Compensation and Benefits
The overall objective of a compensation plan is to recruit the best human capital, motivate employees to perform at their peak and retain employees. The compensation package is critical to the strategic HRM plan since much of an organization's budget is devoted to employee compensation. This chapter details compensation options, compensation theories, and applicable laws regarding compensation. It also differentiates between financial, indirect, and non-financial compensation. Perform and answer exercise question one, which asks you to research your intended career and consider your compensation expectations with what you learn.
Goals of a Compensation Plan
Key Takeaways
- A compensation package is an important part of the overall strategic HRM plan, since much of the company budget is for employee compensation.
- A compensation package can include salary, bonuses, health-care plans, and a variety of other types of compensation.
- The goals of compensation are to attract people to work for your organization and to retain people who are already working in the organization.
- Compensation is also used to motivate employees to work at their peak performance and improve morale.
- Employees who are fairly compensated tend to provide better customer service, which can result in organizational growth and development.