Framework of a Compensation Policy

Framework of a Compensation Policy

Framework of a Compensation Policy

Employee motivation and performance management depend on good systems that offer both financial and non-financial rewards (non-monetary rewards). This performance management article applies to all organisations.Image result for Compensation Policy
Constant change and high expectations are taking their toll in some organisations, as well as in industry and government generally. Sometimes this is shown in employee turnover.
Sometimes it is hidden because of job insecurity. Many employees make a New Year’s resolution to seek other employment. Many are also seeking more balance in their life.
Rewards and remuneration must be scrutinised. Employee motivation and performance are critical. Non-monetary rewards can be as important as monetary rewards.
In some organisations, a multitude of different salary and pay arrangements exist. It is time to bring these different systems into a new framework. Employees at all levels need to have confidence in the salary administration system. Employees want the rewards to be shared fairly and equitably. If they are not, dissatisfaction can cause severe morale and performance problems.
If they haven’t done so already, leading organisations will need to establish an improved salary administration structure.
It is possible to develop a simple structure that overcomes the difficulties of the past, yet is simple enough for everyone in the organisation to understand. This structure can be tied to a
completely new performance management approach, including better performance appraisal mechanisms.
Some industry’s remuneration systems have been dominated by the industrial relations system. Enterprise bargaining and local area work agreements, individual performance based contracts, and the effect of competition on organisational structures, have had a big impact.
A good rewards and remuneration system ensures that each person receives appropriate financial and nonfinancial recognition to account for the personal contribution they are making and the overall value of their position to the organisation.