Essay: Strategic Compensation Programs
It is important to note that high compensation goes with employee satisfaction leading to efficiency, hard work and commitment among other issues. Most of the entrepreneurs start their firms and focus only on maximizing profits and minimizing costs thus paying their employees very low (Subramaniam & San, 2009). This is mostly noticed in the companies in the third world countries where the management is out to exploit its employees and thus does not put into consideration compensation programs. Because of shortage of skilled labor, most of the multinational firms like those in Malaysia are forced to maintain the best compensation programs in order to attract and retain high skilled employees. Considering the ATE industry in Malaysia, it was concluded that poor compensation package led to high turnover rates. After a thorough research, he argued that employees should be paid based on their skills rather than on job description and through work related pay programs so that they do not feel exploited. He further argued that applying strategic compensation programs reduces or even eliminates all the problems brought about by poor wages. Well-compensated employees feel appreciated in the workplace and will always work towards achieving the goals of organization. They are always determined to see the organization they work in succeed. (Subramaniam & San, 2009).
Payments are divided into two main sections namely indirect (wages and salaries) and indirect (benefits). The pay rates for the employees of an organization should be decided by considering a number of factors; worth of each task done through job evaluation, salary survey conducted to determine the range of the wages to other employees in other firms with similar jobs and using wage curves to price each task. Similar jobs need to be grouped together to ease the task of determining the wage rates of different employees in different positions.