Compensation Systems, Job Performance, and How to Ask for a Pay Raise
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Employee Compensation To encourage work productivity and work engagement, some employers give total-reward incentives to employees in the form of salary, benefits, and bonuses. Gagne and Forest (2008) articulated that employees receive compensation as payment for their work accomplished, and the reward is a mixture of fringe benefits (e.g. health insurance, company car) and monetary value. Applebaum and McKenzie (1996) stated that compensation is used to reward, preserve, and influence employees; while Gross, Bundy, and Johnson (2011) argued that some companies say they attract, retain, and motivate their employee with total-rewards that include work-life balance, and career development. Total-rewards are not always maintained to meet the employee's standards, and the lack of the total-rewards may cause some worker to move to other organizations. On the other hand, some new employees negotiate their compensation and benefits package they think is equitable for their specific job requirements before they accept a new job responsibility. Additionally, other employees may accept the compensation package their employers give them without any negotiation, as some may not know the value of negotiation while others may feel intimidated to negotiate a comfortable rewards package. Economically, employees cannot sustain the same salary from year to year without an increase. This is because, for decades, the cost of living increases annually, and the adjustment in salary on an annual basis helps the employees balance the higher cost of living. Ramamoorti and Balakrishnan (2010) discussed that a strategy for most organizations to maintain a good relationship with its employees is to provide a compensation program that steadily grows and one that matches the organization's profile. Lawler (1995) articulated that compensations should be devised to get the employees who have the skills that the organization needs and the pay system should be applied with equality and compassion. Organizations that demonstrate to its employees that it cares about their welfare and meeting the employee's goals are sustainable organizations that will last a long time. To provide the right compensation packages for employees, organizations must have a plan in place that allocates the needed funding on an annual basis to pay for employees' compensations. Lawler, (1995) explained that organizations use business strategies to guide the goals of the firm, and it is through the business strategies that the plans for employee rewards funding are allocated. On another note, Appelbaum, and Mackenzie (1996) explained that the mission and the visions of a business can be used to create the compensation structure. In light of these discussions, a certain percentage of the firm's profit earnings should be used to reward its employees annually and should be set aside and not used for other business needs. In order to handle incremental changes that organizations go through, and for the organization to progress, the needs of the employees must be met, so they are satisfied with their remunerations. Giving employees the pay they are worth, allows them to put full effort in their responsibilities to keep the firms running smoothly. Gagne and Forest (2008) stated that “when employees enjoy their job and are engaged, they reach optimal performance and optimal functioning” (p. 225). On the other hand, Sita and Pinapati (2013) articulated that it is through competency that an employee's performance is improved. Employees who are satisfied with their salary and benefits take care of the assets of their organization more appropriately than those who are dissatisfied and disgruntled. It is, therefore, a necessary endeavor for the organization to have a balanced connection to the employee. Every organization has a different plan of how their compensation is set up. Lawler (1995) argued that some employees choose an organization based upon the type of reward it offers, and a higher volume of employees are attracted to companies that offer more rewards. Levy, Mitchell, Guled and Guled (2010), suggested that public sector employees in the United Kingdom (UK) receive better compensation such as pay and pensions than their counterparts in the private sector. Sometimes, companies pay more rewards because the organizations are more demanding of its employee's time, effort, and commitment. These organizations may need longer work hours, have worked schedules that are outside of a 9:00 AM-5:00 PM schedule, or have a high volume of travel on a frequent basis.
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About the Book
Employees perform assigned tasks, and the organization pays them for their work productivity. Compensation involves an exchange of labor for pay and benefits, and both the employer and the employee gain value from this transaction. Compensation is comprised of many different types of rewards and recognitions. Reward systems include base pay, incentive, merit, vacation, sick pay, health insurance, and such things as cell phone, housing, or car allowance. Recognizing employee work contribution and acknowledging their accomplishments through service excellence, service awards, and other valuable appreciation helps to motivate the workforce. The organization supports an employee’s productivity through motivation, stimulation, self-improvement, and a commitment from the employer. Compensations and rewards are sizeable expenses for any organization. Therefore, they must be handled carefully. Some organizations are unable to attract the right talent because their compensation and benefits programs are not reasonable. Today organizations are focusing on core competencies and pay for performance for their employees. Therefore, employees should know that developing their skills, being team players, solving problems, and exemplifying leadership are some of the core competencies that organizations look for in making hiring and promotions decisions. Every employee should understand the organization’s mission and goals and how their employment is connected to these. Employees should also know that their job responsibilities are linked to the need of the organization and that employees should possess the right skills, knowledge, and abilities to help achieve organizational objectives. Employers should reward and compensate their employees appropriately for their work efforts. In this regard, employers should understand that the pay workers receive is connected to their productivity, motivation, inspiration, and turnover. This book provides a clear understanding of the various rewards system many organizations may offer. It also outlines the connection between compensation, benefits, and employee motivation. Finally, it teaches employees how to ask for a pay increase. 360 Performance Solutions 360performancesolutions.com 813-474-2058
About the Author
About the Author Paulett Hemmings is the CEO of 360 Performance Solutions (360performancesolutions.com) consulting company, and she teaches business professionals how to be outstanding leaders. Her area of expertise is organizational improvement and human resource management. As an undergraduate, Paulett attended Pace University in New York, where she received her BBA in general management. She furthered her studies and graduated from Long Island University, New York, with an MBA in management. Paulett earned her PhD in organization and management from Capella University and recently graduated with a post-doctorate certificate in human resource management from Walden University, Minneapolis. Some of Paulett Hemmings’s professional affiliations are the Society for Human Resource Management (SHRM), American Society for Quality (ASQ), National Association of Professional Women (NAPW), and American Association of University Professors (AAUP). Paulett is a NAPW VIP member and received the 2015–2016 Professional Woman of the Year Award for outstanding leadership and commitment within her profession.