Human Resource Compensation Management

Published Date: 02 Nov 2017

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Compensation Management

Compensation can be defined as what an employee is given as a token of appreciation for what he or she has done or contributed towards the success of an organization. Compensation management can; therefore, be defined as a practice within an organization which puts into consideration the balanced relationship of an employee and the work the employee does. This is done by having the organization provide to its employees both monetary benefits as well as non monetary benefits. This is usually integrated with human resource management, and it helps in motivating the employees of a firm as well as improving the effectiveness of an organization (Kaufman & Helfgott, 2003).

Compensation management can be said to be more than the attraction and retention of talented employees of a firm. For organizations to sustain their competitive position in the competitive labor market, they need to leverage their human capital. This can be done by the integration of employee processes with the processes of the organization and the strategies of the firm so as to achieve the optimal results of an organization. For this to be successful and viable it is; therefore, necessary that a firm develops what is called e-compensation (Kaufman & Helfgott, 2003).

E-compensation can be defined as a policy that is implemented within organizations together with specialized software, which is used by firms to maximize returns on specific talents. It is most relevant when the right people in an organization are rewarded to great extensions with respect to the reason behind the compensation. Gueutal & Stone (2005) argue that the compensation management software is used to maximize the profits per employee or the work an employee does per hour through optimizing the salaries of the employees and their bonuses as well. In this essence, every firm needs an effective human resources management team besides the best computer programmes so as to make compensation management a successful process in the firm.

It; therefore, implies that for a compensation management policy to be ideal, the organization retains the best talent it holds while it attracts new talent within the firm at a minimal turnover. This is because, an effective compensation management policy makes employees of a firm to develop good behavior, which enhances the personal well being of each other and further burnout risk is minimized. E-compensation can be divided into web-based compensation and the client server system (Walker, 2000).

Web-based compensation is an approach used online and it helps an organization in the management, analysis, gathering and storage of information that regards to compensation schemes. Web based applications are necessary in compensation since compensation is a complex field in human resources management, and it is a top priority for most organization officials. The applications are important since they help facilitate the work done in human resource so as to stay competitive in the market today. In the current world, web based compensation and planning has become trendy for most organizations in terms of salary preparation and budget planning. With the use of web based compensation, the management of most firms finds it easier to plan for salaries since most paper work has been reduced (Jackson, Werner, & Schuler, 2012).

Web based compensation program has many benefits to the organization and; thus, the firm is able to stay in its competitive position. One of the benefits of web based compensation is that the compensation program can be accessed at all times of the day. This is also applicable to compensation professionals since they can work form any point to access and process the information. This means that the web based compensation program is applicable to both the employees and the processors in a mobile manner. Employees in this context can be able to view their benefits in the comfort of their homes, and they can also update their profiles from decentralized locations (Jackson, Werner, & Schuler, 2012).

The web based compensation program helps in the streamlining of the flow of work. This means that the implementation and planning of benefits is streamlined, which means that the human resource team has most if their time saved. Having the information about the compensation policies, the description of the program, frequently asked questions and their answers as well as news compensation forms saves time that the teams would have used in responding to questions about the compensation program (Kaufman & Helfgott, 2003).

On the other hand, the client server system is made up of two logical parts; a server and a client. According to Kaufman & Helfgott, the client server generally provides the service while a client requests for the service (2003). These two parts can run at the same time, but from separate machines by use of a network. This; hence, helps users of the system to access information from their homes.

The significance of the client server system is that it helps two separate units that are specially designed to perform a task; to work together at the same time, on different hardware, and application software as well as operating systems to give a solution to a problem. Just like the web based compensation system, the client server model also has its advantages and disadvantages to an organization (Walker, 2000).

The advantages of the client server model of human resource management are several and make the services reliable. The client server model is advantageous because its system is centralized; hence, making the information provided by the server uniform and reliable. The system has a centralized control mechanism where for a party to access any information, it has to be released from the server. The centralization policy also makes it easy to access files since they are placed, but the same place, which makes the management of files easier for the team (Gueutal & Stone, 2005).

In case of data loss, the backup and recovery process for information on a client server system is easy. This is because; all files are stored at a central place making it easier for backup. The client server system can be easily upgraded making it easier to make changes on the system. The changes made on the server can also make it possible for new systems and resources to be added (Gueutal & Stone, 2005).

The accessibility for client server system is reliable from any network. This is because in cases of new information being uploaded to the database, it can be accessed easily because of the centralization factor. This is important because changes only need to be made to the main server and they will be reflected to any client’s machine. The security for the client server system is reliable since, the clients need to have authority to access information from the server. It also follows that at the time when the server is being set-up, the rules that defines the systems security are then made (Walker, 2000).

The system also has its disadvantages in the sense that there may be registered cases of congestion when the clients are many. This is because the servers may break down if the clients requesting service overload the system. Management and installation of this kind of system is quite costly for the organization. This is because, the management and maintenance of this system needs professional IT specialists who may require a high pay (Gueutal & Stone, 2005).

In relation to management, the best system to be used in the organization is the web based compensation since all clients can access information without the use of specialists within the firm, which makes work easier and; hence, cutting down costs for the company.

For human resource managers to be able to determine the value of market data, several strategies have to be put in place. One main strategy that the human resources mangers are supposed to use is that they have to gather background information in relation to the compensation scheme. This means that they have to identify the reason as to why the system in use was developed, the time when the system was developed and to what extent was the system effective in relation to its initial structure. It is vital that the human resources manager articulate the compensation policies, and then from the existing policy, he or she should develop a new policy whose design can serve the organization well (Jackson, Werner, & Schuler, 2012).

According to Jackson, Werner, & . Schuler, another significant strategy for the human resources mangers to observe is the definition of the compensation policy (2012). This is because a compensation policy that is well defined helps in the achievement of the organizational goals. The strategy links the mission and vision of the organization in many ways. The final strategy necessary to be used by the HR team is to survey the market for the best tools for compensation that will put the firm in a competitive position. By this, the human resources team needs to understand how economic labor forces affect the labor market with respect to forces of demand and supply.

The human resources management team experiences some barriers for it to be able to use web bases equity tools within the firm. One of the barriers is the priorities of the top management within the firm. The top management of the organization has its main concerns based on personal interests, the greed for power and maintaining control of the firm. The top management places these personal interests ahead of the firm’s needs hence making it difficult for the HR team to implement the web based system (Gueutal & Stone, 2005).

Another barrier to the effectiveness of the human resource team and web based system of compensation is that there are training deficiencies within the organization. The lack of knowledge in the use of human resource programmes may be a barrier since staff does not understand the effect of the programmes to the organization. In this sense, skeptics may arise from members of the organization against the initiatives of the human resources team (Jackson, Werner, & Schuler, 2012).

In conclusion, e-compensation is a process that most firms must employ today for the success of the firm in the competitive labor market. This; however, may be challenging if the staff of the organization does not understand the impacts of the initiative within the firm. For this to be successful, the firm has to create training facilities for its staff to be well educated about the implications of web based systems of compensation.