Discuss the relationship between the strategic decisions and compensation practi

Question

Discuss the relationship between the strategic decisions and compensation practices of your current or former organization (Alternately, you may conduct online research to select an organization of your choice). Next, identify at least two (2) advantages and disadvantages associated with the compensation practices.

Based on your response from the first part of the discussion, explain whether the organization’s approach to compensation management is a good fit for its business strategies. Provide rationale to support your information.

Explanation / Answer

Strategic decisions get classified as long-term and composite resolutions that any business has, and the top managers make them. Such recommendations tend to affect the business unit as whole since they have a direct impact. Therefore the resolutions have effects on the compensation practices on any given firm.

It is through the laid strategies that the human resource can quote the salaries of the employees. The strategic decision specifies the kind of pay components that will provide a non-biased vision that will foster the development of the business. They also guide on the best practices to be used to ensure that the different kinds of the compensation used to give the desired outcome. Also, they establish the best methodologies to communicate the rewarding strategies in a way that employee's mindsets get motivated. For example, in my organization, we have straight salaries, overtime pay plus allowances such as medical coverage.

In straight salaries, payment and employee have security, unlike a commissioned-based position. It is also the most stable type of compensation practice that employees can enjoy. However, it is faced with challenges such as complexity to the administrator. The payroll staff has to manage both the salary and commission aspects of pay. Also where the commission is involved the critics point to the execution challenges rather than motivating employees with the commission.

The organization approach is fit for the business strategies. The compensation practices are as par to the ones used by other business in the business environment. Therefore the organization gives or poses a stiff competition with other equal employers and thus there is no threat of losing workers.

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