Setting the stage for strategic compensation and bases for pay Term Paper

Setting the dot for strategic stipend and al-Qaidas for have a bun in the oven - Term Paper ExampleCompensation Department Goals Milkovich & Newman (2005) define compensation as the financial returns and benefits employees receive from employer in order to achieve a positive relationship amid employer and employee. It is geared at enhancing employees feat and constitutional effectiveness and consequently war-ridden advantage in the labor market. The compensation department is part human resource department as it is concerned with employee base pay and benefits administration.The main goals of the department are to attract, motivate and retain talented employees in the brass section. To achieve these goals, an organization needs to align its compensation objectives with organization objectives (Ledford & Heneman, 2002). To attract high quality talent, its pay has to be militant in the market. The compensation department carries out surveys to pose what the otherwise organi zations are offering for akin tasks and pay the same amount or higher than the competitors. The salary should reflect the value of the job being performed for an employee to be satisfied (Heneman, 2002).If the compensation an employee receives is not equivalent to the task performed or is not equivalent to what others performing similar tasks in the organization or in the job market, then the employee loses morale or is demotivated leading to low performance and loss of productivity for the organization hence the compensation establishment should be internally honorable and externally competitive (Bohlander & Snell, 2010). Through job evaluation, salary structure and performance management systems, an organization stick out be able to motivate and retain high performing employees. Ledford & Heneman (2002) argue that performance appraisals screwing be used to justify increased pay rate (413). Higher pay rates then change the organization to set high selection standards thus re cruit better qualified employees. To retain the employees, the organization can offer pay based on performance or the currently new system of pay for skills (Bohlander & Snell, 2010). However, motivation depends on the value of rewards achieved after achieving the set standards or after good performance thus the rewards should be motivating so as to direct behavior towards high performance. Contextual find out That Pose Greatest Challenge and One That Poses Least Challenge to Companies Competitiveness Organizations strive to achieve competitive advantage through its compensation system. According to Cardy & Leonard (2011), company gains competitiveness if its pay is fair compared to what is offered by other organizations. This can be achieved by developing strategies aimed at ensuring it remains competitive in the market such(prenominal) as comprise leadership and differentiation. A strategic analysis of the internal capabilities and external market surround is required to establ ish the challenges to organizations competitive ability. Organizations attain efficiency by operating at low cost while at the same time producing high quality products. This has an implication on its inputs since the cost of employment is determined by cost of inputs such as labor, capital and land. To attain efficiency, it thus has to ensure uttermost utilization of its resources in this case its employee skills, knowledge and interests. The competitiveness of the company is however challenged by various contextual factors such as employment laws, labor unions, market influences and social factors. These factors affect compensation practice and consequently competitiveness (Milkovich & Newman, 2005). The employment laws may pose a great challenge to compensation practices. The wage laws determine the minimum and maximum wages an employee can receive and prohibit employment discrimination. If an employee perceives a practice such as performance pay or skill based pay as discrimin atory, he/she can claim discrimination allegation. The base pay for employees performing