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    Compensation and pay structures that support effective employees

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     Analyze compensation concepts that influence market factors. Evaluate how HRM communicates these concepts of pay structures to employees. Examples of businesses that have been successful in recruiting, motivating, and retaining employees? How do these examples of successful strategies support a healthy balance of internal and external factors?
    Please include 3 scholarly resources where I can research necessary information to assist
    Length: 5 pages

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    Solution Preview

    Compensation structures of an organization influence market factors, such as revenues, market

    share attained, and overall success. Often, the strategy to recruit, motivate, and retain employees is

    based on what competitors in the industry are offering. However, the most successful companies look

    inward, toward their own objectives and targets, to develop sound strategies for recruiting and retaining

    employees who will help the company succeed. If employees are expected to contribute, they must

    believe they play an integral part in shaping the outcomes for the organization. If the organization

    looks beyond the current pay rate which is standard for a certain type of worker, and bases pay and

    benefits on the value the employee should bring, the employee is more likely to live up to the

    organization's expectations.

    Costco, a membership retailer, competes mainly with Sam's Club and BJ's Wholesale Club.

    However, Costco has become the leader in this retail industry, by considering how to get the most

    from employees and how to show employees they are valued. Costco's sales revenues continue to

    grow annually, at 5%, compared to WalMart's 1.4% (Ungar, 2013). Sam's Club prices are generally

    lower in several categories. However, Costco experiences greater customer loyalty, which contributes

    to growth over time. Many repeat customers assert Costco's customer service is at least adequate.

    Sam's Club customers service is lacking or is unresponsive, according to Ungar (2013). Cuts in the

    number of employees and cuts in hours make it difficult for customers to find the help they need, when

    they need it. Sam's Club employees make an average of $4 to $5 an hour more than Sam's Club

    employees. They contribute only 8% of the cost of their health benefits, while Sam's Club employees

    pay over 30%. It is believed that these factors contribute to high turnover at Sam's Club and lower

    than average turnover at Costco.

    High turnover affects revenues, as organizations focused on always replacing employees pay

    higher costs in recruitment efforts and in replacing employees. High turnover affects morale of

    remaining employees, which can negatively affect productivity and motivation. Low motivation, in

    turn, can lead to poor customer service. Willingness to help customers helps maintain customer
    loyalty (Deeb, 2014). Costco employees are likely more wiling to help customers and have a higher

    level of motivation, as their physical needs are more closely met with the benefits and compensation

    package.

    Pay structures, within most organizations, is based on experience, level of responsibility, and

    performance. It should not be based on any single factor, because a pay structure based on a single

    factor, such as experience or level of responsibility, does not help promote the best performance.

    An employee that is motivated to perform, takes an active role in his or her duties. The interest level

    in making a contribution to the organization's strategy is high. Pay should be linked to performance,

    to send the message that performance is important to the organization. ...

    Solution Summary

    The pages discuss the considerations in compensation organizations should be concerned with, to retain talented, motivated workers, who are engaged and support the organization.

    $2.19

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