivational factor can be valid if employees get corrected more respectfully and tactically.
The effort that an employee exerts in an organization is mainly dependent on motivation. Employees who are motivated and are also efficient in their duties form the basis of a successful organization. The pay for motivational performance strategy has the most significant impact on boosting employee performance and motivating their behavior. An employee's commitment to achieving a particular performance goal can be more substantial if the compensation's nature is practical and appealing to them. As a result, this can become a norm for the employees and may motivate their job, thereby influencing their working behavior.
There are several elements of compensation that a firm needs to focus on to realize its actual market value. Compensation's typical components include; base salary, bonuses, insurance and benefits, and employee perks. A base salary is a payment that an employee gets regularly. A Bonus gets paid only when an employee accepts a job and performs it according to the required standards. Bonuses get paid based on merit plan. Insurance and benefits entail medical and dental life insurance and retirement packages. Lastly, employee perks may include discounted concert and movie tickets and free entry to cultural venues.
Compensation is a fundamental key to attracting and retaining an organization's top talents (Olusadum et al., 2018). A company can attract top talent through highly competitive salaries and benefits. Employees would only want to associate themselves with an organization that pays well. In a study conducted by the Office Team, 44% of the correspondent stated that they were willing to exit their current workplaces for jobs that had better pay. Workers will always want to be compensated for a job well done. To retain an organization's top talents, employers can be open to payment negotiations.
In conclusion, there are certain employee behaviors that compensation ought to reinforce. Reinforcement is a strategy of strengthening the most admirable actions and countering the least desirable ones in an organization (Wei et al., 2014). Initiating this strategy demands offering perks and rewards to hardworking employees who observe work ethics. Reinforcement can either be negative or positive, depending on the nature of the behavior. Behaviors that can be countered by negative reinforcement include; late show up at the workplace, laziness, and carelessness. Positive reinforcement always focuses on the positive attributes of an employee.
References
Nazir, N. (2010). Compensation and benefits: Definition and importance. Retrieved September 15 , 2014.
Olusadum, N. J., & Anulika, N. J. (2018). Impacts of Motivation on Employee Performance: A Study of Alvan Ikoku Federal College of Education. Sigma , 1 , 1.
Wei, L. T., & Yazdanifard, R. (2014). The impacts of positive reinforcement on employees' performance in organizations. American Journal of Industrial and Business Management , 2014 .
