Professional Documents
Culture Documents
Compensation Strategy Report: Structural and Contextual Elements
Compensation Strategy Report: Structural and Contextual Elements
INTRODUCTION
Increase in competition for talent among industries have led to drastic changes in the business
environment. These changes have made it necessary for organization in recognizing the key
role that compensation play in attracting, retaining and motivating employees in giving their
optimal performance to achieve organizational goal.
It is paramount that organizations develop an effective compensation strategy that will help in
determining the best compensation mix to implement based on the organizational pay
philosophy which should be aligned to the business strategy to meet the need of their employees
and achieve firm objectives.
Zenith is a joint venture business of a major computer firm and a leading supplier of hospital
products. The healthcare organization have become more complex whereby there is an increase
in demand for computer system to help in effective transmission of information in the health
system. Zenith product is an information management system for health care institutions, they
handle everything from system design, installation, training, and to maintenance for their
clients.
After proper analysis of Zenith’s organizational problem, the structural elements, contextual
elements, and managerial style that fosters the issues faced by the organization, the following
were identified:
MANAGERIAL STYLE
Zenith incorporated is using the Classical managerial style, which assumes that the employee
dislike work but can be induced to work in other to satisfy their economic needs. In Zenith,
employees are only provided intrinsic rewards for their performance, policies and rules are
enforced by top management, example is the commissions paid to employees based on their
sales performance.
All these are the issues faced by Zenith Incorporated, which is affecting the firm’s reward
system in them getting the required behaviour needed to achieve organizational goals.
RECOMMENDATIONS
The recommended managerial style for Zenith Incorporated, should be the High Involvement
managerial style, which assumes that if an organization is properly structured, work can be
intrinsically motivating. This proposed managerial style is important because it will motivate
the employees and provide them the opportunity to satisfy their higher needs, such as
autonomy, personal growth, whereby bringing about desirable organizational behaviour.
The recommended compensation strategy will be the use of intrinsic and extrinsic rewards,
such as awards, special park lots and so on, which will help to motivate our employees towards
better performance.
SWOT ANALYSIS
STRENGHTS
WEAKNESSES
OPPORTUNITIES
THREATS
BEHAVIOUR TYPE
Organizational Citizenship Behaviour: It occurs when employees perform duties that goes
beyond what is expected of them and benefits the organization.
The implementation of the new compensation strategy will have the following positive impact
on the organization business objectives and staffing:
This is a strategy whereby employees are paid based on their capabilities. This strategy is
grouped into two types, but for Zenith Incorporated, we will be using the Skill-based pay.
Skill-based pay is a type of pay whereby employees are paid based on their skills and
capabilities rather than their job responsibilities. We recommend that Zenith Incorporated use
this compensation strategy because of the decrease in employee morale, this will be applied
to the following employees: Systems Development, Systems Installation and Systems
Maintenance. Zenith should compensate these employees based on the new skills and
knowledge acquired, which will encourage the employees to enhance their skills and thereby
increase in productivity of the organization. The pay can be formulated where an individual
at the entry level have the basic knowledge needed for the job (Level 1), level 2 will be
dependent on the employee performing higher tasks than that of the entry level, which after,
the employee will proceed to the final level, where the employee is fully trained and have the
full skills and competency needed to perform all the job functions. A sample can be:
Based on the pay scale for the job using pay scale Canada at the first level the basic salary
will apply which after once acquiring the required skill will lead to 20% increase in the salary
of the employee.