Research Paper (undergraduate) from the year 2007 in the subject
Leadership and Human Resources - Miscellaneous, grade: 1,3, University
of Applied Sciences Berlin, course: Human Resource Management, language:
English, abstract: To meet business challenges today and tomorrow,
companies must maximise the potential of their workforce while
increasing efficiency. In a highly competitive business environment,
companies can differentiate themselves through their employees.
Employees understanding the business carry out operations, mitigate
risk, and build strong brands. Today, there is much more concentration
and focus on the strategic outcomes of human resource activity than ever
before. The area of compensation is no exception. Compensation can be
used to recruit and retain qualified employees, to increase or maintain
morale / satisfaction, reward and encourage peak performance, achieve
internal and external equity, reduce turnover and encourage company
loyalty. As a result, pay-for-performance systems using variable pay
components are becoming more and more popular to reward for exceptional
job performance. There is far more interest in more closely linking the
reward mechanisms to the achievement of corporate objectives.
Performance pay as one component in the total employee compensation can
be assessed based on individual or team contribution, on business unit
results or a corporate profit or share price. It can be rewarded through
traditional salary adjustments but also through variable pay techniques
such as lump-sum bonuses or stock options. There are no standard schemes
or rules on how and to what volume a company should integrate variable
pay into its total compensation systems. It not only depends on what the
company focuses on but also on the company's employees, their attitude
to work and to the company as a whole. But employers should have in mind
that a compensation plan that fails to motivate employees can stagnate a
company as fast as any other factor.
