innovative practices in compensation management report

7/27/2019 Innovative Practices in Compensation Management report

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HUMAN RESOURCE MANAGEMENT

SEMINAR REPORT

ON

INNOVATIVE PRACTICES IN

COMPENSATION MANAGEMENT

Submitted To: - Submitted By:-

Ms. Vinitha Shafin P (50)

Dept. of Management Science S2 MBA

MESCE


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INTRODUCTION

Compensation management is a key activity for supporting workforce performance and

talent management processes. Determining and providing the right compensation for each

person, whether it involves base or merit pay or variable pay and incentives, is critical to being

able to attract and retain productive members of the workforce, employees and contractors alike.

Today, the activities and systems that support compensation for executives, variable pay

and rewards for those in sales, field service and contact centers, as well as stock and other

incentive programs, are diverse and complex. As organizations consider advanced practices such

as pay for performance and talent management, many are finding they need a comprehensive and

more strategic approach to compensation.

The growing understanding of the need to recruit and retain quality staff has added to theconcern over how to structure compensation policies and programs to be fair and competitive.

Incentive plans and other innovative compensation and human resources practices are becoming

critical elements in the organizational strategy.

Compensation management is a central content of human resources management in

modern enterprise. With the increasing changes of inside and outside business environment of

the enterprise, it has flung down a bigger challenge to compensation management. It has a vital

significance on how to motivate the employee through innovation in compensation management.

Innovation in compensation management effectively motivates the employee and achieves

sustainable development of modern enterprises.


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INNOVATIVE COMPENSATION PRACTICES

Innovative compensation practices encompass cash compensation and recognition plans.

The following are examples of innovative cash compensation or recognition plan options:

Individual incentives Team or group incentives Bonuses Spot awards Special cash recognition Special non-cash recognitionGuidelines for Implementing Innovative Compensating Plans:-

The following guidelines provide considerations for nonprofit organizations which may

be interested in implementing an innovative compensation plan.

1. Nonprofit organizations should first conduct an assessment to determine theappropriateness of innovative compensation to their culture and organization. This

assessment should focus on the objectives to be achieved through implementing an

innovative compensation program, what motivates staff, the opinions and views of

members, constituents, volunteer leaders, and the financial resources available.

2.

Any innovative compensation program should be viewed as part of a total approach tocompensation and carefully integrated into the design of that program. A market analysis

of current compensation levels related to the jobs in the organization should be conducted

in the early stages or prior to developing a program.

3. The innovative compensation program, especially management incentive programs thatprovide significant opportunities for financial rewards, should be clearly tied to

performance. The program should demonstrate the achievement of overall organization

objectives in finance, program, development, client service, membership, public affairs,

government relations, community relations, and any other areas deemed important to the

organization.

4. The innovative compensation program should include both quantitative and qualitativecriteria.


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5. Organizations should consider pilot testing an innovative compensation program on aselected group of staff before introducing it to all staff. More than one innovative

compensation program should be considered, especially in larger organizations. The

majority of nonprofit organizations in the survey had implemented at least two types of

programs.

6. Innovative compensation programs should be well communicated to staff and used as avehicle to announce the success of employees, teams, and the organization.


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CONCLUSION

If a formal management incentive program is not an option because of our size or limited

budget resources, we may wish to consider the adoption of certain innovative compensation

programs which are not very costly and can have a beneficial impact on employee morale. Theseinclude non-cash recognition programs, cash recognition programs such as spot awards,

flextime/staggered hours, and a flexible spending account. Based on our experience, many of

these programs are highly valued by employees since they provide flexibility. These plans incur

little or no cost to the organization. Expert compensation and legal advice may be needed and

should be considered by nonprofit organizations before implementing innovative compensation

plans.

innovative practices in compensation management report

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