The worker compensation is a sensitive issue for HR specialist because the processes and structures should be effectively managed to reduce employee revolt. Indeed, it should be highlighted that an effective employer coordinates with HR manager to develop an adequate compensation plan and budget taking into consideration organizational head count and labor expenditures. Lack of remuneration planning leads to delays in release of employee salaries, which in turn adversely impacts employee productivity, motivation, morale, commitment, trust and goal-directed behavior. In addition, the organization should fulfill any promises made about overtime, cash compensation for additional tasks and benefit costs to send a clear message that the employers ethically meet all contract obligations and responsibilities. For instance, the organizational promises regarding inclusion of healthcare benefits, gratuity and retirement plans in compensation must also be satisfied to retain employee trust and market goodwill. (Milkowich, Newman & Gerhart, 2011)
Milkowich et al (2011) also elucidate on the fact that the compensation plan should be designed as a motivational strategy to enhance employee need satisfaction and result orientation. In fact, the performance based compensation is more likely to keep employees on their toes to accomplish realistic work objectives and organizational targets. However, the employers often decide to change existing compensation plan if there is no significant improvement in employee performance, if there are financial burden on organization or if the current compensation structure is benefiting few employees but unfair for majority. The critical risk is to devise the right communication message to communication change in compensation plan to minimize resistance. For this purpose, the HR practitioners develop an inclusive communication strategy through which the employer explains the need for change to link it with organizational performance and employee welfare. Any criticisms are addressed during face-to-face discussions to revive employee job motivation, confidence and trust (Dias, 2012).
Dias, L. P. (2012). Human Resource Management. New York: Flat World Knowledge
Milkowich, G. T., Newman, J. M. and Gerhart, B. (2011). Chapter 17-18 in Compensation, 10 Edition. New York, NY: McGraw-Hill/Irwin.