Compensation & Benefits
Compensation and Benefits in the Twenty-first Century ? Abstract Team platinum will explore compensation and benefits in the 21st century. Any review of total compensation must include the crucial areas of health and retirement benefits and financial compensation, as well as discuss the implications of pivotal changes in the market and demographics which impact organizations and overall performance management issues.
There are several different compensation and benefit strategies that can be combined in innovative ways to meet the needs of the both the organization and the diverse needs of the employees. The proper administration of a total compensation and benefits package is a critical aspect in an organization’s ability to recruit and retain the most qualified applicants in today’s competitive market. ? Table of Contents Abstract2 Compensation and Benefits in the 21st Century4 Compensation4
Base Pay5 Variable Pay6 Benefits7 Retirement & Insurance Benefits9 Benefits Impact9 Advantages and Disadvantages of Retirement Plans10 Insurance Plans Comparison12 Pivotal Change14 Technology14 Generational Diversity15 Trust16 Performance Management17 A Tool for Success18 Shared Expectations18 Advantages and Disadvantages19 Conclusion20 References21 Compensation and Benefits in the Twenty-first Century Many of the leading organizations in the 21st century must be competitive in many ways.
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Due to the fact that a large portion of the money they spend goes to their employees, they must have a system in place that compensates their employees competitively and falls in line with the organizational goals. Organizations must not only determine compensation, but must also determine the benefits that will be offered, consider the changing job market and demographics of the personnel pool, as well as what type of performance management they plan to incorporate in order to succeed. This paper will discuss four segments regarding Compensation and Benefits in the 21st Century.
These four segments include: Compensation is an important aspect of Human Resource Management, Benefits are an integral and important aspect of a total compensation plan, the Changing job market and demographics of the personnel pool have a pivotal impact on Human Resources Management, and Performance management is a key facet of organizational success. It is hoped that a better understanding of compensation and benefits is achieved at the conclusion of this paper. Compensation Webster’s dictionary defines compensation as payment for services such as wages (Webster’s New World College Dictionary, 2006, p. 97). According to the book, Human Resource Management, there are three basic forms of employee compensation; they are base pay, variable pay, and benefits (Mathis & Jackson, 2008). Some companies offer compensation packages where these three forms of compensation are combined or grouped together. The book, Salary Negotiation Tips for Professionals, points out that all employees must know what they are worth and make sure the compensation reflects it (Krannich and Krannich, 2005). The next few paragraphs will break down and discuss each of the three forms of compensation.
Base Pay The first type of compensation is base pay. The textbook, Human Resource Management, defines base pay as the “basic compensation that an employee receives, usually as a wage or salary” (Mathis & Jackson, 2008, p. 361). Most companies use 2 types of base pay and they are either hourly or salary. The way an employee is paid usually goes by the nature of the job. Hourly pay is based on a time scale. The employee will keep some sort of time sheet and will be paid based on the number of hours worked in either a one or two week period and that is called a wage.
Whereas salaried employees are paid a set amount and that amount is the same no matter how many hours they work. Usually only hourly employees can earn pay for overtime worked, but overtime pay can be paid to salaried employees and that is defined by state and federal laws (Mathis & Jackson, 2008). When it comes to an individual trying to figure out how much pay they feel they deserve to be paid, they must consider the job they are applying for and the compensation packages the organization is offering. They must decide what is important to them. Do they want benefits like family insurance, dental insurance, profit sharing or other perks?