Action Plan for Implementing Compensation Policies - Assignment Example

Running Header: Manage Human Resource Management Name: Course: Institution: Tutor: Task 1 Selected area: Compensation Compensation is an important Human Resource (HR) management function through which organizations manage their employees. In order for an organization to motivate and develop skilled employees and receive its money’s worthy, it should ensure that its compensation system is aligned with the long term strategic objectives and goals (Scullion, 2001). Not only is it important for organizations to link compensation to overall strategic goals and objectives, but it is important that the compensations system is aligned with the organization’s long term HR strategy. For many businesses, ignoring the compensation system can be deleterious to organizational performance. This is because, it can be laborious and expensive for an organization to hire employees, reinvigorate the energy and motivation level of the workforce and buy back the trust of current employees (Zilber, 2002). Thus, failure to address the issue of compensation can have detrimental impacts in the short term and long term. Some of the most important services that can be provided through compensation in typical organizations include payroll administration, performance appraisals, reward and recognition, wage comparisons, job descriptions and developing incentive pay policies. Zilber (2002) has noted that successful organizations do regular evaluation and planning of their compensation systems. Because compensation has visible and direct impact on employees, it is necessary for HR persons to provide clear messages to employees regarding how compensation decisions are made (Truss & Gratton, 1994). This way, organizations can cultivate high levels of employee motivation and job satisfaction, which in turn result in improved organizational performance. To develop sound compensation systems, it is important for HR managers to view the issue of compensation from multiple dimensions taking into consideration both the employee and the employer’s interests. Task 2: Customer Need Assessment Form a. How long have you been associated with our company? b. What is most enjoyable about our company’s HR compensation policies? c. What is the least enjoyable about our company’s HR policies? d. Do you consider our compensation plan to be average quality? High-end? Low-end? e. What do you consider to be special about our HR approach as regards compensation? f. What would you like to be featured in our human resource practices? g. What do you consider to be the primary customer service experience in our compensation policy? h. Are our human resource functions offering the kind of experience you need? i. What do you feel is our unique human resource policy practice? j. Do you think there are any misconceptions about our compensation plan that you would like to be addressed? Task 3: Compensation Legislations to be observed There are numerous legislations that may apply to compensation. However, most of these legislations are subject to change or amendment depending on the powers and interests of the jurisdictional authority that enact them. Each territory in Australia has its own legislative body governing employee compensation for both public and private companies. The Workers Rehabilitation and Compensation Regulations 2010 (WRCR 2010) is an important legislation that spells out numerous obligations that organizations should observe as part of their compensation policies. This legislation has numerous sections which cover a wide area of compensation issues including benefit packages, payment of levy and insurance of employees against liabilities (Balnave, 2007). In addition, the legislation gives legal protection and grants workers the right to join unions for the purpose of collective bargaining or other mutual protection. Historically, most of Australia’s compensation legislations have been pegged on the need for collective bargaining. It is important for Human Resource managers to observe these statutory legislations by integrating them into the company’s compensation program. Human resource managers can ensure that relevant compensation legislations are observed by consistently working with the executive management in formulating appropriate compensation policies (Truss & Gratton, 1994). This requires that the HR managers communicate the necessary legislative requirements to the executive managers as often as necessary. Moreover, the HR can excel in observing compensation legislations by encouraging the company to be innovative, quality driven and fair in implementing compensation policies. This means observing both statutory and company-specific regulations. It is also imperative for the company to encourage transparent financial reporting so as to ensure that the company sets aside enough funds for compensation purposes (Scullion, 2001). Task 4: Action Plan for Implementing Compensation Policies The following action plan for implementing compensation policies in the company is aimed at delivering consistent and improved response to management of compensation related functions. Ultimately, modifications to any arrangements in the compensation plan will be aimed at striking a reasonable balance between the interests of employers and employees as regards compensation. The major action areas are: i. Establish and maintain regular consultation mechanism with the employer, employees and workers union regarding workers compensation matters. This consultation will help provide advice on strategic issues that the company should address in implementing compensation policies. The initiative will also help in engaging employees in developing compensation programs. ii. Provide advice on assessment and identification of strategic compensation issues which will help improve employee’s compensation programs. iii. Develop and harmonize the company’s comparative information regarding workers compensation requirements. iv. Establish and maintain liaison mechanism with government stakeholders. This will help provide input and other resourceful information required for the preparation of stock-take on the national workers compensation policy and legislation. v. Carry out regular investigations and report on policy matters relevant to compensation. This function will also entail considering recommendations from the executive management on compensation approaches. vi. Investigate and report on available alternatives for company-wide harmonized guidance on compensation matters with the aim of improving associated outcomes. In addition, this plan will involve conducting an analysis and reporting on the themes and consistency of guidance materials. vii. Collect, analyse and maintain an up to date employee’s compensation data and performance appraisal information. Task 5: Service Agreement between HR Department and Internal Customers for Delivery of Services in Compensation a. Agreement Overview: This Service Agreement presents the terms of agreement between the company HR department and employees (internal customers) regarding services and activities required to develop and implement appropriate compensation policies. The purpose of the agreement is to ensure that the right elements and procedures are put in place to provide consistent and fair compensations plans to employees. b. Service Agreement: The following service parameters are the responsibility of the Human Resource manager as part of the ongoing support of this agreement: payroll administration, performance appraisals, reward and recognition, wage comparison, job descriptions and developing incentive pay policies. c. Customer obligations and requirements: the customers main responsibilities in support of this agreement include: i. Payment of necessary support costs at agreed interval. ii. Reasonable availability of representatives when resolving service related issues. iii. Meeting response times associated with service incidents. d. Service Management: effective support of this service agreement is subject to all stakeholders’ commitment to maintaining consistent service levels. In particular, there will be a customer care service call centre for responding to customer queries. Remote assistance will be provided depending on the priority of customers requests. e. Service Agreement Assumptions: the only assumption related to this agreement is that changes to terms of service will be communicated to all stakeholders as soon as the change arises. Task 6: a survey for collecting feedback from customers about the company’s human resource practices in the area of compensation a. How convenient are our services to use? Highly convenient Very convenient Somehow convenient Slightly convenient b. How professional are our company’s Human resource practices? Highly professional Very professional Moderately professional Somehow professional Slightly professional c. Compared to other companies how are our HR compensation practices? Extremely better Somewhat better Slightly better There is no difference Slightly worse Somewhat worse Extremely worse d. Compared to other companies (our competitors), are our compensation packages reasonable, about the same or less reasonable? Highly reasonable Slightly more reasonable About as the same Slightly less reasonable Much less reasonable e. How Responsive Are Our Human Resources? Highly responsive Very responsive Moderately responsive Slightly responsive f. Not responsive at all How satisfied are you with our customer service representatives? Very much satisfied Moderately satisfied Slightly satisfied Not at all satisfied g. Overall, how satisfied are you with the employees at our company? Extremely satisfied Moderately satisfied Slightly satisfied Neither satisfied nor dissatisfied Slightly dissatisfied Extremely dissatisfied h. To what extent do you like our company and its customer service experience? Like an extreme extent. Like to a moderate extent Like a little Neither like nor dislike Dislike a little Do not like at all i. How likely are you to recommend our company to other people? Highly likely Very much likely Moderately likely Not likely at all Task 7: Ethical Issues Related to Compensation that HR Managers Should Observe Of all the issues that HR managers face, ethical issues are the most problematic and often difficult to solve. Ethical issues arise in compensation and are directly or indirectly related to employment, remuneration and benefits, health and safety and industrial relations (Purcell, 2001). The main ethical obligating relating to compensation, which human resource managers will have to observe are: i. Benefit plans: there are numerous ethical dimensions relating to salaries, annual incentive plans and executive perquisites. Human resource managers are often under pressure to raise the limits of base salaries. In addition, there are increased pressures on the human resource function to increase incentives for top management (Kamoche, 1996). Additionally, ethical issues arise when long term incentives and compensation plans are designed in consultation with external consultants or though outsourcing. Perhaps, pay equity is the most important ethical issue as regards compensation plans. Pay equity, also called fairness of pay can be evaluated externally and internally. According to the equity theory, employee motivation is subject to what they earn vis-à-vis what they bring to the organization as compared to some reference persons (Brewster, 2001). As such, HR managers have a duty to determine the most optimum pay level that matches employee’s responsibilities, experience and efforts. External equity in compensation can be determined through market surveys. This enables companies to share information on their pay and benefits in jobs. ii. Race, Disability and Gender: in many organizations, employees are differentiated on the basis of gender, race or disability. This can be a daunting ethical challenge to human resource managers particularly when developing compensation plans for employees. In more successful organizations, the only differentiating denominator should be performance and ability to deliver on key outcomes (Monks. & McMackin, 2001). As such, human resource managers should be trained to reward performance and behaviors and not to engage in discriminatory practices. iii. Privacy Issues: every employee working in an organization has a personal side which they expect to be kept confidential and not be intruded into. While developing compensation programs, HR managers have an ethical obligation to protect the personal lives of employees. This may encompass things like religion, social and political beliefs as well as family history and background (Clark, Grant & Heijltjes, 2000). However, certain circumstances may arise, which compel snooping behaviors by HR managers. For instance, mail scanning is a common practice by HR managers in tracking the activities of employees, especially those employees who are suspected of engaging in activities that are not in the befit of the company (Brewster, 2001). iv. There are also ethical issues pertaining to matters of compensation in case of health and safety issues, layoffs and restructuring and employee responsibilities. References Balnave, N 2007, Employment Relations in Australia, New York, John Wiley & Sons. Brewster, C 2001, HRM: The comparative dimension. In J. Storey (ed.), Human resource management: A critical text (pp. 255–71), London, Thompson Learning. Clark, T., Grant, D. & Heijltjes, M 2000, Researching comparative and international human resource management, International Studies of Management, 29(4), p. 6–23. Kamoche, K 1996, Strategic human resource management within a resource-capability view of the firm, Journal of Management Studies, 33(2), p. 213–33. Monks, K & McMackin, J 2001, Designing and aligning an HR syste, Human Resource Management Journal, 11(2), p. 57–72. Purcell, J 2001, The meaning of strategy in human resource management. In J. Storey (ed.), Human resource management: A critical text (pp. 59–77), London, Thompson Learning. Scullion, H 2001, International human resource management. In J. Storey (ed.), Human resource management: A critical text (pp. 288–313), London, Thompson Learning. Truss, C. & Gratton, L 1994, Strategic human resource management: A conceptual approach, International Journal of Human Resource Management, 5(3), p. 663-686. Zilber, T 2002, Institutionalization as an interplay between actions, meanings and actors: the case of a rape crisis center in Israël, Academy of Management Journal, 45, pp 234-254. Read More