By assessing the current progress of employees’ performance in the entire organization, the management has decided to come up with a restructured compensating program as a way of trying to improve the performance for the better. It is in this line that the management has assigned the human resource director the task of coming up with a restructured compensating program that will suit the organization’s interests as well as those of employees. Bearing in mind that the employee is the one who is having direct contact with the clients, one realizes the importance of treating them well and solving their problems in the most efficient way so as to keep their performance at per.
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The organization in question is a service provider type called a hotel. The hotel is called Corner side hotel and it’s situated in the heart of Ohio State, USA. The hotel has a five-star rating and it serves both local and international clients who are able to access it in terms of money. The hotel has its own theme and caters to all cuisines known internationally. It is in the hospitality industry which has recorded first growth in recent times due to many people engaging in tours and travel. The hotel accommodates almost nine hundred and fifty clients per day in terms of bed and breakfast and has a hundred and twenty employees in all departments that are, including food service, food production, housekeeping, accounting, and others. This ensures an average of eight clients per one employee in the service sector n housekeeping. The hotel has an online reservation system that enables clients to book a reservation regardless of which part of the world they are in.
A junior employee who must be a holder of a hospitality management degree receives a salary of $550 per month where the salary increases as you move up the hierarchy. Employees are well trained after recruitment and monitored closely until they earn the required experience.
Compensation strategies aim at giving appropriate appreciation to the employees who deserve it. It is a great boost that affects the working capacity of employees who eventually attain the set results. Money is termed as being the strongest influence of motivation. When employees attain their set goals the organization stands a better chance in terms of success.
By connecting pay with performance, culture is enhanced which in turn empowers the type of organization that one desires by the application of these strategies. There are two examples of rewards one which involves money and one which does not. Those that involve money include salaries, bonuses, benefits, commissions, holidays, and the like. On the other hand, those that do not involve money are things like sensible and challenging tasks, being noticed and progression in career, favorable working conditions, and just treatment.
Compensation strategies can be put to good use in manners like attracting and holding experienced people by paying parallel with the rate in the market. In order to ensure good customer service, it is always critical to reward workers’ character that results in high-quality service. Most organizations fail when they tend to ignore appreciation and still expect quality services from employees. It is in the right order to try and portray a good image to the employees so that they may perceive one’s character as being just and fair in carrying out operations in the organization.
In coming up with compensation procedures, it is advisable to take into account the equality in treatment and considerations. This is because as soon as the workers detect an incidence of inequality they lose psyche and feel de-motivated while their feel of work becomes lower than normal. It is better to be as transparent as possible when it comes to paying the employee dues as this shows that one has objectives and a system of compensation that is effective. If one engages in privacy in matters of salary mistrust from employees results as they lose motivation and gladly reduces their performance.
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Another reason why workers should be compensated is to prevent them from being enticed by the competitors who may be willing to entice them by promising better terms than they receive from ones organization. By having the strategy in place such worries are not worth as it will portray fairness and the employees would find it difficult to leave a just employer. This may also be because the idea of leaving an organization does not just come abruptly; it requires considerations in addition to the compensation received.
Determining pay rate is another issue in compensation strategies. It leads to adoption of some ways of coming up with rates of pay. One is increasing employee’s salary according to the amount of time consumed on the job. This helps greatly in retaining employees and motivating them during their daily performance but in this case one doesn’t reward performance. Secondly payment based on performance is expected to mobilize employees to pull their socks. This is made evident in cases where managers and workers agree on targets and performance at the onsite of the tasks which in most cases is at the beginning of the year. Its impact as a motivator is different from time to time and from issues to issues.
Increases in pay can also be given based on experience and knowledge derived from the job. This majorly motivates the employees to get extra skills, acquire new tactics and knowhow. This method does not provide for payment of employees in the job they are doing or the job they hold. This is pay based on competence and appears to be the most reasonable. The compensation strategy’s goals should be similar to the organizational business goals. Salary increase is a constituent of the plan where employees are recognized in accordance with the accomplishment of organizational goals.
Reviewing the payments is necessary and increment awarded on merit and there are situations when organization cannot be able to give any pay rise due to its current financial status. Establishing a policy whereby workers are allowed pay increase when the organization can afford ensures that hardworking employees will continue with the same spirit believing that they will receive when the money is there. In case there are employees with payment below the minimum for the job or low as compared to the employee’s performance, adjustment should be done appropriately. In the same note there are cases where an employee is paid above the maximum limit range for the job. In such a case holding the salary increase to the time when level is reached is necessary. Caution should be taken when there is no evident reason as to why an increment in salary should be given. Finally comparing ones salary with that of the market by carrying out survey is necessary so as to know the stand and the need to adjust either by freezing or by increasing pay to the employees to match with the market range.
An organization’s operational program concerning compensation is aimed at two factors. One of the factors is that it might come up with the appropriate pay programs which will identify the appreciation desired characters. The second factor is that it is required to determine how to organize work systems to maximize the resources available. In trying to meet the second factor there leads to the decision process by the organization on whether to operate its compensation function in a centralized or decentralized manner. This is made complex in that the management needs to be consistent with the strategy of human resources and the aims of higher management.
A centralized system works well in cases where organization needs to enhance a one company image with a single structure and a consistent way of dealing with its payment process. The approach helps organizations in avoiding duplication of events and reduces its need for consultation.
A decentralized approach which has an indirect connection to organizations headquarters has a total line orientation that is answerable to the requests of the operating units. Under the decentralized approach each department or operating unit tends to have its own programs in terms of salary management. It works well for diversified organizations which have participation in various markets to compete for both workers and clients.
Determining on the correct compensation structure that an organization should use is quite hard task as many factors needs to be addressed (Martocchio 77). Similarly both approaches have got their own advantages and disadvantages therefore an organization should spend a considerable time when deciding on which approach to apply. This operation structure ones adopted should be adhered to the latter if the organization is to realize its impact at the long run. Measures of control to put the system at check should be put in place to enhance consistency.
Compensation program should be well defined and equal so as to allow for application in all sectors of the organization. This creates balance in the entire organization and the employees feel accommodated in the system by equal treatment.
The system is easy and flexible enabling the employees to compute their own earnings. This enhances transparency of the system. It should be easy to install and it should not by any chance exploit workers in any manner what so ever. This will raise morale and effectiveness due to the fairness expressed.
The programs enables the management react accordingly to the labor laws and solving issues concerning employee’s problems. These problems may also be between the organization’s leadership and the individual worker. It preaches better performance and enables equal pay. Moreover it gives opportunities to those wishing to excel. The system helps in bringing up peace relationships between employee and the employer, encouraging profitable competition among employees at work and providing growth and advancement to deserving individuals.
The organization enjoys stability since the labor turnover is curbed by the satisfaction brought about by the system .Job descriptions always emphasize accountability where the job matters more than the job holder (Kanin-Lovers, Jill 2). It creates loyalty and the organization has a chance for development through its resourceful employees. The compensation system helps in rating organizations since its success is measured by the salary and benefits it gives to workers.
There is high probability that by analyzing the whole process of compensation, one can have a loyal, cooperative and goal oriented employees. This will greatly impact on the well being of the organization. By involving employees in some decision making enables them to feel appreciated and they have a feeling that they belong to that organization. This makes them work with determination because the success of the organization is still their own success.
The hospitality industry greatly needs to implement those systems mainly because the contact in service provision is between the staff and the customer. If a staff is not happy he/she may fail to deliver the required quality of service and if happy the service will be beyond customer expectations.
Kanin-Lovers, Jill. “Insurance: Journal of Compensation Benefits”.Warren, Gorham &Latmont, and Inc., (1992).
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Martocchio, Joseph, J. Strategic compensation, A Human Resource Management Approach. 6TH Edition, prentice hall, 2005.
Sharon, Koss. Solving the Compensation Puzzle: Putting Together a Complete Pay and Performance System. USA: SHRM, 2008.