0
What is the impact of compensation and benefits on employee performance?
Wiki User
∙ 12y ago
When you get hired for a job compensation and benefits are already in place at certain pay gradesdepending on the employer. If you transfer from a job you can ask for a certain rate of pay and whatever benefit packages they have you choose from. Depending on your job you can command a certain pay and benefit package, those are very lucrative jobs. The benefit package offered at alot of jobs is worth alot. Even though you may not see it in a pay check. For example, my husbands joy(a city job) has benefits that add up to $9,000./year for a family of 3. We only pay $1,800.00 per year in deductions and the insurance is out of this world. Employers that have fewer employees that package would not be the same because the insurance pool would be low. Whenthere are 30,000 employees, the insurance would be better because those 30,000 people split the cost of the insurance among them. If a company has 10 employees and want insurance they would pay lots more out a year than we would. The employees performance is also graded on a scale fromlets say 1-10 if your evaluation is high then you would command the top part of the percentage of the raise range, if not you would get less.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What are the Facilitating and inhibiting factors of company that impact performance of employee?
3d modelling
What is the relationship between employee performance evaluation and employee compensation?
Performance management is a process by which managers and employees work together to plan, monitor and review an employee's work objectives and overall contribution to the organization. Today there are number of performance management software are present in the market. Performance management software also helps track employee performance against business objectives to easily track skills and increase competencies for areas that will have the greatest impact. There is one of the best performance management software from cornerstone you can tryperformance management software is a hit nowadays since it can be used totrack the performance of individual employees. performance monitoring software is the most popular software offered b us to out clients. smartmanager.com.qa
Why is job design an important activity?
Job Design can impact employee performance - there are some jobs where employee motivation is a crucial factor to performance, and the right motivation may be a result of good job design. _Warlen La Gera
The impact of leadership style on employee satisfaction job performance?
Leadership styles that empower employees and provide them with a sense of autonomy improve job satisfaction. Authoritarian leadership styles often decrease employee satisfaction.
What is the impact of an employment contract on employment-at-will?
An employment contract dictates the conditions of employment, such as salary, vacation, benefits, etc. An "at will" employee serves at the pleasure of the employer, meaning their employment can be terminated at any time, for any reason, or for no reason at all. The effect of an employment contract on an at-will employee would be to set salary, benefits and so on as long as the employee worked at that employer.
What is comparative benchmarking?
Comparing benchmarks to assess how companies compare to industry, regional and/or national norms. Whether it's measuring financial performance, employee benefits, product pricing, or other key metrics, competitive benchmarking can directly impact corporate performance, reputation and brand image. With the right information, business practices can be adjusted or maximized to increase productivity and customer confidence.
The impact of management information on an organisation performance?
The impact of management and information system on organizational performance
What is the impact of effective business communication to managerial performance?
What is the impact of effective business communication on managerial performance
Dissertation topics on human resource management?
these are as follows:Role of Training and Development in any organizationEffects of Organizational changeWhy HR department is necessary for an organizationRole of HR department in an organization's growthetc, etc.reply for more
How the changes in employee relations impact employment relationship?
The employer-employee relationship is a significant human relationship based on mutual dependency. Changes in employee relations have a great impact on both the employer and the employee. Both the employer and employee have obligations that arise from their relationship.
What are the welfare schemes provided the company?
= EMPLOYEE COMPENSATION =incentive plan - Find an Incentive Reward Program For Your Company Online Here. (www.IncentivePlan.net)Recognition Certificates - Easy Recognition Certificates See Examples. Try it Free! (www.SmartDraw.com)Employee incentive - Online Reward & Incentive Programs Free For Small & Medium Companies. (SparkPeople.com/Healthy_Employees) Compensation is a primary motivator for employees. People look for jobs that not only suit their creativity and talents, but compensate them-both in terms of salary and other benefits-accordingly. Compensation is also one of the fastest changing fields in Human Resources, as companies continue to investigate various ways of rewarding employees for performance. It is important for small business owners to understand the difference between wages and salaries. A wage is based on hours worked. Employees who receive a wage are often called "non-exempt." A salary is an amount paid for a particular job, regardless of hours worked, and these employees are called "exempt." The difference between the two is carefully defined by the type of position and the kinds of tasks that employees perform. In general, exempt employees include executives, administrative and professional employees, and others as defined by the Fair Labor Standards Act of 1938. These groups are not covered by minimum wage provisions. Non-exempt employees are covered by minimum wage as well as other provisions. It is important to pay careful attention to these definitions when determining whether an individual is to receive a wage or a salary. Improper classification of a position can not only pose legal problems, but often results in employee dissatisfaction, especially if the employee believes that execution of the responsibilities and duties of the position warrant greater compensation than is currently awarded. When setting the level of an employee's monetary compensation, several factors must be considered. First and foremost, wages must be set high enough to motivate and attract good employees. They must also be equitable-that is, the wage must accurately reflect the value of the labor performed. In order to determine salaries or wages that are both equitable for employees and sustainable for companies, businesses must first make certain that they understand the responsibilities and requirements of the position under review. The next step is to review prevailing rates and classifications for similar jobs. This process requires research of the competitive rate for a particular job within a given geographical area. Wage surveys can be helpful in defining wage and salary structures, but these should be undertaken by a professional (when possible) to achieve the most accurate results. In addition, professional wage surveys can sometimes be found through local employment bureaus or in the pages of trade publications. Job analysis not only helps to set wages and salaries, but ties into several other Human Resource functions such as hiring, training, and performance appraisal. As the job is defined, a wage can be determined and the needs for hiring and training can be evaluated. The evaluation criteria for performance appraisal can also be constructed as the specific responsibilities of a position are defined. Other factors to consider when settling on a salary for a position include: * Availability of people capable of fulfilling the obligations and responsibilities of the job * Level of demand elsewhere in the community and/or industry for prospective employees * Cost of living in the area * Attractiveness of the community in which the company operates * Compensation levels already in existence elsewhere in the company There are many federal, state, and local employment and tax laws that impact compensation. These laws define certain aspects of pay, influence how much pay a person may receive, and shape general benefits plans. The Fair Labor Standards Act (FLSA) is probably the most important piece of compensation legislation. Small business owners should be thoroughly familiar with it. This act contains five major compensation laws governing minimum wage, overtime pay, equal pay, recordkeeping requirement, and child labor, and it has been amended on several occasions over the years. Most of the regulations set out in the FLSA impact non-exempt employees, but this is not true across the board. The Equal Pay Act of 1963 is an amendment to FLSA, which prohibits differences in compensation based on sex for men and women in the same workplace whose jobs are similar. It does not prohibit seniority systems, merit systems, or systems that pay for performance, and it does not consider exempt or non-exempt status. In addition, the United States government has passed several other laws that have had an impact, in one way or another, on compensation issues. These include the Consumer Credit Protection Act of 1968, which deals with wage garnishments; the Employee Retirement Income Security Act of 1974 (ERISA), which regulates pension programs; the Old Age, Survivors, Disability and Health Insurance Program (OASDHI), which forms the basis for most benefits programs; and implementation of unemployment insurance, equal employment, worker's comp, Social Security, Medicare, and Medicaid programs and laws. For the most part, traditional methods of compensation involve set pay levels (wage or salary) with regular increases. Increases can be given for a variety of reasons, but are typically given for promotions, merit increases, or cost of living increases. The Hay Group points out that there is less distinction today between merit increases and cost of living increases: "Because of the low levels (3 to 4 percent) of salary budget funding, most merit raises are perceived as little more than cost of living increases. Employees have come to expect them." This "base pay" system is one that most people are familiar with. Often, it includes a set salary or wage, a set schedule for merit increases, and a set benefits package. Benefits are an important part of an employee's total compensation package. Benefits packages became popular after World War II, when wage controls made it more difficult to give competitive salaries. Benefits were added to monetary compensation to attract, retain, and motivate employees, and they still perform that function today. They are not cash rewards, but they do have monetary value (for example, spiraling health care costs make health benefits particularly essential to today's families). Many of these benefits are nontaxable to the employee and deductible by the employer. Many benefits are not required by law, but are nonetheless common in total compensation packages. These include health insurance, accidental death and dismemberment insurance, some form of retirement plan (including profit-sharing, stock option programs, 401(k) and employee stock ownership plans), vacation and holiday pay, and sick leave. Companies may also offer various services, such as day care, to employees, either free or at a reduced cost. It is also common to provide employees with discounted services or products offered by the company itself. In addition, there are also certain benefits that are required by either state or federal law. Federal law, for example, requires the employer to pay into Social Security, and unemployment insurance is mandated under OASDHI. State laws govern worker's compensation. As businesses change their focus, their approach to compensation must change as well. Traditional compensation methods may hold a company back from adequately rewarding its best workers. When compensation is tied to a base salary and a position, there is little flexibility in the reward system. Some new compensation systems, on the other hand, focus on reward for skills and performance, with the work force sharing in company profit or loss. One core belief of new compensation policies is that as employees become employee owners, they are likely to work harder to ensure the success of the company. Indeed, programs that promote employee ownership-and thus employee responsibility and emotional investment-are becoming increasingly popular. Examples of these types of programs include gain sharing, in which employees earn bonuses by finding ways to save the company money; pay for knowledge, in which compensation is based on job knowledge and skill rather than on position (and in which employees can increase base pay by learning a variety of jobs); and incentive plans such as employee stock options plans (ESOPs). PAY FOR PERFORMANCE Probably the most popular of the newer concepts in compensation is the easiest to understand-compensation based on performance. These programs, sometimes referred to as variable pay programs, generally offer compensation incentives based on employee performance or on the performance of a team. Pay for performance rewards high performance and does not reward mediocre or low performance, and is the definition of the "merit" system. In a true merit based system, there are a few conditions which must be satisfied for it to be meaningful: * Employees must have control over their performance. If employees are overly dependent on the actions and output of other employees or processes, they may have little control over their own performance. * Differences in performance must mean something to the business. If there is little difference between a high performer and a mediocre one, merit pay won't work. * Performance must be measured regularly and reliably. A clear system of performance appraisal, with defined criteria that are understood by the employee and regularly scheduled meetings must be in place. Compensation programs and policies must be communicated clearly and thoroughly to employees. Employees naturally want to have a clear understanding of what they can reasonably expect in terms of compensation (both in terms of monetary compensation and benefits) and performance appraisal. To ensure that this takes place, consultants urge business owners to detail all aspects of their compensation programs in writing. Taking this step not only helps reassure employees, but also provides the owner with additional legal protection from unfair labor practices accusations.
How you can impact or contribute to the business?
An organizational leader contributes, impacts, to the business by fostering a team atmosphere, having an open- door policy, and praising employees for outstanding performance. Assist others. If an employee needs help, share your knowledge. Also, share the credit. An employee's problem, on or off the job, hampers performance. If you're there for him/her, he/she will be loyal to you, the organization. Praise an employee for a job well done. It shows employees that you care, and they are important too.
