Question

1. "If a compensation system works well for one business, that same compensation system should also work well for other businesses." Discuss whether this statement is true. 2. Using the concept of fit, discuss the types of compensation and rewards that would work best for each of the three managerial styles. 3. Discuss recent trends in compensation practices taking place in North America and explain what may be causing those trends.

Answer 1

ANSWER-1) It is a false statement. Compensation attributes to all forms of rewards and pay paid by employer for the performance of employees for their performance, including all forms of perks, benefits, services and cash rewards. An effective compensation system provides a means of sustenance and permit individuals to satisfy their recreational and materialistic requirements; it also serves their self-esteem or ego needs. Each organization has a unique compensation system thus if compensation system works well for one company, it is not necessary that it will be effective for other businesses also as the systems of compensation are not “one size fits all”. A business firm must identify a compensation system that influence the business own vision, mission and values, job positions within their company, and target specific behaviours of employee that are desired by the business

As per policy we have to answer first question

Answer 2

  1. “If a compensation system works well for one business, that same compensation system should also work well for other businesses.” Explain whether this statement is true.

 

Answer: The mention statement I false because compensation is paid by employer to appreciate them for their work and it can be in the form of benefits, services or maybe cash rewards. Compensation fulfil the external and internal needs and on the other hand it can be the one way to encourage to do their task with integrity and perfectly. Each organization have their own compensation system according to their business so that one compensation system will not be effective for others.

The compensation systems are also not like one size fir for all. Firm has to identify suitable compensation system according to their visions, missions and organisational values. Visions include long term goals and desire of the firm, mission defines the present goal of business and organisational values indulge principles, beliefs and attitude that show the path to behaviour which can help to acquire the goal of business. Fit is crucial theory for strategic management. The business can choose vertical fit which means alignment of strategies at the different level as like Apple Company and either option is horizontal fit which says that alignment of strategies at the same level and it includes HRM strategies for example, performance management and compensation have alignment at same level in firm.

Lastly, from above we should opt wisely or else it can lead to huge problem for any firm or organisation.