Human Resource (HR) Compensation Strategy Essay
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Human Resource (HR) tasked with the responsibility of offering pay and compensation guidance and also the administration of a uniform compensation program that is applied in all departments of the company as noted by Armstrong and Armstrong (2009). Having an HR that achieves goals of equitable and fair market compensations is the ultimate aim of every institution. Furthermore, HR administers the classification and the pay system. Every employee of a company placed in a job classification that shows his/her responsibilities and the pay range for the particular classification as noted by Mathis and Jackson (2003).
In the hotel industry, one key HR decision that is made by the firm is the design of the compensation policy. Before the plan rolled out as researched by Greenberg and Haviland (2008), several key and also complex decisions need to be made because the policy will have an impact on the industry recruitment and withheld as well as ensuring the goals of the organization attained. With the compensation strategy rolled out it means expected improvement of morale, reduction in the turnover and the industry’s objectives met as the workforce is satisfied. Additionally, compensation is noted be a critical factor in the reduction of managerial turnover and increment in commitment among the workers (Altbach, 2012).
Development of Compensation Policy
According to Altbach, (2012), despite the stress placed on the importance of having a compensation strategy that addresses each section adequately. However, criticism has been raised about the optimum pay policy for the hotel industry. Developing a compensation system that is suitable for external competitiveness where it sorts to maximize the benefits and at the same time reducing costs for the industry is critical as noted by Armstrong and Armstrong (2009).
For a well-organized pay and compensation policy in the hospitality industry, should the developer considers four key important choices namely; internal organization, external competitiveness, the contributions from the employees, and the management proposed for the pay system. Internal organization entails the relationship between the employees in the organization. External competitiveness is interested in the payment relationship with the competitors. Employees’ contribution entangled with how the employees contribute to the organization and how by the end of the day it reflects the compensation system. Lastly, the management of the pay system is focused on the implementation of the strategy (Duenas, 2009).
With the view of strategic importance, it is, therefore, necessary to have some objectives so as it can guide on the choice and also an implementation of the pay and compensation strategy in the hospitality as researched by Fishback and Kantor (2000). What are the philosophies that are used to guide the payment plans in the hospitality industry? Are the various reception fees in line with the organization’s goals? What are some of the noted comparisons that hotels management use so that they can be in a position to develop a well-explained pay and compensation structure? What are some of the advantage noted by the hotels organizations upon implementation of the preferred payment plan?
According to Graham, Roth, and Dugan, (2008), depending on the methodology used for a particular study with the execution of several philosophies employed with strategies and decisions from the executives, a general conclusion is made that when compensation plan is made us to in policy manner. It is noted to help the financial attainment of goals; customer satisfaction met and human resources goals are also achieved inclusive of talent ad also retention. Many of the executives in the hospitality industry have indicated that the higher the level of an organization the higher the percentage of the final compensation realized from the variable pay. These compensations are further noted to be higher comparable to those of outside employees that get as less as 3.5% as indicated by Nordquist, (2013). Additionally, when hotel industries have well functional benefit programs, they also have performance bonus capability for their customers and also incentive programs for the employees.
Factors considered for the compensation policies are paramount as they help in the building of a proper pay structure as noted by Fishback and Kantor (2000), and the build fee structure acts as paramount checks for the appropriate alignment of any company’s internal structure. Furthermore, the factors considered also reflect on the management’s values and relative importance that they place on individual skills in comparison to others. However, in the industries, many of the managements are noted to put experiences and customer relationships skills ahead of any other competencies in the industries because the business zeroed in engaging with their clients’ good art of the day. Critics have raised with how the two mentioned skills are preferred by many employees as it may hinder those who are highly educated a chance to bring fresh ideas into the business and specialized knowledge as they are likely not to be selected as researched by Feinstein and Stefanelli (2012). In the development of a compensation policy, it is noted that many executives regard the plan as a motivational factor among the employees.
A proposed Classification of a Payment System in the Hotel Industry
Different hotels are noted to consider different methodologies in their classification of a compensation system. However, there are standard classifications indicated in the plan they include as pointed out by Sherman (2007). ;
I. Legal necessities- in every country some laws set so as to govern the regular working hours of the staff, minimum wages, child labor, overtime expected pays, and there record keeping procedures. Having checked on the legal requirement for the particular country, it is now up to the company to decide which employees have either the exempt status- those who have specific duties and responsibilities in the industry, more those considered have professional certificates in this industry and tend to have a firm working timetable. And Non-exempt employees- those that are paid on an hourly basis, since they do not have a fixed schedule, they are likely to work overtime in some cases. Therefore, it is up to the human resources to calculate manually and consider the extended pay outside the payroll system.
II. According to Sherman (2007). Working in more than one department in the industry- many employees in the hospitality industry are noted to serve in more than one department, this is noted because some of their roles can easily interchange. Since the required primary skills are excellent customers’ service and experience, it is pointed out that a chef on random times may serve during a party, this performing to duties. Therefore, the HR has a responsibility to ensure that the two or three departments the individual is working their respective heads have approved for them to allow the person to work in more than the specified unit. Thus,they are in a position to make some pay.
III. Job Classification- job classification in the hospitality industry, is noted to involve the availability of employment information- this is provided by the departments heads so as to explain the requirements of each task along with the necessary tasks required thus inclusive of the knowledge and skills. Job evaluation – this is conducted based on the individual hotel, where different roles compared so as to determine which departments are deemed to be superior to the other, and the value issued. Lastly, there are market considerations- the hotels specific HR department does a market analysis, and some data collected, which is used to assess the current and also future, current market prevailing salaries of the market situations. Some of the considerations checked entails the specialization or the availability of unique skills in the market prevailing today as also researched by Brody, (2009).
IV. Pay system- they pay system comprises of three key policies, salary structure, salary range adjustment, and individual compensation proposed plans. A salary structure- entails classification of job titles his is where equal pay levels set. In every ranking, there is the minimum wages that set and also the maximum allowance allocations assigned to these individual classes as supported by Brody, (2009). Salary adjustments- these are in consideration of the current market labor forces that tend to fluctuate thus their response to supply and demand of labor and other economic factors defers. Therefore, when it comes to adjustment of the budgets, the pay ranges are always dictated by the market changes. Individual pay- this is done in the respect of the employees’ education skills and the experience of the person. Additionally, in many hotel structures, labor market conditions and the internal classifications of jobs are identified to have a substantial impact on the own pay.
V. Job transfers- the industry is recognized to offer a lot of flexibility to the employees as they can quickly move from one department to another and this is often reflected when there is competitive recruitment. Since a majority of the person in the industry are required to be at least conversant with the kitchen and customer service, it is noted they can easily exchange during certain occasions. However, the following types of transfers are considered in the industry; promotions- this is done in consideration of the annual pay guidelines, in occasion a development happens, the individual who moves to the new position is entitled to the pay increments and privileges that come with the new classification. Transfers- they are noted when an employee moves to a different department but maintains the same job classification that is initially assigned. Therefore, the industry does not need to allocate a new salary increment as the group position is same. Downgrades- they are noted when an individual is taken to a lower job group, maybe because of his/her request or the employer’s dictation. Therefore, it will mean that the salaries will go down as the pay rate adjusted to the new pay range.
VI. Reclassification of positions- this should be done in light of the recommendation from the HR where there may be a new classification introduced at a higher rank, therefore, altering the job classification not because there is an adjustment in the work volume of change of duties.
VII. Effective dates- in the hotel industry, the effectiveness change is implemented on the first day of the payroll and not when there are some variations in the market adjustment or job changes. Following implementation date for change form, the management is crucial so as to avoid salary adjustments creating undesirable shocks’ in the organization.
Compensation Strategies in Hospitality Industry
According to Richard and Associates. (2008), having a function compensation strategy is vital for the success of hotel industry. With the right compensation strategy, it helps the industry to be effective and competitive in the market and stay ahead of the competitors. As noted by Mondy, Noe, and Gowan, (2005), if the compensation strategy selected does not meet it with the current and also future hotel company’s objectives then it is a disaster waiting to happen. Because it is bound to destroy the company for the next several years and as a result the hotel will be noted too suffer from decreased performance and by the end of the day to fully utilize the employees’ potentials.
Importance of Pay and Compensation Strategy
Having the management draft a well-detailed compensation strategy it is important as it helps the hotel to be in a better position to utilize and manage the personnel in the company as pointed out by Mondy, Noe, and Gowan, (2005). Furthermore, with the personnel well organized it becomes clear on the set goal limits for the managers as well as the employees. Additionally, a well-done compensation strategy helps the management take control of the expected cost and any personnel expected in the organization.
Manager in the hospitality industry should always be in the loop of what is happening in their employees’ life. Thus, they can make implementation of some of the fundamental changes that they feel should adjust for the betterment of the organization. Moreover, for the managers’ role to be done easier, some of the policies advise that they should be allowed to comment on the development of the documents. However, this is not reflected in every day’s organizations as emphasized by Illinois Workers’ Compensation Commission. (2011).
Notably, compensation strategy is not aliment for competitive appeal but also for supporting other HR processes by ensuing that they are efficient and also make sure when they are assessed and also benchmarked the HR departments appear at the top of the company’s portfolio. Additionally, the compensation policy is noted to have a significant influence on the performance forth whole HR. Which observed by many researchers to be a useful evaluation tool as it keeps the HR department in check and instance it is not well managed, then there is a likelihood that the whole organization is bound to be in trouble.
The very best compensation strategy are noted to support all critical HR processes, therefore, ensures that the best talents that is available in the market is brought to the organization through the recruitment programs. Since the hotel industry is more interested in the experience and also the customer relationship with the customers, some of the individuals with such skills easily identified in the field. Additionally, according to Illinois Workers’ Compensation Commission. (2011), the job transfers noted in the compensation strategy, help in diversification of roles which helps the hotel to evaluate and note some of the best talents in the organization retain so that they do not search anywhere.
Compensation strategy is important for effective job recruitment. Since many of the recruitment processes rely on the HR marketing policies, it is vital in that they are in a position to offer what is promised by the specific hotel. The proposed compensation policies need to be in sync with the company’s policies and the compensation strategy internally so as to be in a position to gain top talents from the market, based on the guidelines stipulated in the compensation policy without further added advantages.
Salaries are crucial for a happy workforce, and it motivates a team to work the industry. Notably, motivation is not always about compensation, but the pays that the employees in the hotel Industry get should be able to offer general motivation at the workplace. According to Mathis and Jackson (2003), managers will always have a highly motivated team only when the compensation strategy is in line with the prevailing job market. The employees are often conversant with the expected salaries in the industry, and when to offer lower than acceptable they may opt to move to another hotel where there is better pay.
Compensation policy is noted to be in link with identification and development of talents. Compensation strategy is noted to support talent management as they are expected to have a higher pay that the average employees. Because those with talents perform better without much pressure placed on them and when they realize that the industry does not appreciate them by better pay. Many of the may opt to limit their services until when the managers adhere to their call. Clearly, top management talents cannot sure without having adequate support for the compensation policies as explained by Fishback and Kantor (2000). It is important that the talented feel there is a different approach taken the industry given that the deliver the industries expectations, they also expect the hotels to do the same. Moreover, it is noted by Kova and New Jersey Institute for Continuing Legal Education. (2008) That the hotels personnel developing compensation strategies ought to co-operate with career development specialists so as to introduce the right and expected career opportunities and compensation strategies for some of the best top talents.
Critics raised for the Hotels Compensation Strategies
Many hotel employees earn a straight salary with has as slight incentive compensation program attached. Bonuses or commissions are noted not to make a large percentage of the overall compensation package as indicated by Nason, Koziol, Wall, and Locke, (2003). Many have noted this to be the industry’s downfall because workers perform better when they feel appreciated and rewarded for their work. Therefore, many career developers have noted for the existing hotel Industries it is up to them to shift a change in their incentive strategy so that the staff can be challenged to perform at a higher level.
According to Fishback and Kantor (2000). Many of the hotels compensation strategy policies do not give employees an opportunity to control the level of income in regards to their level of commitment. Some industries who allow these employees to have control of their expected income in regard to their effort I noted to create a highly productive workforce. Ti is because, regardless of the job title that the employee is attached to, every employee in the hotel industry feels that their pay should and always justify the amount of work that they put in everyday job.
As per,(Ohrc.on.ca, 2016) notable change in work demographics are on the rise in as per data collected by the government .In one way or another labour demand in Canada was seen to exceed labour supply by the year 2014.With women making up a 48% of the workforce, the number of women above a significant range of above 65 years is expected to grow. As per the current statistics, a rising figure of up to 12.9% of the workforce is dominated by women above the age of 65 years. The figures are bound to increase by year 2030 raising the figure to almost 20.6% above the age of 65 years.
Human rights dealing with work environment tend to protect all employees hence creating a conducive work environment. In relation to this, more people join the work force despite their age or background. In order to ensure that all workers in different organizations are treated equally, employers are encouraged to come up with special programmes in their job adverts. Jobs should have a regular range of age set in order to ensure all employees are treated equally. Younger employees tend to have a higher work output than older employees since they differ in their rates of work.
Programs intended to be developed should have main reasons behind them so that they may not seem as a method of fuelling discrimination. A number of such programs should be of use to employees in that they will help them relieve job stress and various hardships. Apart from better pay and salaries, employees are attracted to jobs that they have their own freedom. Clinging onto (“Blood, Sweat, and Fear”, 2005) many workers are in a position to form trade unions as they are governed by labour laws. Immigrant workers are also protected in that they are insured of any harm or accidents in the hotel industry like fire breakage.
Human Resource (HR) Compensation Strategy Essay
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