The compensation of employees helps an organization to attain high levels of performance. Furthermore, it is an important activity of human resource management. Additionally, it determines the standards of living, productivity, and loyalty of employees. Compensation is an instrument that organizations use to procure, maintain, develop, promote, and motivate employees. Therefore, an organization must pay adequate attention to formulating and implementing judicious policies about compensation. Primarily, the provision of monetary value in exchange for work forms the basis of compensation. Consequently, employers should quantify the contribution of employees adequately to get the best out of them.
THE OBJECTIVES OF COMPENSATION OF EMPLOYEES
One aim of the compensation of employees is to attract competent personnel. Moreover, compensation retains an organization`s workforce by keeping the pay levels and competitive levels. It helps a company to achieve high levels of performance through the arrangement of incentive payments. These payments motivate employees to work harder hence improving the performance of an organization. Additionally, compensation leads to employee satisfaction. Resultantly, this reduces incidences of grievances and absenteeism and improves the loyalty of employees. This helps to maintain the labor and administrative costs in line.
METHODS OF ACHIEVING HIGH LEVELS OF PERFORMANCE
To ensure high levels of performance, an organization needs to ensure that its expectations are clear to the employees. Consequently, this ensures that employees have clear and achievable goals that they work towards. Moreover, it is important to provide continuous feedback to the employees about their efforts. This helps employees to know when they are making progress. Similarly, recognizing good work and compensation of employees motivates employees to work harder to meet organizational goals and objectives. Resultantly, this enhances the satisfaction and loyalty of employees. An organization should also invest in new technology to improve performance in the workplace.