Compensation and Benefits

Week 3 Reflection Info

I found this week’s topics of particular interest due to a common statement I hear in the workplace about someone not being compensated appropriately for the work they do. Being a believer in an efficient free market, I feel this is impossible. If someone truly feels that they are not paid a fair wage, they can very easily go out and get the wage they desire. However, if that $200,000 per year job is not waiting for them and their current skill set, perhaps their current compensation is more appropriate than they think.

Pay for seniority and loyalty to a single company are two aspects of the workplace that are on the wane in America. As these changes occur, a successful organization must shift focus to seeking out the best performers and compensating them appropriately in order to keep them. I definitely understand why a corporation would want to tie its compensation to strategic objectives e.g. bonuses tied to higher levels of customer satisfaction.

As stated earlier, I believe that the market is the best way to determine levels of compensation and benefits. As a person who has had to make payroll in the past, it would be foolish to pay someone $40,000 per year if you can get the same level of performance at $36,000. Other considerations must be made though as these very decisions are roughly what leads to modern trends like off-shoring. The phrase, penny wise and pound foolish can apply here. If savings a few or even many thousands of dollars is offset by lower quality work, reduced customer satisfaction or increased logistics costs, perhaps more thought should be given to the true costs of employee compensation.