Recognizing Employee Contributions

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RecognizingEmployee Contributions

Humanresource managers are concerned with all matters relating to thesatisfaction of employees and motivating them to meet theorganizational objectives in a productive manner. In the past fewdecades, the significance of HR departments has intensified becauseleaders have continually developed a firm understanding of humanrelations through the works of Herzberg and Maslow. The nature ofthe human resource is constantly changing. Employees are not onlyconcerned with the remuneration, but also personal performance, jobsatisfaction, benefits, recreation, the general work environment, andopportunities for advancement.

Manyfirms have now formalized their pay structures and compensationprograms. At times, the performance management strategies influencethe nature of the benefit plan. Compensation of employees in mostfirms takes the largest share of the operational expenses.Occasionally, it is hard to manage the compensation program due tothe need to ensure a smooth running of other operations within anorganization. The main compensation elements includeindividual-focused, unit-focused, and organizational-focused. Thefactors consider the organizational objectives, base salary, andperformance, among others.

Thepaper seeks to explore various methods that an HR professional needsto use in determining the appropriate incentive as well asrecognizing the employees’ contribution to the company. The paperwill consider the group, individual, and business performance injustifying the methods. It is expected that the new approaches willhave implication for both the company and employees. As such, the HRprofessional will consider approaches that will bring more benefitsto the two entities. In determining employees’ compensation,several legal requirements should be considered in the currentbusiness environment.


Humanresources (HR) managers should realize that companies need to enhanceits employee compensation to sustain business growth and a highlyproductive workforce. Nonetheless, the base pay and benefits packageoffered to the employees does not meet their contribution. The HRmanager should also pay attention to the significance of appropriatecompensation towards enhancing workers’ performance (Massingham &ampTam, 2015). The government can mandate firms to offer certainbenefits to their employees in the course of their engagement.Maslow’s theory of needs explores various employees’ needs thatshould be met to enhance their long-term productivity. Compensationand benefits programs adopted by various companies are out of dateand they necessitate appropriate revision. They have been the primarycauses of employees’ exodus to seek better opportunities.

Accordingto Gupta &amp Shaw (2014), compensation method is a practice withinthe Human Resource (HR) strategy that seeks to enhance employees’productivity. It is a motivational scheme that rewards throughmonetary and non-monetary stuff. The strategy has significantimplications for both the running costs and performance. Ordinarily,the plan describes the pay market and the desired level of outcomes.It is expected that the approaches need to conform to the businessstrategies particularly the HR objectives. It should be monitoredclosely by the executives on a regular basis to ensure the rightschemes are used to motivate the employees.

Onemajor concern in developing a compensation plan is the elements andfactors to consider in creating an acceptable pay package. Some itemsdiscussed include responsibilities, bonus structure, andproductivity. An integrated and structured compensation plan can helpimprove performance and commitment in the workplace. The remunerationpractices in many organizations are changing by the day to conform tothe current needs. Many firms have now formalized their paystructures and compensation programs. In most cases, the strategy isguided by the performance management strategies. Compensation ofemployees in most firms takes the largest share of the operationalexpenses. Sometimes, it is difficult to manage the payment plan dueto the need to ensure a smooth running of other operations within anorganization. Applying discipline on compensation approaches isinstrumental towards realizing positive outcomes. The goal is toensure that the company’s objectives are met while at the same timeaddressing the interests of the employees.

Companiesneed to have an elaborate approach to the development of long-termincentives. The organization of employees is a crucial step as itensures proper management of operations and the development ofemployees. As such, the workforce quickly understands both thepresent and future roles that enhance their productivity. With anappropriate incentive plan, a firm can sustain its profitability andrevenue generation. Compensation practice should be based on severalfactors such as educational qualifications, job experience, jobstation, responsibilities, among others (Gupta &amp Shaw, 2014). Jobdescription and location is a major factor that is considered indetermining the benefits. Senior managers have increasedresponsibilities and resources at their disposal hence the highremuneration. Low-cadre employees are rewarded depending on theirexperience, qualifications and time worked in the organization.

Besidesthe standard pay scheme, the firm should consider offering otherforms of compensation in the form of bonuses, rewards, and payincrements, among others. Bonuses and rewards are awarded afterperformance evaluation. Every employee has a distinct contribution tothe organization. As such, the differing evaluation resultscontribute to differences in compensation. High performers, forinstance, receives higher bonuses and rewards compared to the lowachievers. The drive behind the approach is to reward the performersfor their significant contribution towards the overall organizationalgoal.

Motivationconcerning talent development improves the competencies of theemployees. Moreover, the compensation practice within the company hasled to continuous performance improvement with all the departments.However, compensation practice generates adverse effects on thefirm’s operational plans. With a high number of employees,remuneration takes a significant share of the company’s expenses(Massingham &amp Tam, 2015). Scholars identify that the highly paidand long-tenured employees can threaten the financial standing of anorganization. Whereas some firms have been hesitant to alter thistraditional approach, the financial implications have forced thecompanies to retreat their employment strategies. The shareholdersare also likely to see reduced revenue regarding the value ofreturns. Other stakeholders such as the society may experiencereduced investment on social responsibilities.

Communicatingthe benefit plans to the employees is also a matter that requiresproper technique. The HR manager needs to communicate the informationabout the compensation through private channels. Communication can bedone in the form of a letter addressed to a specific employee. Issuessuch pay increase should not be disclose to other employees. The movemay help eliminate incidences of backlash and sabotage amongst theemployees (Feng et al., 2015). However, rewards and bonuses can bemade public to the employees through memo or emails. Bonuses aremeant to motivate all staff at a go. Further, the bonus structure isdesigned to benefit groups as opposed to individuals.

Thelegal regime in each country has significant effects on thecompensation plan adopted by the organization. It is a requirement inevery jurisdiction that the firm observes the laws and regulationsthat guide the HR practice. In the US, for instance, the firm has tocomply with the minimum regulations proposed by the federalgovernment. The labor unions influence the compensation plan for manyorganizations (Kim, 2014). Ideally, labor unions advocate for therights of the employees. The company should allow its employees tojoin labor unions to champion for their rights, including workingconditions and remuneration (Feng et al., 2015). The unions havesignificant influence on the compensation practice since they arecreated to ensure that employees are awarded good and fair pay.

Inaddition, the firm has to observe the regulations and legislationswithin every operational area. It is through these laws thatcompanies avoid lawsuits and reproach from lobby groups andauthorities. It is hence important for the enterprise to create agood relationship with the authorities and lobby groups by adheringto the established laws and practices regarding employee compensation(Kim, 2014).

Accordingto Vosloo, Fouché, and Barnard (2014), excellent remunerationapproaches have played a significant role in the addressing theemployees’ needs. Ultimately, the plan will increase the firm’scompetitive advantage and consistently enables the company to supplythe customer with its products and services Organizations need tocome up various policy guidelines and measures that can be used bythe administrators in facilitating the achievement of the positiveoutcomes. Consultation enables the HR professionals to developappropriate solutions that are unique to the business strategy andprovide guidance to business unit teams and managers on the bestcompensation practices.

Thecompany is likely to face ethical risks when implementing the payincentives. The managers may use the opportunity to inflateoperational costs and stocks. Dishonesty among the shareholders maylead to issuance of incorrect company earnings. The move may alsobring along accountability issues and non-compliance to auditingstandards. Further, inadequate pay structures may jeopardize thequality of work. Employees are likely to undertake their jobs poorlyin the name of earning an incentive. As such, the move undermines thereputation of a company. Enhancing the performance measure is animportant step towards addressing the risks. In fact, the companyshould offer non-monetary incentive such as training and holidaytrips. The company needs to observe the guidelines set by regulatorsregarding accounting and auditing standards. Compensation may also becontrolled by the units or departments within an organization(Vosloo, Fouché, &amp Barnard, 2014). The employees within a unitare awarded bonuses to cover their expenses. The sections have variedresponsibilities and the outlined tasks act as the basis to determinepay. Further, employees earn money through profit sharing. When thebonuses are large, the base salary is low. The move is meant tocushion firms from high operational costs and unethical risks.


Itis through appropriate compensation strategies that an organizationcompetes satisfactorily within the market. Good HR strategies help acompany to adhere to the established standards and businesspractices. In the compensation practice, the firms need to developappropriate strategies that will enhance fair remuneration for theemployees. The criteria for compensation need to adhere to the bestHR practices and standards. The base salary does not necessarilyinfluence the nature of bonuses and rewards. The retail companyrequires an elaborate compensation strategy to reduce workforceturnover as well as enhance productivity. With proper remuneration,the employees are motivated to increase their productivity hencedrive the firm’s business agenda. The benefits realized by thecompany will be evident in the sales and revenue generated during agiven financial year.


Feng,M., Wang, X., &amp Saini, J. (2015). Monetary compensation,workforce-oriented corporate social responsibility, and firmperformance.American Journal of Business, 30(3),196-215.

Gupta,N., &amp Shaw, J. (2014). Employee compensation: The neglected areaof HRM research. HumanResource Management Review,24(1),1-4.

Kim,C. (2014). Exploring determinants of state employee union density inthe united states.The International Journal of Public Sector Management, 27(1),53-65.

Massingham,P., &amp Tam, L. (2015). The relationship between human capital,value creation and employee reward.Journal of Intellectual Capital, 16(2),390-418.

Vosloo,W., Fouché, J., &amp Barnard, J. (2014). The relationship betweenfinancial efficacy, satisfaction with remuneration and personalfinancial well-being.The International Business &amp Economics Research Journal (Online),13(6),1455-1470.

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