Which Meaning of Compensation Seems Most Appropriate from an Employee's View: Return, Reward or Entitlement?
Which meaning of compensation seems most appropriate from an employee’s view: Return, reward or entitlement? Compensation and Benefits remain as an invaluable tool to attract, motivate and retain qualified candidates. Compensation refers to the wages and other non-financial forms of compensation that an organisation pay to employees for the work they do. Compensation can be given out to employees in the form of pay, incentives, and benefits for performing their job. A total compensation and benefits package aids the organisation in increasing and maintaining the individual’s and team’s morale, encourage motivation towards peak performance, achieve internal and external equity, and increases employees’ loyalty to the organisation. When employees see compensation as a form of entitlement, they might feel that this compensation is unconnected with their accomplishment. Compensation systems are meant to attract, retain and motivate employees. When employees see their compensation as a form of entitlement, the motivation effect ceases. Employee reward and recognition programs are one method of motivating employees to change work habits and key behaviours. Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the company. Reward systems may be used as a tool to lure top employees in a competitive job market as well as to increase employee performance. Though employee recognition programs are often combined with reward programs they retain a different purpose altogether. They are intended to provide a psychological—rewards a financial—benefit. Although many elements of designing and maintaining reward and recognition systems are the same, it is useful to keep this difference in mind, especially for small business owners interested in motivating staffs while