Aligning Compensation Strategy with HR Strategy & Business Strategy

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Aligning Compensation Strategy with HR Strategy & Business Strategy

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Aligning Compensation Strategy with HR Strategy & Business Strategy:

Aligning Compensation Strategy with HR Strategy & Business Strategy Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management Hyderabad

Compensation Strategy:

Compensation Strategy Strategy refers to the fundamental directions that an organization chooses Compensation Strategy focuses on the compensation choices those help the organization gain and sustain competitive advantage

Human Resource Strategy:

Human Resource Strategy Human resource strategy is designed to develop the skills, attitudes and behaviors among staff that will help the organization meet its goals. Human resource strategy consists of principles for managing the workforce through HR policies and practices. It covers the various areas of human resources functions, such as, recruitment, compensation, performance management, reward and recognition, employee relations and training.

Business Strategy:

Business Strategy Business Strategy defines the direction in which organization is going in relation to its environment in order to achieve its objectives.

Aligning Compensation Strategy with Business Strategy:

Aligning Compensation Strategy with Business Strategy Compensation systems should align with the organization's business strategy When business strategies change, Compensation systems should also change

Strategic Compensation Choices:

Strategic Compensation Choices Five strategic compensation choices are: Objectives Internal alignment External competitiveness Employee contributions Management

Compensation Strategies in 3 Firms:

Compensation Strategies in 3 Firms

Aligning Compensation Strategy with HR Strategy and Business Strategy:

Aligning Compensation Strategy with HR Strategy and Business Strategy

Aligning Compensation Strategy with HR Strategy:

Aligning Compensation Strategy with HR Strategy 9 HR Strategy Compensation Strategy – Attract staff – Retain effective performers – Support change management process – Establish positive corporate reputation – Administer reward management to maximise positive impact – Enhance purchasing power of employees – Make Compensation package simple – Develop human resources   – Total reward approaches that help to make the organisation a great place to work – Competitive pay structure that helps to retain high quality employee – Variable pay schemes that contributes to the motivation of the people – Performance management process that promotes continuous improvement – Performance management processes that identify learning needs and how they can be satisfied – Career family structure that defines knowledge and skills requirement – Total reward approaches that emphasize the importance of enhancing the work environment

Aligning Compensation Strategy with Business Strategy:

Aligning Compensation Strategy with Business Strategy 10 Business Strategy Compensation Strategy – Achieving competitive advantage through innovation – Achieving competitive advantage through quality – Achieving competitive advantage through low costs – Provide financial incentive/reward and recognition for innovation – Link reward to quality performance – Review all reward practices to ensure they provide value for money

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