Original Question: Discuss the general goals of an organization’s compensation system, including how a compensation strategy works to support the organization’s business strategy. Respond to at least two of your fellow students postings.
Response 1 – .5 Page: Wendy Phillips –
Compensation refers to the rewards that workers get for doing their work. The reward can either be extrinsic or intrinsic compensation. Intrinsic compensation is an employees psychological mindset for performing their duties. Extrinsic compensation includes the workers pay or wages and benefits, like vacations (Martocchio, 2017).
Compensation has different goals in an organization and works to support the business strategy. Compensation is in form of intrinsic and extrinsic rewards that workers get for doing their jobs well. Basic goals of an organizations compensation structure are attracting, motivating, and retaining employees while making sure that compensation laws are followed at both state and federal levels (Martocchio, 2017). The main aim of a compensation strategy is to give the correct rewards for the right employee behaviors. Compensation strategies help to attain the desired organizational culture. For these rewards to have the intended effect, compensation must directly reflect the strategic business objectives of the organization.
Organizations can provide the correct combination of benefits of non-cash compensation, which motivates employees and will likely ensure their retained services (Martocchio, 2017). Workers are rewarded by non-monetary and monetary compensation. Monetary compensation include benefits like bonus, salary, dental and medical benefits, commission, retirement befits, and holidays. Non-monetary rewards are meaningful and challenging work, recognition and career advancement. Ensuring the organizations compensation strategy attracts and retains great employees enables a successful business strategy. Employees get motivated and work to deliver the organizations goals and plans.
Response 2 – .5 Page: Wilfredo Valentine –
Compensation is always important to any employee. Compensation is one of the main reasons that job seekers choose to work for specific organizations. Benefits is usually second. According to Martocchio (2017), compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs and for their services as employees. Intrinsic compensation includes the non-monetary benefits like feeling good for the job one has performed. Extrinsic compensation includes monetary and non-monetary rewards. For example, hourly pay, benefits, and bonuses.
Compensation is a key part of the company’s strategy. Both intrinsic and extrinsic compensation are a big part of a company’s strategy. Every employee is different and as so, is motivated in different ways some monetary and some non-monetary. The main goal of a company in terms of people is to attract, motivate, and retain top talent. For example, compensation helps attract talented individuals with above benchmark wages. This helps attract top talent from the competition. Also, compensation plays a key role in employee retention. According to SHRM (n.d.), to retain top talented Individuals, the company’s compensation must lead the market, tailor rewards to individual needs, and explicitly link rewards to retention. By focusing on these key elements of compensation, companies will be able to retain employees, stay competitive, meet goals, and stay profitable.
