BMG315/03 Compensation Management: Attract, Motivate, Retain Talents

This assignment solution delves into the core concepts of compensation management, addressing the strategic purposes of organizational compensation packages and strategies for achieving pay equity. It explores how compensation can be leveraged to attract, motivate, and retain talented employees. The assignment outlines five key strategic purposes, including rewarding desired behavior, maintaining salary equity, controlling costs, improving union-management relations, and enhancing the company's public image. Furthermore, it details five strategies for achieving pay equity, such as offering competitive salaries and incentives, establishing SMART goals, benchmarking against competitors, using merit increases, and providing non-monetary rewards. The solution emphasizes the importance of a comprehensive compensation strategy that includes base salary, variable pay, and flexible benefits to create a motivating and equitable work environment.

Compensation
Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Define 5 strategic purpose of an organisational compensation package to attract, inspire and
retain talents.................................................................................................................................1
Explain five strategies by which organisation can attain pay equity to attract, encourage and
retain talents.................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Compensation is known as cash and other blessings received with the aid of an worker for
presenting offerings to his agency. Compensation refers to all forms of economic returns:
tangible services and blessings personnel get keep of as part of an employment dating, which can
be associated with worker’s company to the corporation like provident fund, gratuity, insurance
scheme, and some other charge which the employee receives or benefits they enjoys as opposed
to such fee (BERGER and BERGGER, 2020). Compensation management is the manner of
ensuring that an business enterprise’s salaries and bonuses stay competitive, suitable, and
equitable. It additionally includes dealing with corporation benefit programs to make certain they
meet the desires of the present day staff. This assessment will define information about 5
strategic purposes of an organisational compensation package to get attention, encourage and
retain talents. Moreover, it explain about 5 strategies by which the establishment accomplish this
pay equity to attract, motivate ad retain talents.
MAIN BODY
Define 5 strategic purpose of an organisational compensation package to attract, inspire and
retain talents
Smart employers understand that preserving exquisite personnel requires presenting the
right reimbursement and blessings package. Compensation includes wages, salaries, bonuses and
fee systems. Employers have to no longer forget about approximately the benefits part of worker
reimbursement and blessings; due to the fact the blessings sweeten employment contracts with
the priorities that maximum personnel want. A primary reimbursement package definition is a set
of records that includes all the rewards that personnel achieve for appearing the paintings they'll
be employed for. Companies that provide aggressive and life-enhancing repayment can improve
motivation inside the place of work and enhance artwork overall performance, which in the end
results in greater corporation success (Abou-Moghli, 2019). There are different purposes and
goals of an organisational package to get attention, motivate and retain talented workers. Some
of them are explained as under:
To Reward Desired Behaviour and Maintain Motivational Levels of Employees:
Employees get caused to perform higher when their past typical overall performance is rewarded
as it should be. It is, consequently, necessary that a company’s compensation machine rewards
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average overall performance, loyalty, experience, and other organizationally suitable behaviours.
This will fortify desired behaviour and also will act as an incentive for that behaviour to maintain
inside the destiny. If employees are rewarded with a good compensation package as well as get
financial and non-financial benefits regarding their performance, then it improve their motivation
level and working abilities which support in enhancing the productivity and profitability as well
as support in business development.
To Maintain Salary Equity amongst Employees: The repayment system must strive for
internal and out of doors equity. Internal equity calls for that the remuneration be related to the
relative properly worth of the hobby so that similar jobs get comparable pay within the
organisation (Reddy, Ra and Venugopal, 2019). External equity method that the remuneration
for a venture has to be same to the remuneration for a similar manner in different corporations.
Also, whilst personnel are being paid well and are satisfied, they may be probably to live with
the organisation. Proper repayment is one factor why personnel continue to be with employers.
Loyalty technique that commercial enterprise proprietors do not want to hold to spend time,
money and power on recruiting new applicants. Employee retention and espresso-turnover prices
are high-quality for employers who cultivate a collection that is aware of what to do. That crew
is also encouraged to be part of the crew, and that they get the process done properly.
To Control Costs and Keep the Compensation Budget beneath Check: A rational
compensation device allows the corporation in acquiring and preserving employees at an
inexpensive price. Without effective compensation manipulate, employees may be over- or
underpaid. This permits in preserving the labour and administrative expenses below control, and
the agency can systematically pass approximately payroll budgeting.
To Improve Union-Management Relations: A rational compensation machine generally reveals
favour with personnel and their unions. This lets without problems sporting out collective
bargaining and negations between the control and unions. It reduces grievances arising out of
salary inequities. In addition to this, developing the right compensation plan leads to more potent
project delight. The right reimbursement plan includes benefits, along all the distinct bonuses
available. Employees frequently boast about holiday bonuses or they keenly watch how the
enterprise inventory plays due to the fact they've got stock options (Widagdo, Widodo and
Samosir, 2018). The proper reimbursement utility invests personnel into the paintings being
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completed, which offers them a more potent enjoy of delight even as the organisation succeeds.
They apprehend they will be rewarded for their efforts; all of us loves to be appreciated.
To Improve the Public and Professional Image of the Company: A suitable repayment
system sends a high-quality sign to the system marketplace which permits in maintaining and
improving the progressive photo of the organization in the industry. A rationally administered
repayment system creates a first-rate image with the government additionally because it
guarantees the organization’s compliance of legal guidelines concerning wages and salaries,
including price of Wages Act, 1936, the Minimum Wages Act, 1948, and the Equal
Remuneration Act, 1976. This all support in making fairness regarding the wages, remuneration
and compensation of employees (Nguyen, Yandi and Mahaputra, 2020). Additionally, support in
improving employees motivation and image of company in the market. This also assist in
success and development of business establishments.
Explain five strategies by which organisation can attain pay equity to attract, encourage and
retain talents
Organizations utilize a repayment strategy to outline how it perspectives and manages
employee pay and blessings. The approach serves as a manual and must be outlined in a written
report that simply articulates the agency’s technique to handling employee repayment. A
effective repayment technique motivates modern personnel and is used as a device to attract new
ones. People often reflect on consideration on repayment as truly an earnings. However, the full
price of worker compensation is composed of each thing of employee benefits. This consists of
the value of fitness blessings, retirement blessings, training compensation, bonuses, or a few
other non-income gain this is taken into consideration part of a whole repayment package
contract. There are different compensation strategies which are used by organisation in order to
attract, motivate and retain skilled employees. The description of some of them is as under:
Pay employees salary and incentives- The agencies with the pleasant worker morale and
productiveness pay a mixture of sales and incentives. The earnings compensate personnel for
performing all of the obligations required of them and provide them with everyday earnings. The
incentive motivates them to fulfil and exceed their dreams and gives them the possibility to
growth their income (Nguyen and et. Al., 2020). Pay employees the profits element of their
repayment month-to-month or bi-monthly. Pay employees the motivation element in their
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repayment as speedy once they meet their desires as feasible. Thus, quarterly incentive bills are
generally extra motivating than annual bills and month-to-month incentive bills are frequently.
Establish SMART cause- SMART goals are: Specific, Measurable, Ambitious, Realistic
and Time-positive. For salespeople, which means setting up month-to-month and annual income
goals and/or dreams for setting up new debts. For unique client touch humans, set up goals for
the ratio of customer compliments versus proceedings, and/or the form of customer courtroom
instances they resolve at the primary cell cellphone name (Indrasari and et. Al., 2019). For
employees in debts receivable, keep in thoughts basing desires on how plenty brilliant sales they
acquire towards precise desires. For the ones in production, undergo in thoughts basing desires
on the shape of products they manufacture free of defects. While it's far ok to pay a small part of
the incentives based totally totally without a doubt on the crew's commonplace effects, most of
the inducement need to be based totally totally on individual outcomes.
Determine what your opposition are paying- One manner to draw and preserve pinnacle
personnel-and keep them induced is to pay them as a whole lot or greater than their competition.
Every few years, they ought to decide what your competition are paying and alter your
reimbursement plan consequently. They can do that informally through manner of way of asking
personnel with considered one of a kind businesses that you interview approximately their
compensation plan, or extra objectively thru hiring an outside consulting business enterprise to
benchmark your plan in opposition to others and recommend them at the manner to alter it. As
nicely as adjust salaries based totally on personnel' geographic place. While the inducement plan
for personnel going for walks in splendid cities need to no longer change, they ought to regulate
the revenue detail to mirror the nearby charge of dwelling, so as no longer to penalize personnel
who live in extra costly cities.
Use merit will boom to praise pinnacle performers- In a inaccurate try to hold all
personnel glad, many organizations misallocate the price range they rate variety for annual
benefit will increase by using way of giving all employees essentially the equal advantage will
boom. Their first precedence should be to maintain and encourage large name employees, your
2nd priority to keep and motivate high-quality personnel (Hee and Jing, 2018). Therefore, award
the most vital revenue will growth on your stars, lots greater modest will boom to high-quality
performers, and no will growth to employees whose overall performance falls beneath
expectancies. Along with this, the organisation provides personnel with non-monetary rewards.
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Besides cash, employees are prompted via other kinds of popularity and rewards. For example,
bear in mind putting in an annual ride to reward personnel who've finished wonderful annual
goals. Besides increasing motivation, agency-subsidized journeys construct camaraderie and
teamwork. How they educate, develop and manipulate their personnel moreover drives retention
and overall performance. However, paying them further to you realistically can — based totally
on their universal overall performance — is one of the first-rate methods to heighten their
motivation.
Getting the mix right- Comprehensive repayment strategies will consist of base income,
variable profits, reimbursements, flexible benefits that allow employees to pick out a degree of
pension contribution, car allowance, healthcare, non-public medical beneficial useful aid further
to assist for private improvement and other options such the opportunity to purchase additional
holidays (Rinny, Purba and Handiman, 2020). The fine programs encompass long-term
incentives to recognize fee created, which includes percent options, and those can vary
significantly from enterprise to agency.
Smaller agencies and begin-united states want no longer experience at a drawback right
here, whilst they may not be able to compete with their huge counterparts at the monetary aspect,
they're able to every now and then have the threshold thru imparting different softer, however
very a lot preferred advantages. Such as: flexible running, greater cantered training possibilities,
get dressed codes, unfastened food, properly-being programmes the extraordinarily attractive
capacity for fairness inside the enterprise (Ismail and et. al., 2021). Considering the business
enterprise way of life and the sort of worker you are attempting to attract/hold will help inform
business enterprise leaders of the kinds of benefits they should provide internal any
reimbursement bundle deal. Being a part of a smaller corporation and having a position wherein
they might have real have an effect on on its increase and development is a hugely appealing
proposition and the value of this ought to no longer be underestimated.
CONCLUSION
This has been summarised form the defined information that compensation Management refers
back to the organization and performance of sound guidelines, programmes and activities of
worker compensation. It is essentially the application of a scientific and medical approach for
compensating the personnel for their work in a fair, equitable and logical way. Compensation
Management is involved with the compensation to personnel for their work and contribution for
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achieving organisational desires. The objectives of compensation management are to attract,
engage, and preserve employees thru aggressive reimbursement plans that align with the agency
finances, corresponding job-marketplace, and authority’s regulations. There are different
strategic objective of organisational compensation package like rewarding desired behaviour and
maintain motivational levels of employee, maintaining salary equity amongst workers and
developing the public and professional image of the company etc. There are different strategies
such as getting the mix right, determine what your competition are paying and pay employees
salary and incentives that are considered by business enterprise to get attention, inspire and
retaining talented people of the company.
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REFERENCES
Books & Journals
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Online
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