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Compensation alternative methods

I am working on a large research paper for a Human Resources Wages and Compensation class and am looking for help on an 8-10 page portion addressing Alternative Compensation Methods (systems, trends, non-monetary compensation, and benefits package design.) Also touching on how employers are going beyond simple salary-based compensation and how these alternate compensation methods have impacted the hiring process. Want to explore in-depth what the advantages and disadvantages there are with these methods over traditional salary-based hiring practices.

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This is a beginning guide for your work. I wanted to submit is at this point to make sure we are considering the same thing. I will update this with more information if I am heading in the right direction. You can let me know if there are other areas or a specific area of focus you want to work on.


Compensation issues have become more important as companies strive to find and hire the best human talent to move their companies forward toward success. Compensation based strictly on salary and wages often does not motivate people in business the same way that incentives and rewards do. So companies are looking at ways to improve their compensation packages with non-wage compensation alternatives.

Many companies are finding the link between reward and job satisfaction is key to holding on to good employees. Offering people stock options and compensation terms that make them shareholders in the company as incentive compensation helps to attract and retain valuable intellectual capital (Shah, 2003). Whether it is stock options or stock expensing, offering workers a share of the company can help to increase the value of the worker to the company and the company for the worker. The worker is working to improve the position of the company and therefore their own position. And while stock options are one way to help share the company's success, there are other methods as well.

Gainsharing, where employees get a financial benefit from operational improvements in the company and profit sharing, the plan where a portion of the profits are distributed to company employees per a formula decided by management, are two other methods to share the success of the company and the success of the employees (Participatory, 1998).
Each of these can target specific groups, or situations to allow for profits and gains to be shared by those most closely related to achieving the success. The company can validate the employee efforts because they are sharing the profits with the employees. Employees can see the value of their efforts through the success of the company, and their participation with other shareholders/stakeholders.

Companies, schools, and other entities are using merit based pay to make alternative compensation for employees. Merit based pay works with the ...

Solution Summary

A look at the current and past information on alternative methods of compensation available to organizations for employees.

References included