Respond to a classmate:
Strategic decision is very important action taken by any organisation in which company is taking calculated risk for investment in certain business opportunities that will may or may not be successful. In doing so, company requires employees that have that skill set that contributes to achieve strategic objectives. Company may also not have employee and needs to hire new employees or motivate existing employee to develop required skill set for strategic objective achievements.
For all the steps taken of whether to utilise existing employees or hire new employees, compensation package is motivating factor to achieve strategic objectives. Many times organisation though hiring new employees but don’t know how to achieve strategic objectives giving challenging times to new hired for strategic objectives. The employees working on strategic objective have to put longer hours, think innovatively, go extra mile in learning and unlearning subject required to achieve strategic objectives. All this hard work requires good compensation package other wise it will demotivate employees as already they are moving in burn out path helping organisation to move in its strategic objective but are under paid by organisation signaling they are not taking their proper care.
Advantage of strategic objective with compensation practices:-
- Employees are motivated by good compensation practices to go extra mile, be innovative and not only help but actually Achieve strategic objective
- It gives employee message by good compensation practices that they are taken care by organisation
Dis-Advantage of strategic objective with compensation practices:-
- Few employee may showcase negative attitude that is not favourable to achieve strategic objective
- Employee cost to company can be higher which may err other stakeholder
The Organization’s approach is deemed to be good when it comes to compensation management as a part of business strategy. Right compensation strategy is a good tool for building an effective and competitive organization, similarly wrong compensation strategy can decrease the performance of employees too.
The Organization’s need to take full utilization of employees to achieve their goals. Compensation strategies also tells about the organization’s success in the pay market of the industry. Manager’s must know about the compensation structure so that they can work with their employees effectively. The compensation management should be changed timely as required according to competition to get better results from the employees. This also helps managers to plan the career of employees too.
