HRM324 Wk 2 – Compensation Evaluation

Compensation Evaluation

UOP/HRM/324

 

 

Compensation Evaluation

Discrepancy in Salaries

Workers in every institution frequently seek to find what they will receive after giving their best skills and services in their area of operation. As such, the employees expect their employer to completely adhere to the contract agreement signed before beginning working for the organization. It is common in different industries that professionals are compensated based on a combination of things, may it be their experience, position within the corporation and or skills. As a result, this creates a situation where workers doing the same work but earning different salaries. The discrepancies that bring these differences in wages among workers include; according to (Carraher et al., 2013) professionals with an advanced educational background and extensive experience, are more likely will receive higher compensation than those professionals with little education and or experience. Another factor that gives one a more preferable choice would be skilled. These individuals will have an advantage as an asset to the corporation. With all that, an additional aspect that can add to the discrepancy in compensation would be discrimination. This is very common within the hiring manager will compensate based on sex or ethnicity rather than skill set.

 

Correcting Internal Equity Problem

For an organization to solve or correct the internal equity problem, it is essential to formulate and implement strategies to address the issue of discrepancies. First and foremost, organizations can frequently review their workers’ experience records and place the workers in the appropriate salary scale that matches their skills and experience. This will assist eradicate situations where those more experience gets paid less than those who have little experience. Also, employers should implement strategies that destroy biases in paying workers’ wages by paying all of them according to their input and output and not according to their race or any other affiliation that is not related to work. Hence, to correct the internal equity problem, the organization should remove discrimination. Additionally, employees should ensure that the workers who do not know how to negotiate for their salaries are given allowances and other competition perks that will assist in matching with other workers’ wages hence creating job satisfaction (Judge et al., 2010).

Correcting External Equity Problem

This problem happens when individuals in the same field of profession earn different salaries in various institutions. Often when there is a need to reduce labor costs in order to expand the profit. To ensure this problem is correct and addressed adequately, there should be the implementation of labor laws that concerns employment acts that will assist in developing policies (Meals, 2012). As a result, this will ensure that managers follow a standardized wage rate. Additionally, there should be the creation of trade unions where all workers are required to join that will to regulate and equalize the workers’ salaries in each job for their team members. This will ensure that organizations will not steal other organizations’ employees and the rightful payment from the workers. Furthermore, market forces can be utilized in the supply and demand of employment is the same so that workers will not be able to apply wage discrimination in paying their workers.

Reasonable Pay for New Hires

During the hiring and selection process, the human resource manager usually seeks employees that are of high talent and with the best experiences as well as those with the desired skills to perform (Bamberger et al., 2014). Additionally, managers seek to minimize labor costs so that they do not pay much. In response to this, workers tend to suffer. “Thus, to ensure that workers are not mistreated in terms of payment, the workers should ensure that they have joined trained unions so that through them, they can negotiate for better pay. Furthermore, new workers should ensure that the organization is operating under the labor laws and adhering to the employment acts so that they do not get discriminated upon payment “(Flaherty, 2013).

Total Compensation Strategy

Total compensation strategy has an impact on an organization’s financial operations and its ability to attract, inspire and retain overall talent for those organizations that have utilized this strategy. This strategy helps organizations to equate and treat people with fairness according to their status, which, in doing so, creates a good impression and paints an excellent public image and recognition to the community.

Additionally, the strategy helps to boost the financial operations of the organization because workers are well motivated to work hard by giving their best skills into the organization’s activities (Bamberger et al., 2014). As a result, the profits made will surpass the total production costs. Furthermore, due to reasonable payment and compensation strategies within an organization will also increase the firm’s ability to attract more highly qualified workers because they believe that they will get good rewards and bonuses accordingly. Also, according to (Bamberger et al., 2014) to the current workers will work effectively to produce better outcomes so that they can be retained and the organization will ensure that the skilled and top talented workers are well compensated so that they cannot be attracted to more to their competitors.

Conclusion

In conclusion, it is, therefore, significant for all companies to develop an evaluation mechanism of compensation criteria so that they can regulate based on paying their team. Additionally, organizations should entirely avoid discrimination of workers so that they can effectively work in producing better results.

References

Bamberger, P. A., Biron, M., &Meshoulam, I. (2014). Human resource strategy: Formulation, implementation, and impact. Routledge.

Carraher, S. M., Carraher, S. C., & Millage, P. (2013). Pay Satisfaction of Small to Medium-sized Enterprise (SME) Owners in Scandinavia and the Baltics: An Examination of Jaques’ Equity Construct and Lawler’s Discrepancy Measure. International Journal of Global Management Studies Professional, 5(1).

Flaherty, M. T. (2013). Students with Specific Spelling Disability: A Collective Case Study Identifying the Experiential and Behavioral Causes for the Discrepancy (Doctoral dissertation, Cardinal Stritch University).

Judge, T. A., Piccolo, R. F., Podsakoff, N. P., Shaw, J. C., & Rich, B. L. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77(2), 157-167.

Meals, D. R. (2012). CEO & Employer Pay Discrepancy: How the Government’s Policies Have Encouraged the Gap. J. Bus. Entrepreneurship & L., 6, 297.