Analysis of Compensation System in Human Resource Management (HRM)

This report provides an analysis of compensation systems within the context of Human Resource Management (HRM). It focuses on the roles and interests of key stakeholders, namely the CEO and Human Resource professionals, in implementing and managing compensation systems. The report highlights the CEO's interest in aligning compensation with company goals, improving employee performance, and attracting talent, while also considering cost-effectiveness. It also describes the responsibilities of the HR department in managing employee compensation, attendance, leaves, and incentives. Furthermore, the report emphasizes the importance of an efficient compensation system for employee satisfaction and organizational competitiveness, supported by references to relevant literature on compensation and incentive plan design. The report highlights the benefits of structured compensation systems, including improved efficiency in HR operations and the ability to support long-term sustainability and competitive advantage.

Human Resource Management

Table of Contents
Job Analysis Compensation.......................................................................................................1
References.............................................................................................................................2

Job Analysis Compensation
The stakeholders which would be involved in terms of their roles and interest for
implementing a compensation system with an organization are CEO and Human Resource
Professionals.
Interest
CEO Human Resource Professional
CEO of an organization is concerned with
meeting the goals of the company which can
be either through improvement in the
performance of the employees through
improved compensation system or saving
the resources of the organization through the
changes in the present compensation system
("Designing an Internal Fair Procedure
System", 2017). Thus it is his role to review
the compensations system from time to time
and implement one which helps to improve
the overall productivity of the employees,
and allow the company to attract the
required talent in the industry. The interest
of implementing such system is also
justified as it would help the company
improve its job specification for the role for
which each employee has been assigned for.
The interest of the human resource
professionals in implementing a
compensation system is to improve their
efficiency of management of the
compensation of the employees. Through a
structured compensation system, it is easy
for the human resource department of the
company to record the attendance of all
employees, calculate their compensation,
record and sanction leaves, calculate any
incentive or bonus, etc. (Reilly, 2011).
When such activities are efficiently
conducted, the employees are paid on time
which leads to improvement in their
satisfaction level.
Responsibility
It is also the responsibility of the human resource department and the CEO of the
organization to continuously improve the management systems within the company which
helps to improve the efficiency of various operations and reduce wastage with the

organization. Such techniques to improve the internal working conditions of the company is
often used by organizations to build on their competitive advantage and work for long term
sustainability (Weinberger, 2005).

References
Designing an Internal Fair Procedure System. (2017). Management Report For Nonunion
Organizations, 40(5), 4-6. doi: 10.1002/mare.30275
Reilly, R. (2011). Compensation and Valuation Considerations in Closely Held Company
Stock Sales to an ESOP. Compensation & Benefits Review, 43(5), 306-317. doi:
10.1177/0886368711417238
Weinberger, T. (2005). Evaluating the Effectiveness of an Incentive Plan Design within
Company Constraints. Compensation & Benefits Review, 37(6), 27-33. doi:
10.1177/0886368705280737