Discussion 1: 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. Respond to two classmate’s post Classmate 1 post: The general goal of an organization’s compensation system is to motivate employees, attract the best employees, and to retain the employees best suited for a specific fob or task. The compensation system also helps an organization to stay in compliance with the pay laws that was set forth by government. In today’s work environment many individuals are wanting to work in an organization that will compensate them for the job duties or task that they are performing within the organization. Many compensations systems include both the intrinsic and extrinsic rewards that an employee can receive for performing certain duties or task according to their effort to achieve the duty or task, the skill that they have to do the duty or task, and the responsibility they have in the organization. The business strategy in an organization involves working with the Human Resource department in order to help develop a compensation plan that will bring in the right employees. Also the business strategy works with the Human Resource department by helping the organization to grow with an effective compensation system. Organizations offer compensation in order to retain the right individuals for employment, this is a very intense system. Organizations must develop a compensation system that is much better than their competitors. ReferenceMartocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.). Retrieved from https://content.ashford.eduClassmate 2 post: An organizations compensation system is made up of both intrinsic and extrinsic rewards that employees get for performing their job and for the membership as employees (Martocchio, 2017, Section 1.1). While intrinsic rewards are important (which come from a personal feeling of satisfaction and believing your job matters), compensation professionals tend to focus more on the extrinsic aspects that center around monetary (pay) and non-monetary (ie. benefits) rewards (Martocchio, 2017, Section 1.1). Ultimately, the goal of the compensation system is to provide a total compensation package, both monetary and non-monetary, that attracts and keeps top talent while also allowing the business to remain competitive. Over time, the compensation strategy has worked to support the organizations business strategy as well. The business strategy refers to the planned use of company resources – financial capital, equipment capital and human capital to promote and sustain competitive advantage (Martocchio, 2017, Section 1.1). Of these resources, HR, and therefore compensation specialists, focus on the human capital aspects, which are the employees within the company. Compensation professionals support the business strategy by integrating the goals of compensation with the goals of the organization and seeks to add value by expanding both its strategy and high-level corporate participation (Martocchio, 2017, Section 1.2). What this means is that the plan and structure in which employees are compensated for their work must be in line with the overall organization and goals and must work to support the goals. For example, if a company claims to be the leader or best at something, the compensation plan needs to be able to support his as well otherwise the highly-skilled employees that are required to support this statement may look elsewhere, which will impact the companys ability to remain competitive. Martocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.) [Electronic version]. Retrieved from https://content.ashford.edu Discussion Two: Discuss the various factors that influence a companys competitive strategies and compensation practices. Assess how a company can mitigate these factors using effective compensation practices. Respond to at least two of your fellow students postings. Classmate 1 post: As stated in my last discussion payment policies effect business practices through its plan and execution of the compensation method to emphasize the goal of the HR tactics and competitive corporate tactics. The benefits and compensation managers labor with the head HR manager and the businesss (CFO) which is also known as the chief financial officer to put in order completed compensation policies. Some of the strategies also include differentiation, low cost, cost leadership and so much more. Differentiation plans included cost, technology, customer service, branding image and or features and design. Customer are loyal to the brand when he and or she is familiar with company and is also satisfy with the service and product. Customers are also likely to stick with the brand he and or she knows even if the prices may increase slightly. Low cost plan and cost leaderships competitive advantages concentrates on being cost effective in production and service (Martocchio, 2017).Businesses centers it approach and preparation on the ecological scanning happenings. These strategies are migrated through the firms being able to be aware of risks and opportunity. One of the key emphases is of the ecological scanning. A risk proposes a bad circumstance in which deficit is expected and over which a person has moderately no authority. An opportunity suggests an optimistic circumstance in which state is probability and over which a person has a reasonable extent of power over (Martocchio, 2017).One example that the book illustrated a competitive advantage being used in business was the one with US businesses and the Saudi Arabia businesses. Several gas and lubricant extraction corporations in the America presently confronted with risks to distribute and profitability as the source of emollient universal is growing more rapidly than the request for it. Saudi Arabia, is leading lubricants as one of the top manufacturing nations in the biosphere, carry on in to pouring unpolished lubricant, fundamental to a surplus. In the past, Saudi Arabia restrained lubricant manufacture, which steered to a drop in the supply relative to needs, piloting to higher costs. The Saudis has pull out from corporate as normal as an opponent with America energy businesses expanding. Pulling out and cultivating practices in America are very pricey than in a lot of other nations, counting Saudi Arabia, which jeopardize the competitive advantage of the America based corporations removing and lubricant refining conducts in America (Martocchio, 2017).ReferencesMartocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.). Retrieved from https://content.ashford.eduClassmate 2 post: There are a few different strategies that can be used when implementing a compensation plan. Two strategies that are mentioned in the text are lowest-cost and differentiation (Martocchio, 2017). A lowest-cost strategy is used for a company who may have a lot of competition and needs to be able to produce items or services at a low cost. This would likely be used for a company that makes low-tech items that do not require a high level of skill or experience. For example, a company like McDonalds, who needs to keep prices low to due to the extreme amount of competition, would was to use low-cost talent.A differentiation strategy is used by companies with less competition. A company like Apple, who needs highly skilled employees to make high tech products. These candidates will need a large compensation package, which could offer large amounts of salary, vacation, 401k, stock, etc to entice candidates to not consider other companies. These candidates are harder to find and will need more convincing that low-tech employees.A company may even have a need to use both strategies – one for high level development, and one for low level assembly. By knowing what is needed, a company can better create a strategy(s) to best attract and retain appropriate talent.Martocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.). Retrieved from https://content.ashford.eduWeekly Lecture: Welcome to BUS 681 Compensation & Benefits. Throughout this course, you will gain an in-depth knowledge into compensation theories, policies, systems and practices with emphasis directed towards designing effective compensation programs. Overall, this course will provide knowledge of the art of compensation practice and its role in promoting companies competitive advantage. Additionally, this course will examine the context of compensation, the criteria used to compensate employees, compensation design systems, employee benefits, and the contemporary challenges organizations will face in the future. In Week 1, this course will provide an overview of compensation systems as well as assess compensation strategies and their impact on an organization. Strategic compensation is a human resource management approach employers use to attract, retain, motivate and grow talented employees as organization’s goals and objectives are maintained. The importance of a strategic compensation approach is to meet the organizations goals but to also obtain a competitive advantage. Since the early 1980s, there has been increased recognition in the business field that human resources contribute to the competitive advantage of an organization (Martocchio, 2017). A competitive advantage results from having the right employee working in the organization. Therefore, to have the best employees, they need to recruit and maintain said employees via a competitive compensation package.When HR professionals are deciding on a strategic compensation policy there are a few questions that need to be asked including:Is compensation strategy suitable for the overall objectives of the competitive business and HR strategies; Is the choice and design of the compensation practice suitable for the compensation strategy; and Does the implementation of the compensation practices effectively increase employee job performance?(Martocchio, 2017). Additionally, organizations should understand the workforce theyre looking to attract, have a realistic budget in mind and be able to implement the compensation plan in a way for all employees to understand regardless of learning style. The total compensation package is made up of both extrinsic and intrinsic rewards. An intrinsic reward includes personal achievement, professional growth, sense of pleasure and accomplishment. An example of this will be training and considerations the organization would make to improve the self of an employee. Overall, it is the value employees receive from doing their job. While extrinsic compensation is a tangible reward such raises, or other mandatory or discretionary benefits. Most employees are more familiar with the extrinsic rewards are it may deal with retirement plans, health insurance, and/or bonuses. Overall, for an organization to retain the right employees, it is important to pay the employee a competitive wage and compensation package. Accordingly, an organization shall have a competitive strategy which includes a competitive compensation and benefits package when it comes to retaining and motivating their employees. However, not all employees will be interested in the same compensation and benefits package. For example, an employee who is more focused on retirement may be more interested in a retirement plan as opposed to an employee who is more interested in their wages to pay off student debt. Therefore, the organization will not have a one stop shop when it comes to compensation packages for all employees. This is also true from organization to organization; as each will have a compensation and benefits package that will not be the same as a similar organization. Overall, an organization will strategically develop a compensation and benefits package that will best suit the needs of the organization and the employees. Its important to be creative during the process to ensure theyre meeting the intrinsic and extrinsic need of the employee as well as organizational goals. Every organization wants to recruit and maintain the best employees for its business and doing so requires a competitive compensation package as employees will compare packages while considering a potential place of employment.Please review the HR Basics: Employee Benefits (Links to an external site.) video which will provide an overview of employee benefits.ReferencesGregg Learning. (2017). HR basics: Employee benefits (Links to an external site.) [Video file]. Retrieved from https://www.youtube.com/watch?v=5fX9eQubzEEMartocchio, J. (2017). Strategic compensation: A human resource management approach (9th ed.). New York, New York: Pearson.
Organization’s compensation system
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