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“What COVID Means to Compensation”: Changes in Compensation Structures

COVID-19 has become an essential threat to all industries, and the field of human resource management has not been spared. In fact, due to the imposition of severe restrictions on the possibility of social contact and distancing, workers across the board have been forced to switch to a remote format in order to keep themselves and others safe. Tom Starner’s article What COVID Means to Compensation discusses the current problem of changes in compensation structures caused by the impact of the pandemic (Starner, 2020). The short newspaper article can be conventionally divided into two parts: the first discusses the problems associated with the pandemic and compensation, and the second offers an overview of some solutions for this.

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The leitmotif of the first part of the article is clear: the HR industry is dynamic and malleable, so the deleterious effects of COVID-19 could not be avoided. Starner makes several arguments to explain the reason for the criticality of the compensation format change debate. First, many companies in the past, including Workday, paid compensation based on an employee’s geographic location. The pandemic has forced people to concentrate on cheaper housing options, which has undoubtedly raised questions about compensation distribution. Second, there was a paradox in the compensation mechanism due to the departure of employees from the office: whether employees should be paid by the amount of work done or by piecework.

In part two, Starner describes some of the solutions companies are using to maintain the availability of compensation while making the entire business profitable. The article’s author particularly emphasizes that compensation is critical for people who stay home with their children. For example, one possibility is to conduct an in-house cohort analysis, which allows for meta-analyses to determine compensation opportunities and size by an employee. In addition, temporary salary reductions and reprioritization of key company positions can be helpful strategies for organizations.

This article is a critical review and expression of the author’s personal opinion in stressful times for communities. In particular, the issue of compensation is strategically significant for companies where these practices existed before the pandemic. Premiums and bonuses from companies help keep employees motivated and productive, and therefore the study of this problem is still critical to HRM theories. Thus, exploring the disconnect between the deleterious effects of COVID-19 and the change in compensation structure is one of the HR department’s primary goals.

My personal understanding of the material is based on careful reading and highlighting critical micro themes. In more detail, I understand that there is a need to pay employees’ compensation consistently in order to keep them engaged. In addition, I am keenly aware that payments are becoming more complex due to changing situations. Employees are leaving offices and relocating, and they are actually no longer working strictly on schedule. Therein lies the critical issue of compensation, as it is no longer clear to the HR department what to compensate and how much to compensate.

In fact, Tom Starner does not give any specific personal opinion or provocative state ideas but instead basically gathers snippets of phrases from executives and HR managers from large companies to make arguments and opinions. Thus, it is only possible to summarize the overall thought of the entire text — to formulate the author’s opinion — with a full review. We can say that the author tends to believe that the pandemic is an essential factor that has seriously changed the HRM agenda. It is impossible not to agree with this: companies are indeed faced with a new threat and have been forced to adapt quickly to the changing conditions. However, we cannot say for sure whether this need to adapt was bad or good: it just was. While the pandemic was undoubtedly a threat to global health and slowed the pace of economic development, it also showed communities the weaknesses of their systems and allowed them to focus on what really mattered.

In addition, Starner cites the view — which he seems to agree with — that cutting wages can be an effective tool for maintaining business profitability in stressful times. This is also a good point, but such actions can have serious consequences. Mainly because of the pandemic, and especially at the beginning of the global quarantine, many people were frightened and permanently stressed. The news of a pay cut in such difficult times could have been a decisive blow to them, so the equation should not always be drawn between pay cuts and company well-being.

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There is no guarantee that problems like COVID-19 will not occur in the future. Knowing and understanding that humanity must always be prepared for such strikes is part of strategic community thinking. As a future HR professional, I already need to build predictive thinking skills, plan and assess consequences, and be prepared for possible outcomes. Reading this material expanded my knowledge and showed me that companies do not tend to be uniform and solve problems in different ways. While some companies may reduce compensation, others may temporarily waive it-there is no one rule that will work universally.


Starner, T. (2020). What COVID Means to Compensation. HRE. Web.

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