The importance and role of compensation strategy in the human resources department

Vouchers Capital bonds reward schemes. They are then in charge of administering, managing and evaluating the payroll, salary structures, and incentive schemes. Basically, they make sure that the right people get the right amount of money, at the right time.

The importance and role of compensation strategy in the human resources department

Human Capital Value Having an in-house human resources function is important.

Orientation and Beyond

For small businesses, in particular, human capital is critical because so many smaller firms have employees who perform cross-functional duties. Budget Control Human resources curbs excessive spending through developing methods for trimming workforce management costs, which includes negotiating better rates for benefits such as health care coverage.

In addition, human resources ensures competitive and realistic wage-setting based on studying the labor market, employment trends and salary analysis based on job functions.

As some small businesses have budget constraints, this human resources function is especially helpful. Conflict Resolution Workplace conflict is inevitable, given the diversity of personalities, work styles, backgrounds and levels of experience among employees.

A human resources manager or a staff person specially trained to handle employee relations matters can identify and resolve conflict between two employees or a manager and employee and restore positive working relationships. Companies in the beginning or growth phases can benefit from identifying training needs for existing staff.

Employee Satisfaction Human resources specialists usually are charged with the responsibility of determining the level of employee satisfaction -- often an ambiguous measurement at best. With carefully designed employee surveys, focus groups and an exit interview strategy, human resources determines what underlies employee dissatisfaction and addresses those issues to motivate employees.

Cost Savings The cost to hire new or replacement workers, including training and ramp-up time, can be exorbitant for employers, especially small businesses.

The importance and role of compensation strategy in the human resources department

With a well-constructed recruitment and selection process, the human resources function can minimize expenses regarding advertising job postings, training new employees and enrolling new employees in benefits plans. Performance Improvement Human resources develops performance management systems.

Sustaining Business Through succession planning that human resources develops, the company identifies employees with the promise and requisite capabilities to eventually transition into leadership roles with the company.

The importance and role of compensation strategy in the human resources department

Corporate Image Businesses want to be known as the "employer of choice. Becoming an employer of choice means human resources balances recruiting the most qualified applicants, selecting the most suitable candidates and retaining the most talented employees.

From the perspective of a small business, creating a cohesive work environment is imperative. The first opportunity human resources has to accomplish this is through wise hiring decisions that identify desirable professional traits, as well as orientation and on-boarding programs.Compensation plays a critical role in aligning employee behavior with business objectives.

Since the industrial age, the four Ms of business management i.e. Man, Material, Machine and Money are said to contribute to the business’s success. Indeed, these roles have a strategic element too, as the needs of the company and employees need to be balanced effectively.

Furthermore, compensation and benefits are directly linked to market changes. Consequently, difficult decisions regarding salary and benefits alterations may .

Strengthening the employer-employee relationship is the strategic role of a human resources manager. However, there’s more to this job than many people realize. Human resources managers formulate workforce strategy and determine the functional processes necessary to meet organizational goals.

Interested in the new roles of Human Resources professionals? Transformation of the traditional role and three new roles for HR staff are provided.

Some industry commentators call the function of Human Resources the last bastion of bureaucracy. Traditionally, the role of the Human Resource professional in many organizations has been to serve as the systematizing, policing arm of executive management. Compensation, benefits and reward careers are all about money.

Consequently, HR professionals who work in this area need to be numerate, commercially aware and have a detailed knowledge of financial laws and regulations.

Human Resources: Compensation, Benefits & Reward Careers | AllAboutCareers