Compensation and Benefits - Analysis

Running head: COMPENSATION AND BENEFITS
Compensation and Benefits
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1COMPENSATION AND BENEFITS
1. Assessment of compensation system
Simply Literature Production is a family run SME. The company structure as a whole
is in disarray. The basic problem for the company is its top down organizational structure and
the decentralization of decision making power in the company (Mohrman & Lawler, 2017).
All the decisions are virtually taken by the owner himself and there are nor accounting or
human resource expert who can guide him through the process.
The salary and reward system of Simply Literature Production does not meet the
effective compensation system neither it is fair. Fair compensation policy must include a
proper system and strategy (Sharma & Sharma, 2017). It conforms to the system of regular
raise and providing bonuses for achievements. Ravi also does not have any budget system for
payroll and thus has no track of the money being spent. This leads to the subsequent drainage
of the bank vault. The compensation system violates systematic pay, appraisal system and
proper strategy for payroll.
2. Analysis of the compensation system
The problem of the company goes to its roots. In most cases people are appointed for
personal reasons and the owner, Ravi is a moody and instinctive man. While deciding pay
and rewards he fails to keep a proper record which he can use (Steers & Lee, 2017). Rather,
he decides sporadically and attributes certain amount of increase or reward to his liking. This
has led to widespread disparity in salary within the employees. The new employees face these
problems harder. They are unaware of the system or lack thereof. They get lesser amount of
pay raise and bonuses and thus become de-motivated to work. They also have to work longer
hours and rarely have time for their family and pleasure. They become tired due to the longer
office hours and in exchange they are not even paid for their extra hours. The new employees
also face problem finding solutions to problems. The managers and the supervisors are unable