Total Compensation Methods Essay Example | Topics and Well Written Essays - 750 words

Total Compensation Methods - Essay Example Compensation and benefits, like we all know are rewards that an organization gives to its employees in return of their efforts and services that they have given. These rewards may vary from direct to indirect forms. There are various methods to compensate employees and each method and benefits may have its own impact on the employees and on overall the organization, and this is what we are going to discuss below. This is one method of compensating those employees who have certain needed skills, whether job related or not. This is a creative way of paying for the internal skills and gives a flexible job design, where employees could move from one assignment to another on periodic basis. This is another method of compensating employees. Here those employees are compensated who are the key performers. They are though paid within a certain pay range. The organization here does not need to promote its employees, as they would already be paying them more comparatively. Broadbanding normally provides flexibility, entrepreneurial management style and performance orientation. Provides flexibility to the employees, promotes lateral development of employees, helps in developing employees skills and encourages a team focus and directs employees attention away from vertical promotional activities. Impact on organization It make compensation system more simpler that de-emphasizes structure and control and places greater importance on judgment and flexible decision making. Group Incentives, Gain Sharing, Success Sharing These are other methods of compensating employees. Here the compensation, which is the certain amount of profit of the organization, is given not to one but a group those employees who are identified directly with the improvement. The key here is to share the success of the organization with the employees. Impact on employee When the employees see that gain sharing supports a true pay for performance culture, hence they see their progress linked directly to the organization. The commitment to the organization is thus increased. Impact on organization Many organizations already having gain sharing as their means of compensating employees and have found an improved organizational communication, especially between labor and management and between different functional units. Benefit Programs Workers Compensation This is one kind of legally required benefit, which like others is meant for benefiting the employees. This benefit provides a degree of financial protection to those employees who have incurred expenses resulting from job related accident or illness. The organization pays for the workers compensation insurance, and the expense is tied to their past experience and job related accidents and illness. Impact on emplo