Recognizing Employee Contributions - Compensation & Benefits Essay

Recognizing Employee Contributions - Compensation & Benefits - Essay Example Every firm develops a specific structure of compensation and benefits. Incentive pay is an integral part of benefits being offered to employees. In this particular study views and opinions will be given to a new retail company so as to retain its talented base of employees. Team members tend to leave an organization when they are not satisfied with organizational environment or their compensation structure. It is major responsibility of HR manager to continuously modify compensation framework in order to deliver the best benefits to employees. Workforce can be motivated either through monetary rewards or non-monetary appreciation. This study outlines current scenario of a retail company that is into internet sales as well as has retail outlets. Employee survey in the firm has revealed that employees are not satisfied with compensation system and are leaving jobs. In this study different approaches would be highlighted that can help to retain employees and facilitate developing approp riate compensation system. Incentive pay is essential for retaining employees within the system. Pay can be defined as the first reward that is given to managers or employees. Incentives are additional benefits given to employees so as to motivate them for undertaking new challenges. Pay can be classified into three segments such as basic pay, pay for performance and merit pay. Basic pay occupies the main portion of compensation and is referred to as hourly wage or salary. Merit pay is totally based on predetermined criteria. On the other hand, pay for performance can be defined as incentive pay system. Rewards are given to distinguish between competencies possessed by team members and their respective contributions towards firm’s overall success. There are certain new pay techniques that can be adopted by the retail company so as to retain its employee base. Amongst all the techniques two mechanisms are most suitable in the given situation such as