Compensation and benefits are some of the factors that organizations must regularly update to maintain the best talent. A company's human resource policy should be flexible and incorporate the current trends in the labor market. Failure to match the human resource plan with those of the competitors reduces the level of productivity and increases the turnover rate. The purpose of the paper is to discuss changes that SEIIC must incorporate in its employment policy since the current one is rigid. The report will discuss the recent trends and approaches that the management of SEIIC must consider as it redesigns its compensation and packages. The discussion will also assess the extrinsic and intrinsic motivation factors that should be included in the amended policy. Finally, the research will recommend an action plan that would lead to the development and retention of valuable performers at SEIIC.
Employees require a better remuneration package to enable them to attain their financial goals. A compensation package in an organization such as SEIIC would include salaries, bonuses and stock options. One of the trends in compensation that SEIIC should consider in its human resource policy is equity. According to Bao & Wu (2017), an organization must ensure that the workers are compensated fairly irrespective of the rank or position held. In most entities, the annual employees' increment depends on a fixed percentage that cuts across the whole entity. Therefore, SEIIC must ensure that the annual pay rise is based on the output and performance of the employees. One of the advantages of equality is that it enhances the level of employees' motivation leading to increased productivity. The disadvantage of an equity plan is that it is difficult for an organization to determine an appropriate mechanism for attaining fairness (Bao & Wu, 2017).
The second trend in compensation that the management of SEIIC must incorporate is transparency. According to Rakyan (2017), most employers only disclose information about the basic salary without clearly outlining other packages. It is imperative for the human resource manager of SEIIC to communicate honestly and openly about the pay and other remuneration of a particular position. One of the advantages of a transparent system is that it enhances the trust between the employees and their leaders. Additionally, clear communication increases the retention rate of the firm (Rakyan, 2017). However, a disadvantage of the transparent communication is that some senior managers feel insecure since their subordinates are aware of the amount they earn.
The third trend that the human resource of SEIIC should incorporate is flexibility in the contract terms of employees. An organization must ensure that the workers are capable of switching from full-time employment to a contract-based engagement while being offered similar compensation. Most entities have a rigid compensation plan that compels employees to quit if they require time to attend to personal issues (Rakyan, 2017). One of the benefits of flexibility is that it enables the employee to advance their education. Besides, a flexible compensation option increases the staff's motivation since they are assured of pay despite having other commitments that they must attend. The disadvantage of the plan is that the company might incur additional cost in hiring employees to cover the lost working hours.
According to Tomeikova (2016), benefits refer to the non-financial and financial payments that the employees receive from their employers, and which are linked to the increased productivity. One of the recent trends in benefits that SEIIC should consider is a wellness program. The policy entails lifestyle and health coaching, free health assessment, and smoking awareness sessions. The health of the employees is directly related with the output of a firm and, hence, it is the role of the management to ensure that the program is incorporated in the human resource policy (Tomeikova, 2016). One advantage of a wellness plan is that it increases the employees' focus while at work.
Additionally, the program contributes to the wellness of the society which is essential for economic growth. However, one setback that results from the fitness plan is the cost of running it. The other disadvantage is that due to the busy schedule at work, some of the employees are not capable of attending the health talks and, therefore, they do not get the essential information required to improve their health (Tomeikova, 2016).
The second trend in benefits that SEIIC must incorporate in its human resources policy is a health plan that covers the family of the employees. According to Tomeikova (2016), the amount deducted from the employee's salary has increased since the year 2015 to cater for the spouse and children of the employee. One of the benefits of an extensive health cover is that it enables the workers to concentrate at work since they do not have to worry about medical expenses, and mainly if the partner is not employed. The other advantage is that it contributes to the wellness of the society. However, SEIIC will have to pay vast amounts to ensure that the health plan covers the employees' families. The disadvantage is that if the firm fails to generate adequate profits, then it would not be capable of sustaining the health insurance cover (Bailey & Webber, 2015).
The third trend in the benefits that should be adopted by SEIIC is the financial fitness. Tomeikova (2016) observed that most institutions are financing seminars and programs to enable the employees to invest and manage their money. The benefits of a financial fitness plan include stress reduction and increased productivity at work. However, the company incurs the cost of maintaining the program. Additionally, some employees may not apply the information they acquire from the finance management seminars leading to the wastage of the company's resources.
Intrinsic motivators are the factors that lead people to do something that they enjoy or have an interest in (Legault, 2017). One of the intrinsic motivators that should be considered by SEIIC is the perceived competence. The level of employees' motivation falls whenever their perceived competence is undermined. The other intrinsic motivator that SEIIC should consider is the verbal praise since it bolsters the workers' ability to work hard. However, intrinsic motivation can only flourish if the organization nurtures the social environment (Legault, 2017). One of the advantages of inherent motivators is that it leads to increased productivity in an entity. The other benefit is that it enhances innovation since employees perform a task that they are interested in (Deci & Ryan, 2008). The disadvantage is that the motivator is dependent on the social environment and, therefore, if the management fails to nurture it, then an organization would not succeed.
On the contrary, the extrinsic motivators refer to the elements that compel people to act in a particular manner since they are afraid of the outcome (Legault, 2017). One of the extrinsic motivators that SEIIC must include in its design is the reward. Most people will work extra hard if the pay is commensurate with the tasks accomplished. Another element that the organization should incorporate is the punishment. The leaders of SEIIC must ensure that the penalty is not harsh to avoid a high turnover rate. Deadline is the other motivator that SEIIC should consider and the leaders should ensure that it is attainable and not oppressive (Legault, 2017). One of the benefits of extrinsic motivators is that they are directly related to the output level. The disadvantage is that it does not promote innovation since the employees perform a task to avoid punishment. Also, extrinsic factors might lead to a reduction in performance if the rewards are not fair or of the punishments are tough (Legault, 2017).
For the company to retain valuable performers, it needs to implement a transparent and flexible compensation package. Whenever new employees join the company, it is the role of SEIIC's human resource development to inform them about all their expected pay. Once the compensation package has been identified, the next step would be to incorporate recent trends in the company's benefits. The benefits of SEIIC should include a wellness program, financial fitness, and a comprehensive health care plan that covers the employees' spouse and children. The third element that SEIIC must consider in its human resource policy is the motivation of employees. The leaders must ensure that the social environment is nurtured to enhance intrinsic motivators. Behaviors such as employees' discrimination and criticism must be avoided. For the external motivators to flourish, SEIIC must ensure that the rewards are fair and dependent on an employee's contribution. Additionally, the company must eradicate stringent punishments since they lead to a high turnover rate. Once the three components, benefits, packages, and motivation factors, are implemented, SEIIC will be capable of developing and retaining valuable talents.
Bailey, J., & Webber, D.A. (2015). Health insurance benefit mandates and the firm-size distribution. IZA Discussion Papers, No. 9292.
Bao, J., & Wu, A. (2017). Equality and equity in compensation. Harvard Business School. Working Paper 17-093.
Deci, E. L., & Ryan, R. M. (2008). Self-determination theory: A macro theory on human motivation, development, and health. Canadian Psychology, 49, 182-185.
Legault, L. (2017). Intrinsic and extrinsic motivation. Retrieved on August 12, 2018 from DOI: 10.1007/978-3-319-28099-8_1139-1.
Raykan, S. (2017). Top five trends in compensation and benefits for 2017. Retrieved on August 11, from
Tomeikova, L. (2016). Employee benefits and trends in the workplace: Economy & Society & Environment. ISSN: 1339-4509.
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