Personal Reflections on Fair and Equitable Compensation Essay

1042 WordsDec 8, 20145 Pages
Personal Reflections on Fair and Equitable Compensation November 9, 2014 Introduction Fair and equitable compensation has many advantages for both employees and employers. If a worker perceives that their compensation is both fair and equitable then they are likely to not have intentions to quit, be dissatisfied, or look for employment elsewhere. They are also more likely to put forth their best effort which translates into higher organizational performances. There is certainly a mutually advantageous position that can be reached through fair and equitable compensation for both sides of the agreement. However, determining what constitutes fair and equitable compensation can be a challenging proposition for employers and employees. This analysis will provide a background on employment compensation as well as some personal opinions on how this balance can best be reached. Background In the world of human resources management (HRM) on of the drivers of the last few generations has been globalization. Companies have expanded in size and now operate in many international markets across the globe. This has also corresponded with a large push for standardization of different human resource operating procedures that include compensation. The standardization of compensation policies has led to a situation in which HR managers generally have a range of different options in which they can design a compensation package. The standardization of human resources policies often limits the options for a compensation package. The packages are generally set in a range of the market rate for a set of skills and qualifications. However, there has been a general pushback by organizations to have more flexibility in many HR decisions including compensation. This trend has been called devolution in the industry and it is working to reverse some of the negative

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