Human resources are a crucial component of a business organization that requires the management to take careful considerations to maximize a firm's productivity. Different aspects that pertain to human resource management (HRM) must, therefore, be integrated into the company's operational model and continuously reviewed. This is to ensure that the organization is internally reinforced against the hostile global business environment. Among the key elements are employment, benefits, and compensation. According to the Cambridge Dictionary, employment can be defined as the act of a person working in an organization for pay (“ Employment-meaning in the Cambridge English Dictionary," n.d ). In HRM, an organization has different departments and functions that require people with specialized skills to achieve their objectives. Therefore through employment, such an organization contracts the services of skilled personnel who will discharge the prescribed duties in exchange for payment. Benefits commonly referred to as employee can be defined as the advantages that a business can offer an employee besides the pay that they receive (“ Cambridge University Press- Employee Benefit," n.d ). Such benefits include a car, pension plan, wellness, and healthcare insurance cover. Thus, employee benefit is the added package for the work they have done. Differently, compensation includes both pay and benefits and is closely tied to performance appraisal. The three HRM aspects relate and influence each other, thus ultimately shaping the functioning of the human resource and the productivity of the entire organization.
Employment is often triggered by an organization's needs, which can either be a skills gap or a need to bolster the existing skills set. An underlying factor for initiating an employment process by the human resource department is to have employees who can contribute to the success of an organization. According to Bressler (2014), the world over, successful business strategies profoundly depend on the skills available in a company. The author acknowledges that employees who are committed and motivated can help a firm achieve its goals. As mentioned above, need identification is the preliminary step that an organization's HR department must do. Without need identification, the management risks hiring people with the wrong skillsets. Indeed, the greatest challenge in the realm of employment is ending up with human resources that cannot help the organization achieve its agenda (Bressler, 2014). The hiring and selection process is not the prerogative of the senior management and the HR department but all employees of an organization. Other employees should identify gaps in their teams and provide the hiring authorities with recommendations. The hiring process is often characterized by accompanying details such as salaries, benefits, and compensation packages. These three aspects are inalienable from the hiring process of an organization.
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When a candidate is applying for a vacancy in an organization, salary, and other add-ons such as benefits are top on the motivation list. As indicated above, employment involves one working in exchange for payment. Del Carpio, Nguyen, Pabon, and Wang (2015) note that wages have an impact on employment. Although Del Carpio found an inverse correlation between hiking minimum wage and employment, most people are motivated by the prospects of earning when applying for a job. Companies that offer competitive salaries often find it easier to fill vacant positions than their peers (Bressler, 2014). Salaries, coupled with other benefits such as health insurance and care, make employment in a given company attractive.
Employee benefits are crucial to an organization and its endeavors to accomplish the set objectives. Research has shown that benefits have a direct effect on job performance and employee loyalty, which translates to better financial performance (Klonoski, 2016). Benefits such as healthcare and retirement have been widely incorporated in employment schemes by the different organizations across the globe for a long time. For instance, healthcare as a benefit was widely adopted in the US after World War II (Klonoski, 2016). Eventually, other benefits have come to be included in the employment packages besides the normal salaries. The Society of Human Resource Management (SHRM has in the recent past, prepared an extensive list of employee benefits, which indicates how far employers have come with boosting their employment schemes (Klonoski, 2016). The SHRM’s list includes both cash and noncash benefits as well as items that are desirable for specific job characteristics. Klonoski further acknowledges that these benefits help management teams to create atmospheres that give employees motivation, thus getting the most out of their employment. In the contemporary business environment, it is challenging to alienate terms of employment and employee benefits.
When an organization seeks to hire extra personnel, it has its vision and mission as the underlying motivator. Employment allows a firm to acquire essential human resources who can help achieve the set objectives. However, to achieve this, the management of a business enterprise must ensure that its workers are satisfied with the entire work atmosphere. As mentioned above, compensation refers to both the salary and benefits given to an employee. Nevertheless, compensation comes with extra definitive conditions in that it is tied to job performance. When job satisfaction is achieved, the efficiency of employees increases, which in turn improves the overall performance of the firm (Mabaso & Dlamini, 2017). When an employee performs exemplarily well as compared to his colleagues, his compensation package is consequently bigger compared to those of the rest. Adler and Ghiselli (2015), write that its employee compensation culture greatly influences organizational attractiveness. According to their study, university students have a bias towards organizations that offer attractive compensation packages. This means that employee compensation packages are crucial for employer branding.
In seeking employment, graduates tend to focus their search on the attractiveness of potential employers. Employment is predominantly based on a symbiosis relationship whereby workers offer their skills and expertise while employers compensate with salaries and other benefits as agreed. The entire compensation package of an organization determines the attractiveness of an employer. According to Adler and Ghiselli (2015), factors such as pay, health programs, diversity composition, and training programs, among others, are used by the prospective employee to evaluate organizations. In turn, these aspects define an employer’s brand in terms of desirability. With the current trend of increasing competitiveness in the employment market, it important for organizations to develop strategies geared at becoming the employer of choice (Adler & Ghiselli, 2015). With enhanced compensation schemes, employers will attract highly skilled employees. When competent employees are added to a business’s human resource team, productivity is augmented, which lays a foundation for improved profits.
Salaries and other benefits such as cars, training, and health insurance influence the hiring process. Employers must beforehand evaluate the needs of their organization and hire a worker from the perspective of the resources at their disposal. The compensation strategy of a business institution is a valuable indicator of its internal strengths. Besides, how employees are compensated influences the culture of an organization. A healthy organization is identified by many factors, among them, being employee retention. After conducting a successful recruitment process, the next by the organization is to retain its most productive employees (Onsardi, Asmawi & Abdullah, 2017). When employees feel that their efforts are not appreciated, they may opt to search for better employment opportunities. Retaining talented workers is a substantial employment concern in a lot of businesses (Park, McQuaid, Lee, Kim & Lee, 2019). According to Park et al., factors that affect employee retention have been studied severally in the past. Among these factors is offering competitive compensation packages. Studies have directly linked compensation packages to job satisfaction, which, on its part, influences employee retention. Besides, a company being able to retain its productive employees, compensation packages have been associated with company growth (Park et al., 2019). The more an employee becomes motivated, the more their expertise increases since they want to become creative. This implies that developing and sustaining attractive compensation packages has a host of benefits both to an organization and individual employees.
The idea of compensation in an organization is supported by the reinforcement and expectancy theory. The theory advances that behavior which attracts rewards will probably be repeated in the future (Suciu, Mortan & Lazar, 2013). The implication of wages followed by other benefits will lay a strong foundation for improved future performance. Similarly, when an employee does exemplarily well, but their efforts are not recognized will affect their future performance. Although motivation often requires a desire to act, a capacity to act, and having a goal attached to the projected endeavor, rewards go a long way to trigger a thirst for success. As a process theory, the reinforcement and expectancy philosophy provides that employees are inspired to behave in ways that produce a preferred set of outcomes (Suciu et al., 2013). One acknowledges the hedonistic principles underlying this argument whereby individuals will behave in ways that that will bring the most subjective utility. Therefore, if workers know that excellent performance is rewarded by the employer, then they will strive to achieve optimum performance. However, Suciu et al., (2013), gives a caveat that if employees internalize the provisions of this theory, it will lead to extreme individualization. This cannot be a favorable situation for an organization since unhealthy competition may set in weakening work relationships in the organization. People will want to outdo each other adversely, teamwork, and unity of direction.
In conclusion, employment, employee benefits, and compensation are related, and they influence each other. As human resources aspects, the three have significant roles in the success of any organization. In employment, a person is given work in exchange for payment. Benefits are the added advantages besides the salary given to an employee. Compensation refers to the combined package containing both salary and employee benefits. When an individual is tied to an employee-employer relationship, they are guaranteed a salary as agreed during the hiring process. However, the size of the compensation package can vary depending on the performance of an individual. Therefore it is apposite to conclude that in employment, motivation is a key factor that employers depend on to achieve the set objectives. For a company to employ a person, there must be a need, such as a skill gap that informs such a decision. On the other hand, when a candidate is applying for a vacant position, the allure of benefits and salary is the driving force. Without employee benefits, it would be difficult for a company to retain its top workers. This agrees with the postulates of reinforcement and expectancy theory. The theory holds that behavior that has a gratifying outcome is bound to be repeated in the future.
References
Adler, H., & Ghiselli, R. (2015). The Importance of Compensation and Benefits on University Students' Perceptions of Organizations as Potential Employers. Journal of Management and Strategy , 6 (1), 1.
Bressler, M. S. (2014). Building the winning organization through high-impact hiring. Journal of Management and Marketing Research , 15 , 1.
Cambridge University Press. Employee Benefit. Cambridge Dictionary (4th ed.). Cambridge. Retrieved from dictionary.cambridge.org/dictionary/english/employment
Del Carpio, X., Nguyen, H., Pabon, L., & Wang, L. C. (2015). Do minimum wages affect employment? Evidence from the manufacturing sector in Indonesia. IZA Journal of Labor & Development , 4 (1), 17.
Employment | meaning in the Cambridge English Dictionary. Retrieved 7 December 2019, from dictionary.cambridge.org/dictionary/english/employment
Klonoski, R. (2016). Defining Employee Benefits: A Managerial Perspective. International Journal of Human Resource Studies , 6 (2).
Mabaso, C. M., & Dlamini, B. I. (2017). Impact of compensation and benefits on job satisfaction. Research Journal of Business Management , 11 (2), 80-90.
Onsardi, A., Asmawi, M., & Abdullah, T. (2017). The effect of compensation, empowerment, and job satisfaction on employee loyalty. International Journal of Scientific Research and Management , 5 (12), 7590-7599.
Park, C., McQuaid, R., Lee, J., Kim, S., & Lee, I. (2019). The Impact of Job Retention on Continuous Growth of Engineering and Informational Technology SMEs in South Korea. Sustainability , 11 (18), 5005.
Suciu, L. E., Mortan, M., & LAZĂR, L. (2013). Vroom's expectancy theory. An empirical study: Civil servant's performance appraisal influencing expectancy. Transylvanian Review of Administrative Sciences , 9 (39), 180-200.
