What is the philosophy of compensation?
All companies have to determine how and what to pay to their workers and when to offer things such as increase, bonuses and other incentives. Businesses of all types tend to do it randomly. Rather, they develop what is called the philosophy of compensation. This is a real plan for employees to be paid, when payments will increase, and when bonuses are appropriate. Such a plan is often made available to employees, so they feel the philosophy of the organization, so they can determine their treatment of organizations because it concerns compensation, not only at present, but also in the future.
Some of the things that affect the philosophy of compensation include the current income of the company, and the expected profits in the future, the market value of the jobs for which the company hires, and the degree of competitiveness in the types of jobs offered by the company. The way the organization perceives its employees and its responsibility for these employees is favored by the philosophy of compensation. In principle can many differentElements contribute to how the employer determines the level of remuneration, increase and bonuses.
It can be easy to create a philosophy of compensation in some areas. For example, those who require a growing level of expertise and education usually have set rates and may have the scope of salary that corresponds to market values and give employees something to focus on. For example, hospitals can hire employees of a number of types and a clear reward for nurses than doctors or kindergartens. Moreover, it will be different for nurses of different types. LVN will have a lower salary range than RN, doctors are paid more if specialists are, and school staff do not have a salary that is close to nurses or doctors. Businesses such as hospitals may have to consider any jobs that are because it can affect reward rates or tables for progress and increase.
one thing that often has toAbout organizing is how to set up an increase. Some companies leave this open or may not provide any types of increase or bonuses in harsh economic times. This is usually a short -sighted approach, although it is sometimes necessary. As employees work, the value of their remuneration tends to reduce if living costs increase while gaining experience and expertise in their field and showing the company's loyalty to continue working for the company. Such an approach over time can be a recipe not to preserve experienced employees, because it still does not claim the value of the employee and depreciates it. To have a clearly mentioned philosophy of compensation can partially solve this problem; If the company has a policy that is not increased, employees who work for it know in advance, this policy exists, but the maintenance of employees can still be difficult.
Most companies have some form of philosophy of compensation and it is absolutely necessary to be consistently APliking. If the fair use of any policy fails, it can lead to discrimination of employees, especially if it seems to be a systemic failure that affects a single sex or racial group. If there are any changes to be made in the way people are paid in the future, all employees must also affect these changes. Therefore, no matter how the philosophy of compensation is developed, it is not flexible as soon as it becomes a policy.