Compensation Issues in Organizations: Case Analysis Report

This report examines compensation issues within organizations, focusing on two case studies: Woolworths and Amazon. The Woolworths case highlights underpayment, where employees were deprived of fair compensation due to financial miscalculations, resulting in significant financial losses and a loss of employee trust. The report suggests implementing an e-HRM portal to improve transparency and accuracy. The Amazon case reveals issues with worker's compensation, where injured employees were denied adequate support and compensation. The analysis emphasizes the negative impact on employee morale and commitment. Proposed solutions include ensuring promised compensation and developing comprehensive worker's compensation policies. The report uses these examples to illustrate the importance of fair compensation practices and their impact on organizational success.

Running head: COMPENSATION ISSUES IN ORGANIZATIONS
COMPENSATION ISSUES IN ORGANIZATIONS
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1COMPENSATION ISSUES IN ORGANIZATIONS
Woolworths compensation underpayment issue
Woolworths took the initiative of depriving the employees of their fair compensation
through underpayment. It has been observed through a investigation report that the organization
has been providing the employees with an underpayment for the last ten years, amounting to
around $300 million (Knight, 2019). The lower grade pays and payment on incentive ,schemes
of the organization affect6ed the capability of the same in retaining the trust and commitment of
the employees towards the operational processes. Through the initial analysis of the case
situation it was found that around 5700 staffs of from the supermarkets department of the
concerned organization were underpaid due to financial miscalculations on the side of the
accounts department (Knight, 2019). The errors in the salary payment options significantly
affected the capability of the organization in maintaining the effectiveness of the business
operations. Again, the underpayment in the organization due to the miscalculations on the side of
the higher management and administrators affected the trust and commitment of the employees
towards the organizational growth and expansion.
Resolving the concerns
The organization could take the initiative of developing an e-HRM portal which would
support the same in maintaining transparency of the payment while addressing the queries of the
employees. The e-HRM portal would assist the organization in minimizing the errors through
transparency through which the employees would be aware of the remuneration policy and keep
easy track of the compensation that they have been receiving for their services. On the other
hand, the finance and HR management personnel of the organization must collaborate with one
another before providing the employees with their remuneration.

2COMPENSATION ISSUES IN ORGANIZATIONS
Amazon Worker’s Compensation issue
The Amazon’s case revealed the increasing number of people that are injured during their
operations and are not cared of. It has been noted that the compensation related schemes were
not provided by the concerned organization in accordance with the needs of the employees.
Allen, an employee in the organization suffered an injury while operating as per a process in the
organization for which the business did not provide her with any sort of compensation insurance.
Moreover, she was forced to go through a buyout process offering her $3500 to prevent any
derogatory remarks on her experience with the organization (Sainato, 2018). The objective of the
organization was to realize the optimum value of its human resource without caring for their
health or safety factors (Sainato, 2018). The compensation based concern affected the capability
of the organization in retaining the trust and commitment of the employees while improving their
process structure. The compensation system was problematic as people like Allen were found in
Amazon who were deprived of their worker’s compensation. It demoralized the workforce and
minimized their commitment towards the organization.
Resolving the concerns
The organization might take the responsibility of conferring the promised compensation
packages to the employees, specifically when the same have been injured while operating in
accordance with the good interests of the business. The organization might take the initiative of
developing worker’s compensation policies with the purpose of adhering to the needs of the
employees, even when they are injured. The predefined policies and procedures would allow
the organization in improving compensation packages while adhering to the needs of the
employees.

3COMPENSATION ISSUES IN ORGANIZATIONS

4COMPENSATION ISSUES IN ORGANIZATIONS
References
Knight, E., (2019). Woolworths The Latest Perpetrator In The Wage Underpayment Epidemic.
[online] The Sydney Morning Herald. Available at:
<https://www.smh.com.au/business/companies/woolworths-the-latest-perpetrator-in-the-
wage-underpayment-epidemic-20191030-p535sk.html> [Accessed 23 March 2020].
Sainato, M., (2018). Accidents At Amazon: Workers Left To Suffer After Warehouse Injuries.
[online] the Guardian. Available at:
<https://www.theguardian.com/technology/2018/jul/30/accidents-at-amazon-workers-
left-to-suffer-after-warehouse-injuries> [Accessed 23 March 2020].