COMPENSATION

INTRODUCTION

In today's ever-changing work environment, employee pay is one of the most important
factors affecting total worker happiness, talent retention, and organizational
performance. This study aims to explore the various facets of pay, looking at trends,
issues that businesses confront, and the changing tactics used to develop fair and
competitive reward structures. In order to promote a deeper understanding of how
organizations can optimize their compensation structures to attract, motivate, and retain
top talent in a constantly changing business environment, this study aims to contribute
valuable insights to both academia and practitioners by dissecting the intricacies
surrounding compensation practices.

TOPIC ASSIGNMENT

Compensation Meaning Compensation

means the basic returns that an employee obtains from his/her work. Every organization
offers good compensation to attract and retain the ablest employees on the actual work
floor. Compensation refers to a wide range of financial non non-financial rewards to
employees for their services rendered to the organization. It is paid in the form of
wages, salaries and employee benefits such as paid vacations, insurance, maternity
leave, free travel facility, retirement benefits etc.

Compensation should be designed that it achieves the following objectives:

1. Capable employees are attracted towards the organization.

2. The employees are motivated for better performance.

3. The employees do not leave the employer frequently.

Elements of Compensation:

1. Monthly wage & salary including basic wage, house rent allowance, dearness
allowance and city compensatory allowance.

2. Bonus at the end of the year.

3. Economic benefits such as paid holidays, leave travel concession.

4. Contribution towards insurance premium.

5. Contribution towards retirement benefits such as employee provident fund.

6. Transport and medical facilities.

Current Trends and Practices In Compensation Management

Compensation in present days to be studied is a need for achieving competent

employees to bring effectiveness in day to day operation of the organization. It must be
complete and at the satisfactory level of employees. Many studies have been taking
place in recent few past years regarding compensation.

RESEARCH PHASE

Traditional Indigenous approaches to work, recognition, and rewards in compensation

differ from mainstream Western practices. Indigenous cultures often prioritize collective
well-being, community contributions, and non-material rewards.

1. Collective Focus: Indigenous cultures emphasize the collective over individualism.

Work is seen as a means to benefit the community as a whole, rather than solely for
personal gain. This collective focus is reflected in compensation practices, where the
well-being of the community is prioritized.

2. Non-Monetary Rewards: Indigenous cultures value non-material rewards such as

respect, honor, and status within the community. Recognition for contributions to the
community and adherence to cultural values often hold greater importance than
monetary compensation.

3. Balance and Sustainability: Traditional Indigenous approaches to work emphasize

balance and sustainability. This includes respecting the natural environment, preserving
cultural traditions, and ensuring the well-being of future generations. Compensation
practices may align with these values by promoting sustainable livelihoods and
supporting community development initiatives.

4. Intergenerational Knowledge Transfer: Indigenous cultures place a strong emphasis

on intergenerational knowledge transfer. Recognition and rewards may be given to
individuals who possess wisdom and knowledge passed down through generations,
contributing to the preservation of cultural heritage.
5. Community Decision-Making: Indigenous communities often engage in collective
decision-making processes. Compensation practices may involve community
consultations and consensus-building to ensure fairness and equity in distributing
resources and rewards.

Incorporating Indigenous perspectives into HR compensation practices is a key part of

creating a more inclusive and supportive work environment for Indigenous workers.

1. Offering flexible work arrangements to accommodate cultural and ceremonial

practices: This can include flexible working hours or leaves of absence to allow
Indigenous workers to participate in cultural events and practices. This shows respect
for Indigenous cultures and can contribute to a more inclusive workplace environment.

2. Providing training on Indigenous culture and history to all employees: This can help to
create a more inclusive and welcoming workplace, and improve communication and
understanding between Indigenous and non-Indigenous employees. It can also help
non-Indigenous employees to better understand the unique needs and perspectives of
their Indigenous colleagues, which can inform more equitable compensation practices.

3. Creating opportunities for career development and advancement for Indigenous

workers: This can include mentorship programs, leadership training, and support for
education and training. Providing these opportunities can help to attract and retain
Indigenous talent, and can contribute to more equitable compensation practices by
ensuring that Indigenous workers have the same opportunities for advancement as their
non-Indigenous colleagues.

4. Providing support for mental health and wellness of Indigenous workers: This can
include offering employee assistance programs, providing access to traditional healing
practices, and creating a supportive and understanding workplace culture. Recognizing
and supporting the mental health and wellness of Indigenous workers can contribute to
a more inclusive workplace and can be an important part of a comprehensive
compensation package.

5. Building relationships with Indigenous communities: HR should develop and maintain

positive relationships with Indigenous communities, including their HR departments and
Indigenous Skills and Employment Training (ISET) programs. This can also include
partnering with local Indigenous organizations, attending career days or other events,
and engaging in outreach activities to build trust and credibility. These relationships can
inform more culturally sensitive and equitable compensation practices.
Aligning HR practices with indigenous values in compensation can present both
challenges and opportunities.

Challenges:

1. Different Perspectives on Compensation: Indigenous cultures may have different

perspectives on compensation compared to mainstream Western cultures. Traditional
indigenous approaches often prioritize community well-being and non-material rewards
over individual financial gain. Aligning compensation practices with these values may
require a shift in mindset and a reevaluation of traditional compensation structures.

2. Recognition of Non-Monetary Contributions: Indigenous cultures often value non-

monetary contributions, such as knowledge sharing, community engagement, and
cultural preservation. Recognizing and rewarding these contributions in a compensation
framework can be challenging, as traditional compensation models primarily focus on
monetary rewards.

Opportunities:

1. Holistic Compensation: Aligning HR practices with indigenous values provides an

opportunity to adopt a more holistic approach to compensation. This can include
considering non-monetary benefits, such as flexible work arrangements, professional
development opportunities, and support for cultural practices.

2. Cultural Considerations in Compensation: Indigenous values emphasize community

well-being and sustainability. Incorporating these values into compensation practices
can involve supporting community initiatives, contributing to cultural preservation efforts,
or providing opportunities for indigenous employees to engage with their communities.

3. Empowerment and Growth: Indigenous cultures often value personal and

professional growth. HR practices can align with these values by providing opportunities
for skill development, mentorship programs, and career advancement paths that are
sensitive to indigenous cultural practices and traditions.

4. Fair and Equitable Compensation: Aligning HR practices with indigenous values in

compensation can ensure fairness and equity for indigenous employees. This includes
conducting regular pay equity reviews, addressing any disparities, and providing equal
opportunities for advancement and promotion.

It's important to approach these challenges and opportunities with cultural sensitivity,
consultation with indigenous communities, and a commitment to understanding and
respecting their values and perspectives.
ANALYSIS AND INTEGRATION

Absolutely, there are several examples of indigenous-friendly HR practices that have

been implemented by various organizations worldwide. These practices aim to respect,
protect, and promote the rights and cultures of indigenous people. Here are a few
examples:

1. Cultural Competency Training: Many organizations, such as Australia's Department

of Health, have implemented cultural competency training for their employees. This
training helps staff understand, communicate with, and effectively interact with people
across cultures, particularly indigenous cultures.

2. Indigenous Employment Programs: Companies like BHP, a global resources

company, have established indigenous employment programs. These programs aim to
provide employment opportunities for indigenous people, offering them training,
mentorship, and career development opportunities.

3. Inclusive Recruitment Strategies: Some organizations have developed recruitment

strategies specifically designed to attract indigenous applicants. For instance, the
Canadian Government has an Aboriginal Leadership Opportunity Year program that
seeks to recruit and train indigenous youth for leadership roles.

4. Acknowledgement and Celebration of Indigenous Cultures: Many organizations

acknowledge and celebrate indigenous cultures and events. For example, ANZ Bank in
Australia celebrates NAIDOC Week, an event that celebrates the history, culture, and
achievements of Aboriginal and Torres Strait Islander peoples.

5. Land Acknowledgement: Some organizations, particularly in Canada, begin their

meetings or events with a land acknowledgement. This is a formal statement that
recognizes the unique and enduring relationship that exists between indigenous
peoples and their traditional territories.

6. Indigenous Advisory Committees: Some companies establish Indigenous Advisory

Committees to ensure that the voices of indigenous people are heard at the decision-
making level. These committees can guide the company's strategies and policies to
ensure they are inclusive and respectful of indigenous cultures.

These practices not only promote diversity and inclusion but also contribute to the
overall success of the organization by fostering a more inclusive and respectful
workplace environment.
DOCUMENTATION

COMPENSATION
Research Objective:

Compensation should be designed that it achieves the following objectives:

1. Capable employees are attracted towards the organization.

2. The employees are motivated for better performance.

3. The employees do not leave the employer frequently.