Along with rewarding employees for their contributions compensation acts as a motivator; “compensation practices can be used both to reinforce employees’ reciprocal commitments to long-term employment and to create incentives for employees to engage in commitment behaviors” (Gramm & Schnell, 2013, p. 124). While some employees do not have many options and will take what they can get, many employees desire higher wages and seek competitive compensation packages. It is the role of Human Resources Management to design packages according to organizational goals and employee satisfaction. Planning, recruiting, selecting, and training ideal employees must be followed up with satisfactory compensation. Youssef (2012) explains that Human Resource Managers use information from their planning process and the job market to determine compensation packages and market strategies. As there are laws governing recruitment and safety there are also laws to govern compensation “it is illegal for employers to discriminate in pay based on gender, religion, national origin, race, color, disability, or age” (Youssef, 2012, p. 212). These laws also motivate Human Resources Managers to select and compensate employees “based on job responsibilities, employee qualifications and performance, and accurate market analysis” (p. 212). Along with pay, benefits are offered as compensation. Benefits such as workers’ compensation and social security are mandatory whereas benefits including severance pay, health insurance and paid time off are voluntary (Youssef, 2012). Pay and benefits are used competitively to attract and retain employees. Ultimately compensation packages are limited to the financial resources available within an organization. Finances are a major challenge when it comes to designing an adequate compensation package. While offering attractive compensation packages is ideal, Human Resource
Along with rewarding employees for their contributions compensation acts as a motivator; “compensation practices can be used both to reinforce employees’ reciprocal commitments to long-term employment and to create incentives for employees to engage in commitment behaviors” (Gramm & Schnell, 2013, p. 124). While some employees do not have many options and will take what they can get, many employees desire higher wages and seek competitive compensation packages. It is the role of Human Resources Management to design packages according to organizational goals and employee satisfaction. Planning, recruiting, selecting, and training ideal employees must be followed up with satisfactory compensation. Youssef (2012) explains that Human Resource Managers use information from their planning process and the job market to determine compensation packages and market strategies. As there are laws governing recruitment and safety there are also laws to govern compensation “it is illegal for employers to discriminate in pay based on gender, religion, national origin, race, color, disability, or age” (Youssef, 2012, p. 212). These laws also motivate Human Resources Managers to select and compensate employees “based on job responsibilities, employee qualifications and performance, and accurate market analysis” (p. 212). Along with pay, benefits are offered as compensation. Benefits such as workers’ compensation and social security are mandatory whereas benefits including severance pay, health insurance and paid time off are voluntary (Youssef, 2012). Pay and benefits are used competitively to attract and retain employees. Ultimately compensation packages are limited to the financial resources available within an organization. Finances are a major challenge when it comes to designing an adequate compensation package. While offering attractive compensation packages is ideal, Human Resource