Recommendation regarding the compensation system of Henderson

This article provides a recommendation regarding the compensation system of Henderson Printing, a manufacturer of accounts books and ledger. It discusses the current issues with the compensation system and suggests goals and strategies for an effective compensation strategy.

Running head: HUMAN RESOURCE MANAGEMENT
HUMAN RESOURCE MANAGEMENT
Name of the Student
Name of the University
Author Note:

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Date: 5th June 2019
To: CEO of Henderson Printing
From: Hired Consultant (Name of the Student)
Subject: Recommendation regarding the compensation system of Henderson
Henderson Printing is known to be manufacturer of accounts books, ledger and various kind of
account books which are used in business. The organization is located in Halifax, where the
annual sale of the organization is found to be around 12 million (Tan et al., 2018). George
Henderson believes the fact that the high-quality of products are manufactured. The organization
makes use of high quality grade paper, binding materials and cover stock. This particular aspect
has led to production of high price and cost. The owner of the organization aims in providing
high-level customer service (Bagheri et al., 2017). The organization is focusing on making
products to the specification of customer as per their request. In the beginning days, therewas
around 80 number of people, and majority of them work in production. The organization comes
up with few number of supervisor who can oversee the production. The responsibilities are not
clearlyspelt out, but the supervisor often contradicts with each other. There is no kind of system
available for overall scheduling of production. The organization comes up with various kind of
salesperson that travel in the Atlantic region. George focuses on becoming benevolent employer.
The owner believes the fact that they cannot provide any kind of formal benefits for its
employees (Olabode, Yinusa & Oludele, 2019). George does not have any kind of formal system
concerning pay and takes up all the payment related decision at the very moment. At present, the
owner of the organization gives raises to the employee based on his mood and relation with
employees. The owner of the organization understands the fact that the good employee of the
organization needs to be recognized. The owner of the firm provides bonus to the employees

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based on the given profit. It is completely based on the overall contribution to the organization.
In this firm, long term employees tend to receive much larger bonus in comparison to the new
employees. In this firm, longer-tenured employees are considered to be very much productive
(Nirala & Saha, 2017). The owner itself distributes the bonus cheque on the day before
Christmas. The owner of the firm has retired at the age of 60 in following year and is planning to
turn the business to his daughter.
Compensation can be stated as a term that provides exchange between employees and
organization. It aims to provide a list of things in return for the given thing (Noe et al., 2017).
Compensation issues are considered to be confidential and mainly governed by the preference of
individual employers. In the present competitive world compensation policies are very much
transparent. Employees can make their choice depending on the compensation packages (Balci &
Hocaoglu, 2017). Proper kind of balance between cost of compensation and retaining employees
in this printing firms has become as one of the biggest priority. The goals that are suggested by
the present strategy of George are
Compensation: It can be stated as the remuneration which is received by the employee
that can result in return of contribution that has been given to the organization. Compensation
management can be stated as an organized practice which is needed for providing balance
between work and employee (Duncan & Malini, 2016). It mainly comes into picture as a result
of both monetary and non-monetary compensation to large number of employees. Compensation
is merely inclusive of various kind of payment that can arise from employment. The best part of
theorganisation is compensation management, which is needed for retaining the most important
and worthy assets. Compensation management is known to be complex process that requires
precision, and if not carried out properly then it can lead to employee dissatisfaction (Duong et

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al., 2019). Ideal compensation policy mainly aims to motivate the employees so that they work
harder along with more motivation. This particular aspect also helps the organization in setting
out standard concerning the job (Naderipour et al., (2017). One of the important aspect of
compensation management for the given organization is all about creating a competition among
the required employees. It is mainly needed to attaining much more efficient and opportunity of
growth for employees.
Equity: The first aspect of equity aims to take up various forms. This particular aspect is
all about distribution by narrowing of inequalities, increasing the income of employees. The
whole idea of equal pay for work needs to come into picture for equal values. The whole idea of
compensation management can look for internal and external equity (Li, Akin & Rajashekara,
2015). Internal equity aims to pay concerning work about similar kind of job that has the pay.
External equity is all about paying for the workers that are there in another form of labour
market.
Efficiency: The main notion of efficiency is mainly reflected in the attempts, which are a
part of the wage for productivity and overall profit in groups (Gerwing, & Plate, 2019). There is
a need for arrangement of achieving efficiency which is written inequitable way.
Macro-economic stability: The whole thing comes into picture as a result of low inflation
and high level of employment. For getting minimum amount of wages, then it can have overall
impact on the level of employment. Some tough kind of consequences can into picture, which is
topic of discussion (Shang et al., 2019). Overall, compensation policies can easily influence the
macro stability and can easily contribute to macro-economic stability.

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Efficient allocation of labour: Efficient allocation of labour in the whole market focus
on the fact that the employees move to location where they have not received a gain. This
particular kind of movement from one given location to another job.
There are many goals that are not supported in Henderson Printing like
Motivating the employees: Employees come up with manykinds of talents, but they will
not use it until and unless they are motivated. Employees need to understand the fact that they
will be rewarded for their contribution towards the organizational objectives (Olabode, Yinusa &
Oludele, 2019). Even they will be punished for not contributing as per the demand of the job.
Retaining the present employees: Employees might quit if the level of compensation is
not that much competitive that results in much higher turnover. The biggest objective of
compensation management is all about talent of the organization.
Cost Control: Henderson printing needs to focus implementing cost control by which this
particular organization can obtain and retain workers at much reasonable cost.
An effective compensation strategy can easily bring huge number of benefits to
Henderson Printing. It can easily power the overall growth of the organization by the help of
compensation management (Bagheri et al., 2017). Compensation Strategy will ultimately
encourage the employees to work hard, which result in overall growth of this organization.
Providing support for overall strategy: Effective compensation strategy will provide
support to the overall business strategy. An effective compensation plan aims in providing guide
to the employees so that they can be directed. This will merely encourage them to meet the goals
of the organization (Tan et al., 2018). Compensation packages aim to provide rewards to
employees that can help the business to become an excellent customer service.

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Rewarding valuable employee behaviours: There are mainly two methods for which
employee can be motivated so that they can take the required action. It can be achieved with the
help of reward and punishment. Employees can become unhappy and resentful just because of
punishment. Rewards can be stated as one effective way for encouraging so that they can act for
the benefits.
Providing Individualized Compensation: Employees are unique, and they do not tend to
value the same given things. Employees of this organization can be easily motivated by the help
of cash bonus option. Effective compensation strategy can easily provide rewards for employees
so that they can maximize the overall compensation (Nirala & Saha, 2017). The front line
manager can easily provide advise concerning employee preference. The given preference can be
used for providing offer for compensation, which helps in getting result.
Bringing attention to the total compensation: Employees many time are asked about the
amount they are compensated most probably the salaries. The point can be noted that salaries are
considered to be as one of the important aspects of compensation (Noe et al., 2017). In most of
the cases, the money is wasted when the employee does not have any kind of understanding.
Analysing ROI concerning compensate dollars: A majority of the organization aims to
treat compensation similar to like a cost. The overall compensation can easily cost huge amount
of money to the organization. Compensation cost ultimately result in overall cost for the business
money (Balci & Hocaoglu, 2017). In most of the cases, it can become investment for future
employees and business. The overall rate of ROI on compensation can be measured by analysing
the overall business strategy. Henderson printing can make use of list of things like productivity,
morale and lastly customer service. The whole thing depends on the overall strategy of the
organization.

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Fig 1: Steps to Develop an effective Compensation Strategy
(Source : Created By Author)

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