Compensation (Essay Sample)

Compensation
Institution
Author
Introduction
Compensation is one of the key instruments that most organization uses to manage the employees. Compensation is a systematic and critical approach in providing either the monetary value or non-monetary value to the employees as a sign of the exchange for the work done. The organization can use compensation to retain or recruit some of the qualified employees, increase morale, provide reward, meet both internal and external equity and encourage loyalty to the company.Thesis The article describes the compensation as an important tool of organization which can help it achieve its objective goals widely. The organization involves in compensation because of the financial crisis that arise within. Therefore, this reason compels the body to lay off most of the well-paid workers and replace them with the lowly paid workers. The cost of operation decreases at a higher rate because of a change in the in the worker's system. The low paid workers signify the low rate of salary payment and hence this shows that the amount that an organization can spend in paying off the employees is reduced. The presence of highly paid workers signifies high salary hence this leads to the enormous amount of salary that an organization can spend to pay the workers. The change in the class of employees did not interfere with the performance of the circuit city. The organization involves in compensation to ensure that the money received is maximum (Milkovich & Newman, 1990). The output should be less than the input to ensure maximum profit gained. The low paid workers have little performance as compared to high paid worker. The implementation of this is low-quality output that influenced the market within the circuit city. The performance of the Circuit city reduced because of the inclusion of the lowly paid workers with the highly paid workers with the highly paid workers. It’s true that the lowly paid workers had low performance and because of the inadequate skills they have. The highly paid workers had good performance because of the high skills they have. Therefore, this resulted in low performance in the Circuit city when there was a change in the working system. All these provide clear evidence concerning the slow performance of the Circuit city (Dodge, 1996). The circuit city still achieves its objectives because of its actual goal. It still get profit from because little amount of money can be spent when making payments to the low paid workers. If the objective function of an organization is met then, it means that the method or the strategy implemented by the circuit city bests solves the problem. Providing room for the high paid employees after layoff best create a good relationship between the human resource and the workers. A balance of nature within the working environment is also enhanced since everybody in the organization is taken care of. The pay of the employee should march the message of the organization. The principal objective of the organization is to make a profit, and this can be increased if the Circuit city reduces the cost for their customers and reducing the expenditure cost (Dodge, 1996). The implementation of this will result in high demand and high supply in the market created by compensation. These illustrate the confidence of evaluation of the compensation benefits to an organization or specifically to the Circuit city.In assessing the compensation strategies, the wage level must be considered. It involves a comparison of the circuit city and other organizations and how the circuit city has to be within the marketplace. Assessment of labor and the average compensation which indicates the total bill for group payment has to be considered. The funds that are allocated to the organization must be considered since it shows the reflection of how the much fund are assigned to the group. All these provide the reliable assessment strategies of compensation that can promote the achievement of the goals of the organization and the objectives. The method of deciding on the compensation level is very crucial tool for an organization that can provide proper assessment.The average amount of wage that is paid to the works referred to as the wage level can be used to assess the compensation in the Circuit City. The salary level influences the occurrence of the desired employees. The low wage level results in the fall of the application pool making the effort of recruitment to be very slow, and this can compel some employees to enough. High wage level also leads in poor results. Reduction in the turnover is bound to happen bellow the required level leading to stagnation. Drift in wage level has significant changes in the payroll of workers. The salary level helps in assessing the compensation level between the Circuit City and other organizations (Sibson, 1990). The high wage employees and low wage employees are paramount when determining compensation. The high wage level is concerned ...