HRM-7002 v4: Compensation and Benefits
Week 1
Organizational Implications of Compensation and Benefits
When you think of compensation and benefits, what comes to mind? Is it money, health insurance, or retirement benefits? Compensation and benefits can encompass all of this and more. A compensation and benefits strategy is an arrangement or technique an organization uses to provide monetary amounts, benefits, and other types of rewards to workers who accomplish particular business objectives. The methodology joins pay, performance, and the opportunity for employee development inside a steady workplace. A strong compensation and benefits system can enable an organization to balance between providing competitive market wages to attract high-quality candidates who will stay with an organization and maintain an adequate spending budget.
Have you or is there someone you know that has ever felt stuck in a position with no room for growth? How did this affect employee and peer morale? In turn, how did this influence your company culture, bottom line, and organizational strategy? On the other hand, have you ever noticed thriving companies often have employee development opportunities? In general, employees enjoy growing and will often stay in their positions longer and work harder for their company if they feel they have an opportunity for growth and development. This brings tremendous value to both the employee and employer, which contributes to the overall success of an organization.
Developing a compensation strategy from the ground up can be a challenging undertaking for any organization. There are many dynamics to consider, and depending on the industry or sector, these challenges can vary greatly. A necessary first step in ensuring organizational alignment regarding compensation and benefits design is to ensure you have senior management buy-in. Without this, any efforts toward alignment may seem futile. Additionally, human resources should involve all departmental representatives as well as those employees on the front line to ensure a well-balanced approach is considered to attempt to meet the needs of those in the organization.
Also, considerations must be made for organizations that may operate in a union environment. This means that collective bargaining may influence how the compensation strategy will be implemented. Working with unions is somewhat different in that management and union representatives will negotiate salary components such as the amount, frequency, and other items when discussing compensation. Human resources functions as a neutral third-party representative to help guide the process along.
Ultimately, you can see various perspectives must be considered when determining the value of compensation and benefit plans for organizations. In addition, organizations should consider both the intrinsic and extrinsic rewards that employees may be seeking. Intrinsic rewards are non-monetary, such as recognition for a job well done or allowing an employee to work from home. It is a reward that enhances an employee’s feeling of self-worth and value to an organization. Even though it costs nothing, it can be one of the most powerful rewards and motivators within an organization. Extrinsic rewards are the more tangible, monetary rewards, such as wages and salaries, benefits, holidays, and days off.
As you can see, there are several considerations for HR professionals to remember when planning, designing, and implementing compensation and benefits packages. Your first assignment provides you with the opportunity to reflect on these concepts.
Signature Assignment Preview
The culminating case study signature assignment is due in Week 7 but may require you to complete some work ahead of the due date. To ensure you are prepared and have adequate time to complete this assignment, please review the instructions by looking ahead to the signature assignment. Contact your professor if you have questions.
Weekly Resources and Assignments
Week 1 Resources
• Ask Us! How do I Login to the O’Reilly for Higher Education Database and Access Content?
Northcentral University Library. (2021). Ask Us! How do I login to the O’Reilly for Higher Education database and access content? Northcentral University.
The following two texts you will use throughout this course are housed in the O’Reilly for Higher Education database within NU’s library. Use this FAQ to complete an initial login process. Once you have done this, you should not be prompted again when accessing these texts.
Biswas, B. D. (2014). Employee benefits design and compensation (collection).
WorldatWork. (2007). The WorldatWork handbook of compensation, benefits & total rewards: A comprehensive guide for HR professionals.
• The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals
WorldatWork. (2007). The WorldatWork handbook of compensation, benefits & total rewards: A comprehensive guide for HR professionals. Wiley. ISBN: 978-0470085806
Read Chapter 1: Total Rewards: Everything That Employees Value in the Employment Relationship.
• Emerging from the COVID-19 Pandemic: Returning Employees and Benefits Considerations
Bokert, M. E., & Hahn, A. (2020). Emerging from the COVID-19 pandemic: Returning employees and benefits considerations. Employee Relations Law Journal, 46(2), 82–88.
• Incentives to Move Up: Effects of Pay Gaps Between Levels on Employee Performance
Chi, W., Liao, H., Wang, L., Zhao, R., & Ye, Q. (2019). Incentives to move up: Effects of pay gaps between levels on employee performance. Human Resource Management Journal, 29(2), 238–253.
• How HR Can Contribute to Organizational Viability and Competitive Advantage: A Three-Pronged Approach
Hegarty, N., & Jude, M. (2018). How HR can contribute to organizational viability and competitive advantage: A three-pronged approach. Performance Improvement, 57(7), 30-35.
• Workplace Compensation Practices and the Rise in Benefit Inequality
Kristal, T., Cohen, Y., & Navot, E. (2020). Workplace compensation practices and the rise in benefit inequality. American Sociological Review, 85(2), 271–297.
• Employee Benefits: Thinking Beyond the Paycheck
Purdon, E. (2018). Employee benefits: Thinking beyond the paycheck. Journal of Financial Service Professionals, 72(3), 11-15.
• Recruiting Millennials: Exploring the Impact of CSR Involvement and Pay Signaling on Organizational Attractiveness
Waples, C. J., & Brachle, B. J. (2020). Recruiting millennials: Exploring the impact of CSR involvement and pay signaling on organizational attractiveness. Corporate Social Responsibility & Environmental Management, 27(2), 870–880.
• Week 1 – Assignment: Assess the Value of Compensation and Benefits
Assignment
This week’s lesson and resources provided you with a foundational understanding of compensation and benefits. You have also learned why it is important to align compensation and benefits with organizational strategy and how the value employees place on compensation and benefits plays a role in this strategic alignment.
For this week’s assignment, begin by researching recent journal articles in the NCU library to explore the following:
• What value do employees place on compensation and benefits?
• What factors do organizations consider when aligning organizational strategy with compensation design?
• How do organizations integrate equity in their compensation practices?
• How does remote work impact compensation considerations?
• What are some of the global implications when considering a compensation design?
Prepare a written interpretation in response to these questions. Include a chart in your paper listing the extrinsic and intrinsic values which employees may seek in compensation and benefit plans. Support your findings with current trends or events in the field or other examples as appropriate.
Length: 4-6 pages including your chart, but not including title and reference pages
References: Include a minimum of 3 scholarly references.
The completed assignment should address all of the assignment requirements, exhibit evidence of concept knowledge, and demonstrate thoughtful consideration of the content presented in the course. The writing should integrate scholarly resources, reflect academic expectations and current APA standards.