Compensation is everything that employees receive as a reward for their work. Compensation is also one of the most effective ways for personnel departments to improve job performance, motivation and employee job satisfaction. A good compensation system will be able to provide satisfaction for employees and enable companies to acquire, hire, and retain employees. If any of you have a problem with the company about compensation, you can ask for help to the Iowa Workman’s Compensation.
Most societies, especially employees, consider compensation to be very important because the amount of compensation for them reflects the size of the value of their work among the employees themselves, families and communities. The absolute level of employee compensation determines the scale of life, while relative compensation indicates their status, dignity, and self-esteem. So when employees see their compensation inadequate, work performance, motivation and job satisfaction can go down dramatically.
Compensation programs are also important to the company, as they reflect the organization’s efforts to maintain its human resources. In addition, compensation is often the largest and most important cost component. If remuneration and remuneration are not properly administered, the company may lose its good employees and should incur costs to attract, select, train and develop its successor. Even if employees do not get out, they may become dissatisfied with the company and lower their productivity.
Purpose and Function of Compensation
In general, compensation has several objectives, including:
Getting Qualified Personnel
In employee withdrawal, usually, a candidate with skillful ability in work will be more interested in higher compensation then this is where the role of the entrepreneur for Compensation needs to be set high enough to attract the applicants. For those who are already employed, high compensation will encourage employees to work better.
Maintaining Existing Employees Now
If we want a good Richman we do not go out or move to another company than the level of compensation must be kept in order to remain competitive
Wage and payroll administration strives to fulfill the principle of justice. Justice or internal and external consistency is very important in the determination of the level of compensation.
Appreciate the Desired Behavior
Compensation should encourage desirable behaviors for enterprise progress. Good job performance, experience, loyalty, new responsibilities and other behaviors can be rewarded through an effective compensation plan.
Controlling the Costs
A rational compensation program helps the organization to obtain and retain its human resources at a decent level of work, Without a systematic pay structure and payroll the organization can pay to underpay or overpay to its employees.
Complying with Legal Rules
The compensation administration is expected to meet the legal restrictions of the State such as the law on employment.
In line with this, Martoyo argues that the purpose of compensation is:
- Fulfill the economic needs of employees or as security economic security for employees.
- Encourage employees to be better and more active.
- Show that the company is progressing.
- Show appreciation and fair treatment of the organization to its employees (a balance between inputs given to the employee and the output or amount of rewards given to employee company).
From the above objectives, it can be concluded that between the general goals and objectives according to Martoyo, has some similarities such as creating better employees and showing fair treatment.