Your assignment is to write a short paper (500–750 words) defining compensation,
compensation philosophy, and critical components of a compensation strategy.
Provide one solid example of an effective compensation practice/policy. Your
paper will be graded on the following:
definition of compensation;
overview of compensation philosophy;
critical components of a compensation strategy; and
example of an effective compensation practice/policy.
Your paper must be prepared utilizing the APA format and should include
external, academic-quality references. See the Syllabus section “Due Dates for
Assignments & Exams” for due date information.
ANSWER:
Compensation
Definition
As defined by Garry Desler, the compensation is all forms of ‘pay’ that goes to
employees, including the additional employment benefits in form of direct or indirect
financial compensations. Compensation is mostly a tool used for attracting, retaining or
motivating the employees.
Overview of compensation philosophy:
Compensation philosophy expresses the organization’s view of about the employee
compensation. It answers the basic questions of ‘Why’ by providing the framework for
consistent compensation management.
The human resource department is responsible for developing the compensation
philosophy in conjunction with executive members. There are several dominating factors
in compensation philosophy, such as the firm’s size, financial position, industry, business
objectives, etc. The philosophy should not be rigid, but it should be consistent that
assures the employees that they are valued. As the economic and financial conditions
force organization to change their compensation philosophy, the company should also
be flexible in making changes to beat the competition and acquire the best workforce
possible.
An effective compensation philosophy should be equitable, defensible, fiscally sensitive,
legally compliant, and easy to communicate, and align with the other offers of the
organization. While developing such compensation philosophy, HR team should
collaborate with the leadership team for their valuable inputs.
compensation philosophy, and critical components of a compensation strategy.
Provide one solid example of an effective compensation practice/policy. Your
paper will be graded on the following:
definition of compensation;
overview of compensation philosophy;
critical components of a compensation strategy; and
example of an effective compensation practice/policy.
Your paper must be prepared utilizing the APA format and should include
external, academic-quality references. See the Syllabus section “Due Dates for
Assignments & Exams” for due date information.
ANSWER:
Compensation
Definition
As defined by Garry Desler, the compensation is all forms of ‘pay’ that goes to
employees, including the additional employment benefits in form of direct or indirect
financial compensations. Compensation is mostly a tool used for attracting, retaining or
motivating the employees.
Overview of compensation philosophy:
Compensation philosophy expresses the organization’s view of about the employee
compensation. It answers the basic questions of ‘Why’ by providing the framework for
consistent compensation management.
The human resource department is responsible for developing the compensation
philosophy in conjunction with executive members. There are several dominating factors
in compensation philosophy, such as the firm’s size, financial position, industry, business
objectives, etc. The philosophy should not be rigid, but it should be consistent that
assures the employees that they are valued. As the economic and financial conditions
force organization to change their compensation philosophy, the company should also
be flexible in making changes to beat the competition and acquire the best workforce
possible.
An effective compensation philosophy should be equitable, defensible, fiscally sensitive,
legally compliant, and easy to communicate, and align with the other offers of the
organization. While developing such compensation philosophy, HR team should
collaborate with the leadership team for their valuable inputs.
