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Human Resources Management

1) How compensation and benefits laws affect me. They ensure that I am not exploited. Working hours not more than 40 in a week and time waiting ready to serve being part of the working hours will ensures that I do not overwork. I will not be charged for what is beyond my powers. For instance a fluctuation in the flow of clients does not affect my salary or wages. Setting the minimum wage maintains that there is limited underpayment and I can be able to sustain myself. The minimum wage is set at a rate that can maintain basic needs.

The Fair Labor Act also creates allowance for breaks and short time rest that will enable me to release tension and my work’s quality will not be undermined by fatigue or hunger. Over time compensation in form of money or day-off eliminates exploitation. With compensation I am motivated to work harder and for longer as the more effort and time I give in the more I get. The Occupational Safety and Health Act ensure that the ‘working place’ environment is conducive. Working under safe conditions will enables me produce quality work.

Without this provision risks of diseases and occupational hazards would

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be higher and they would compromise the quality of the output produced. Working is more enjoyable as with the injury compensation and health benefits. I do not have to work ineffectively for fear of what will befall me. 2) Why benchmarking is important in maintaining external equity in compensation It helps in identifying and adopting best-known practices that will lead to quality and superior performance. A company is able to improve its competitiveness by comparing the standards offered by other performers.

Companies compared with or the benchmark partners have best offers in the market. It also enables organizations preparedness for changing trends or fluctuations and they can therefore plan their compensation budgets appropriately. It ensures compensation levels with other performers in the market and thus important for evaluation purposes. For instance if the compensation is higher by a large proportion compared to the productive levels then there is need for changing the compensation plans. It is important for legal compliance uses to ensure that the compensation level is reasonably fair and is consistent with fair market value.

3 Relationship between compensation and employee morale Quality compensation increases employees commitment thus increases their retention and consequently raising their morale. (Ronald,1990) Compensation acts as incentive for increased quality work. Workers are motivated to work longer and produce quality output as they are assured their efforts not in vain. Variable compensation would demoralize the employees and employers must be keen when determining who gets what amount of compensation. Fair compensation reduces job turnover, as employees will look for employment where compensation rate is higher. 4) Managing team pay.

Teams are important as they work together for the benefit of the whole. For teams to perform well they must have autonomy to run their operations without hindrances. Targets should be set so that one can establish how much the team should be rewarded. Team pay should be based on performance so that higher performance translates to higher pay. The management should conduct an initial needs analysis before setting the pay. There should be a clear or good communication between the management and the team to attain the target. It’s the role of the management to audit the costs to ensure that team pay does not out do the gains from the work done.

Team pay that is below what is in the market will demoralize the team members. The management should match what the market offers. The management should establish how the team members are handled whether team members are treated differently. To avoid conflict pay should incline on performance, attainment of goals and standards and the efforts that have been put in. 5) Does pay -for-performance really improve performance? Pay- for -performance can improve performance in the short run, as it is an incentive to work harder to earn more. It is however hindered by other factors beyond the control of the employees.

For instance supply of a raw material could hinder the continued high performance. In teams it can create disparities between them, as more competent teams will not work with lesser-qualified teams. Strenuous relationship between teams will affect performance negatively. (Brown, 2001) Re-structuring the pay system becomes a hard task for the managers and it is difficult to maintain consistency of pay. It is also hard to maintain the pay- for- performance in the long- run. Employees may be more concerned with the quality than the quality of the output produced. This would lead to compromised quality.

http://www. amsa. org/hp/2006_PayforPerformance. pdf. It’s however beneficial because the management does not pay workers who do not perform thus costs are reduced. Workers where pay-for-performance is practiced are result oriented. (Delery et al,1996) 6) Situations that the following compensation methods are most effective a) Merit pay b) Incentives c) Lump sum a) Merit for pay It’s also known as pay for performance It is best applicable in institutions where there are limited funds It ensures that workers perform highly. The employer is able to establish the higher performers.

Comparisons can be made separately that is, the individual and the company performance. The employer can satisfactorily reward employees who perform tasks like implementation of new systems. (http://www. kogan-page. co. uk/armstrong/074944343X/contents. asp) It gives the employees personal motivation and a sense of belonging that they are part of the organization. It encourages motivation, innovation and contentment in the salaries received. b) Incentives They are best applicable where targets be attained can be measured. Sales are a good example of an area they can work well.

Employees are more motivated to attain certain targets. It encourages ownership of the job and thus improves performance. It attracts and retains high performing employees. Quality products are produced as without quality the incentives are withdrawn. Creation of competition works well for the quality and innovation of workers. Those practicing must have adequate finances. c) Lump sum Lump sum compensation provides financial control and contains the level of benefits of the employees. It provides a dear link between the employee’s pay and their performance. Best applicable in organizations where performance is measured annually.

It ensures that employees’ performance is highly maintained through out the year. (Brown, 2001) 7) How an organization with limited funds can remain competitive and retain employees. An organization with limited funds can practice the pay- for- performance method to ensure that their limited funds do not go to waste as only performing employees remain in such organization. The organization can also create a friendly environment where by the employees can maximize their potential. Good management-employee relationship can along way in ensuring that employees perform well.

8) Relationship between compensation and benefit strategies and employee retention. Employees are motivated by compensation and benefits that an organization offers. Good strategies will mean that compared to other offers in the market the organization offers fair compensation and benefits. Employee’s turnover would high if the compensation and benefits strategies offered are not favourable. For instance an employee in an organization offering pay- for –performance may shift to another organization offering incentives. (Ronald, 1990) References: Michael Armstrong & Tina Stephen: 2005, A handbook of employees Reward management and practice.

Retrieved on 12th October 2007 from http://www. kogan-page. co. uk/armstrong/074944343X/contents. asp Angie Bass. 2006. What you need to know about pay for performance. Retrieved on 12th October 2007 from http://www. amsa. org/hp/2006_PayforPerformance. pdf. Delery J. E &Doty D. H. 1996. Modes of theorizing in strategic. Human Resource Management: Test of Universalistic, contingency and configurational performance predictions. Academy of management Journal, 39(4) Brown, D. 2001. Reward strategies from intent to impact , CIPD, London. Ronald G. Ehrenberg. 1990. Do compensation policies matter? N. Y. ILR Press

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