Total Compensation Methods Paper The purpose of this paper is to provide an analytical overview of compensation strategies within organizations. First, an analysis of the impact of various compensation methods and benefit programs on employees and organizations will be discussed followed by how salary and benefit administration strategies relate to organizational culture and performance. What are compensation and benefit strategies? Compensation and benefit strategies are ways that organizations can use pay and benefits to recognize and reward employees’ contributions to the organization’s success. (Noe, Hollenbeck, Gerhart, and Wright, 2004) Some examples are wage and salary administration, incentive pay, insurance, vacation leave
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Potential employees see this benefit as a company making an investment in them, resulting in less turnover and more loyal employees. Other types of compensation plans that most organizations offer are forms of paid leave and vacation. (Noe, Hollenbeck, Gerhart, and Wright, 2004) Some of the most common forms of paid leave are holiday pay, sick days, comp – time, and flex-time. Paid leave benefits both the employee and the employer. Paid leave can be used as a tool to retain employees and recruit potential employees that will bring new ideas and aid the company in earning a profit. Paid time off also allows employees to spend quality time with family and handle personal obligations; thus ensuring a positive impact on the company as the employee morale will undoubtedly increase.
Still other compensation methods that look good when recruiting talent are childcare reimbursement and tuition reimbursement. Although it is not typical for a company to compensate an employee for childcare, some companies have plans in place to aid the employee with the financial impact childcare has on working parents. This benefit also shows an employee that the company cares about family. Additionally still, tuition reimbursement programs allow an employee to further their education. Companies will pay for a percentage (if not all) of an employee’s tuition costs as long as the classes are related to the employee’s job. In