Human Resource Issues Analysis
The effects of the economic crisis experienced by global economies in the year 2007-2009 are being felt up to now. Many industries have declined in performance and less income is being generated from business activities. There has been a high rate of unemployment and the living standards of the people have been adversely affected. Many companies have low performance rates and retrenchment has been one of the solutions. Many employees have been laid-off to reduce costs to the companies. Many organizations have reduced the benefits provided to their employees.
Several employee benefits schemes have failed and employers have reduced their contribution towards the coverage of their employees. The compensation rates have declined and employees are earning low incomes compared to the last few years. The essay surveys the changing human resource programs after the global recession. The essay has been written from a first-person perspective. The external data sources used are articles collected by wall street journal. The topics discussed in the context of this essay are employee compensation, benefits and lay-offs being experienced in the current economic environment.
Compensation From my observation, organizations paying their employees better salaries get better results. Employees are motivated to work harder and provide better results when they are compensated properly for the work done. Shareholders and managers get better returns when employees are positively motivated. Thurm, (2010, para 1) is of the opinion that “an analysis done for The Wall Street Journal by Philadelphia-based consulting firm Hay Group found that companies run by the nation’s best-paid chief executives generally deliver better-than-average shareholder returns.
” However, the poor economic performance being experienced today is causing the public and political groups mount a lot of pressure upon the executives receiving very high wages while the business performance is low. There are a few employees getting exaggerated wages compared to the performance of the companies they are working for. This creates great pressure upon the shareholders since they are the ones to bear the burden of sustaining their employees. As the compensation to employees increases; the earnings received by the shareholders decreases. Many shareholders are complaining about the large perk given to the executives of companies.
The economic performance is low and companies are not giving returns as per the expectation of the shareholders. Margot (2010, para 4) suggests that Shareholders might still be right to question, though, why Thiam and many other U. K. executives need a new set of long-term incentives each year. For one thing, the awards can still pay out in full even if the companies’ share price and profits are sharply down in the three-year periods they cover, since they’re usually linked solely to outperforming peers. The low share prices offered by companies to shareholders is causing a lot of concern about the many benefits provided to the executives.
To the contrary, the subordinates of many companies receive low wages. There is a very big gap between the compensation for the executives and the low level employees. This discrimination is causing a lot of conflicts in the workplaces as employees seek for a fair share of wages provided by the employing companies. Discrimination in wages is increasing since the managers continue to receive many benefits from the organizations they are working for. Despite the low performance of many industries, the high wages provided to executives has not been adjusted.