Why must you use strategies in compensation management?
By compensation, we meant staff rewards, the salaries, allowances and incentives.
Well, what were the reasons that your organization recruited people? You recruit people for a reason. They are there for the purpose of helping your organization succeed. And you are paying them in return for their contribution to the organization.
You will discover that not every employee will contribute a fair share towards the success of the organization. Even good employees may fall short or start to lapse into mediocrity. The bottom-line starts to suffer. And you know you need to do something about it.
You may have the following options:
1. Sack the employee or employees concerned
2. Punish them in order to force them to perform
3. Give them counselling
4. Motivate them to make them perform better
Firing or dismissing employees is not a straight-forward matter. You may find that it takes a long time particularly if the dismissed employee(s) take the case to court. You may find the organization being pulled in the wrong direction which is not beneficial at all.
It is proper to make use of the disciplinary system to bring employees into line. But this can also bring about much negative energy in the organization.
Giving counselling is one of the ways in motivating employees, to help them fulfill their obligations to you as their employer. Sometimes it works, sometimes it doesn't.
Employee Motivation
It is important to maintain the motivation of employees. It is even more important to improve employee motivation. You cannot afford to carry unproductive employees. Everyone needs to perform.
Financial reward motivate employees. Maslow placed this at the lower level of his hierarchy of needs theory. But money alone may motivate employees to a limited extent. It soon loses its influence in sustaining employee motivation.
So, it is necessary that you use the right strategies in compensation management. You can combine monetary rewards with non-cash rewards such as health benefits, paid holidays, training, and so on. It is argued that employees prefer to choose the types of benefits they like to enjoy. This reduces the unhappiness over the lack of choose or not being allowed to choose. You may want to make available to your employees what some refer to as "cafeteria benefits" where employees are given the opportunity to choose benefits that suit their individual needs and the needs of their families.
The wrong combination of rewards may not motivate employees for long. They may conclude that you are manipulating the system. They may feel used.
You want to achieve the objectives of the company. To do this, you need motivated employees. Money motivates but you cannot afford to keep increasing employees' salaries. You need to plan so that what you pay employees make them committed to helping the organization succeed. You need to make them feel that they belong.
You need to identify and implement the right strategies in compensation management. If not, you may find that people come to work, put in the required number of hours but do not contribute in any significant way to the success of the organization.
