Effect Of The Rapidly Changing Business Environments Commerce Essay

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In today's rapidly changing business environment, organizations have to respond quickly to requirements for people as they operate in very competitive and cutthroat conditions where in paramount performance is being demanded by them. They have to acquire those individuals who are best of the best and can take organization to a new pedestal. Compensation is an important criterion to drive recruitment of competent human resources which acts as a motivator when you reward achievement of the desired organizational results.

Compensation has been an important issue for both, the employer and the employee. This is because money is a crucial incentive and directly or indirectly related to the fulfillment of all the human needs. While employers' perspective has been primarily productivity, the employees' emphasis may be on higher compensation to offset their cost of living and perhaps the price his skill will fetch in the competitive job market.

The goals of compensation administration are to design a cost effective pay structure that will attract and retain competent employees and to provide an incentive for these individuals to exert high energy levels at work. Compensation administration also attempts to ensure that pay levels, once determined, will be perceived as fair by all employees. Fairness means that the established pay levels are adequate and consistent for the demands and requirements of the job. Therefore, the primary determination of pay is the kind of job an employer performs. Different jobs require different kinds and levels of skills, knowledge, and abilities and these factors vary in their value to the organization. So, too do the responsibility and authority of various positions. In short, the higher the skills, knowledge and abilities and the greater the authority and responsibility the higher the pay.

By providing the right combination of benefits which are non-cash compensation organization can motivate employees to join an organization and make them stay to help in its progress. There are two types of rewards, monetary and non-monetary. Monetary rewards include salary, bonus, commissions, medical and health benefits, holidays, and retirement benefits. Among the non-monetary rewards are meaningful and challenging works, recognition and career advancement, safe and healthy working environment, and fair treatment.

Executive compensation practices are evolving under the new guidelines, the first principles of executive compensation continue to be the same: to attract, motivate and retain the best talent. By providing the right combination of benefits which are non-cash compensation your organization can motivate employees and make them stay to help in its progress.

Sourcing executive-level and senior management as well as the acquisition of scarce or 'high-potential' recruits has been a long-established market serviced by a wide range of 'search and selection' or 'headhunting' consultancies, which typically form long-standing relationships with their client organizations. Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies. In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or 'embed', their resourcing team(s) in the client organization's offices, but work in tandem with the senior human resource management team in developing the longer-term HR resourcing strategy and plan. Some organizations provide Stock Options with Performance Criteria for Vesting to employees as a motivator to join organization. Incentive plans with returns that vary with the quality of performance are also considered effective.

Due to changes in today's scenario, many novel recruitment practices are being used which are Headhunters-like naukri.com, timesjob.com which act as a linker between the employee and the employers and provide the HR solutions to the company. They bridge the geographical barriers. Recruitment process outsourcing-in which the recruitment task is handed over to third party specialist thus making it more focused and efficient. Other ways are Referrals, Outsourcing, Poaching/raiding- where "buying talent "is the latest mantra. Poaching is employing a competent and experienced person, already working with another reputed company, in the same or different industry. E-recruitment involves the use of various web portals in recruitment.

Compensation itself remains very much influx. Companies have to decide whether to have stock options or bonuses as for compensation and they are not defined or constrained to the higher level only, they run from the top of hierarchy to the end of it. Does tweaking the compensation structure impacts the talent acquisition process, if yes than what all factors play a vital role in determining the current package negotiation strategies.

Although skills, abilities and the like directly affect pay levels, other factors may come into play. Pay levels may be influenced by the kind of business, the environment surrounding the job, geographic location and employee performance levels and seniority. For example, private sector jobs typically provide higher rates of pay than comparable positions in public and not for profit jobs. Employees who work unusual hours (e.g. the mid night shift) or work in geographic areas where the cost of living is higher (e.g. Chicago rather than Parkersburg West Virginia) are typically more highly compensated. Employees who have been with an organization for a long time may have had a salary increase each year.

Irrespective of the foregoing factors one other factor is most critical - management's compensation philosophy. Some organizations, for instance don't pay employees any more than they have to. Some organizations are committed to a compensation philosophy of paying their employees at or above wage levels in order to emphasize that they want to attract and keep the best of talent. Employee benefits: Membership based rewards designed to enrich employees' lives. Employee benefits are non-financial rewards designed to enrich employees' lives. They have grown in importance and variety over the past several decades. Once viewed as fringes today's benefit packages are considered effort to provide something that each employee values

The benefits offered by an organization will vary widely. Most organizations are legally required to provide Social Security and workers' and unemployment compensations, but organizations also provide an array of benefits such as paid time off from work, life and disability insurance, retirement and health insurance benefits are frequently paid by both the employer and the employee.

In this research project I have studied the impact of compensation on recruitment of senior management and attempted to provide some ways so as to make recruitment more effective and to reduce the cost of hiring an employee. This project however is an attempt to share as best as possible my experience in corporate world with all my colleagues and my faculty. I would be delighted to receive reader's comments which maybe valuable lessons for my future projects.

CHAPTER 2: 

LITERATURE REVIEW

2.1 Recruitments as the most important aspects of Human Resources Management

Recruitment is almost central to any management process and failure in recruitment can create difficulties for any company including an adverse effect on its profitability and in appropriate levels of staffing or skills. Recruitment is however not just a simple selection process and requires management decision making (Verena Veneeva) and extensive planning to employ the most suitable manpower. Competition among n business organizations for recruiting the best potential has increased focus on innovation, and management decision making and the selectors aim to recruit only the best candidate who would suit the corporate culture, ethics and climate specific to organization.

Nowadays business process has evolved with the increase in technology. One element of this technology is the introduction of internet into the recruitment process by organizations, commonly referred to as e-recruitment. Erica R. Marr (2007) The use of internet as a recruitment tool or more specifically as a recruitment source for human resource practitioners has occurred within a relatively short period of time but has become increasingly popular, primarily due to its reach in formerly untapped market with minimal cost (Bingham ,Ilg, & Davidson, 2002; Magrath, 2001, Smith et al, 2004).The question that arouses out of the increasing reliance on and the use of this source is whether e-recruitment is worthwhile investments for organizations or should the focus of recruitment revert back to more traditional sources such as newspaper advertisements or consultancies? The cost associated with the recruitment staff can be extensive and burdensome, and the choice of recruitment source can have a direct impact on monetary and resource costs in terms of effectiveness in recruiting a manageable target market of quality candidates (Courtis, 1994). Therefore, the assessment of the source of effective recruitment will have an impact on the success of the organization's ability to progress and grow.

2.2 Novel recruitment practices - E-recruitment tools

Due to changes in today's scenario, many novel recruitment practices are being used which are Headhunters-like naukri.com, timesjob.com which act as a linker between the employee and the employers and provide the HR solutions to the company. They bridge the geographical barriers. Recruitment process outsourcing-in which the recruitment task is handed over to third party specialist thus making it more focused and efficient. Other ways are Referrals, Outsourcing, Poaching/raiding- where "buying talent "is the latest mantra. Poaching is employing a competent and experienced person, already working with another reputed company, in the same or different industry.

More sophisticated e-recruiting tools are helping many companies achieve greater recruitment process efficiencies. Companies using more refined e-recruitment tools, such as the "dot-jobs" domain, demonstrate better recruitment effectiveness and are more in tune overall with recruiting best practices. Advancements in recruitment technologies, combined with the growing importance of niche job boards and social networking sites, help make the process of applying for jobs simpler, the survey indicates.

The integration of E-recruitment into the system will serve to move the recruiter up the value chain, allowing them to be far more strategic.

In examining the findings, the key message for recruiters is to acknowledge that the adoption of e-recruitment is about more than just technology. It is about the recruitment system being able to attract the right candidate, the selection process being based on sound and credible criteria, and the tracking process being able to integrate with existing systems. Perhaps most significantly, e-recruitment is about cultural and behavioral change, both within HR and at line management level. From our evidence, we suggest that for e-recruitment to deliver, it is about developing the capability of HR to facilitate the system and to view the staffing process as an end-to-end process, similar to that of a supply-chain.

Using state-of-the art job search engines, online recruitment has become a powerful tool for a fast, efficient and economical job search and the performance is improving constantly. But every jobseeker should be aware of the fact that even the most powerful job search engine should be considered only as a single tool in the Job Search Strategy and that still most jobs are found using personal Networks. (Oswal J. Eppers) Finding a job is all about people, the people you know, and people you meet who have the job information and who will inevitably help you get a job. Online Job Search using all-in-one or metasearch engines definitely makes life much easier but should not be overestimated.

The cumbersome process of recruiting traditionally either through a newspaper ad or a consultant, can be to a large extent minimized by recruiting the electronic way. The most crucial element in recruitment to any organization is cycle time. A newspaper has almost 95 per cent reach among the target group, but its shelf life is very less. On the other hand, a recruitment consultant's services cost a lot of money. (Murlidhar, Managing Director, jobstreet.com) The advantage of registering with a job portal is that for a fixed annual fee, the company has access to job seekers for the entire year. Plus the shelf life of the job is very long, till the company pulls out the announcement. It takes on an average 30-60 days to recruit a mechanical engineer through the traditional recruitment channels like newspapers or consultants. Which means some monetary loss every month in billing, at least? In comparison, "it takes just about seven to 15 days to recruit a similar resource electronically, this huge cycle time reduction is a boon to companies."

Technology has truly revolutionized the way businesses work. Not only do job hunters have a wider range of options before them, the way they go about searching for that ideal job is markedly different from their predecessors. The Internet has created a massive platform on which companies across the world can advertise vacant posts. Prospective candidates can now sift through thousands of job offers and pick at their leisure.

Online recruitment provides a fast, flexible and cost effective solution for companies that are in dire need of fresh blood.

A "headhunter" wherein a third-party recruiter seeks out candidates are generally considered more aggressive than in-house recruiters or may have preexisting industry experience and contacts. Headhunters are typically small operations that make high margins on candidate placements (sometimes more than 30% of the candidate's annual compensation). Due to their higher costs, headhunters are usually employed to fill senior management and executive level roles. Headhunters are also used to recruit very specialized individuals; for example, in some fields, such as emerging scientific research areas, there may only be a handful of top-level professionals who are active in the field. In this case, since there are so few qualified candidates, it makes more sense to directly recruit them one-by-one, rather than advertise internationally for candidates. While in-house recruiters tend to attract candidates for specific jobs, headhunters will both attract candidates and actively seek them out as well. To do so, they may network, cultivate relationships with various companies, maintain large databases, purchase company directories or candidate lists, and cold call prospective recruits.

More and more we are seeing the emergence of specialized firms which only staff for a very narrow specialty. Because of their focus, these firms can very often produce superior results due to their ability to channel all of their resources into networking for a very specific skill set. This specialization in staffing allows them to offer more jobs for their specific demographic which in turn attracts more specialized candidates from that specific demographic over time building large proprietary databases. These Niche firms tend to be more focused on building ongoing relationships with their candidates as is very common the same candidates are placed many times throughout their careers.

Increasingly lower recruitment budgets are encouraging innovation in the recruitment sector and companies are looking to develop new approaches to the challenge of finding and retaining the most talented staff. Hiring managers are beginning to realize that the recruitment process as run by the traditional recruitment agency is little more than placing the job advertising on a range of relevant online employment websites for their sector and then shortlisting the best candidates from those who apply.

Under pressure to reduce costs, both large and medium sized employers tend to undertake their own in-house recruitment, using their human resources department, front-line hiring managers and recruitment personnel who handle targeted functions and populations. In addition to coordinating with the agencies mentioned above, in-house recruiters may advertise job vacancies on their own websites, coordinate internal employee referrals, work with external associations, trade groups and/or focus on campus graduate recruitment. Some large employers choose to outsource all or some of their recruitment process (recruitment process outsourcing) however a much more common approach is for employers to introduce referral schemes where employees are encouraged to source new staff from within their own network

These firms are the new hybrid firms in the recruitment world able to combine the research aspects (discovering passive candidates) of recruiting and combine them with the ability to make hires for their clients. These firms provide competitive passive candidate intelligence to support companies' recruiting efforts. Normally they will generate varying degrees of candidate information from those people currently engaged in the position a company is looking to fill. These firms usually charge a per hour fee or by candidate lead. Many times this uncovers names that cannot be found with other methods and will allow internal recruiters the ability to focus their efforts solely on recruiting.

2.3 How to Attract and Keep Productive Employees

A productive employee is a satisfied employee. Productive, satisfied employees create successful businesses. It's your job to create the environment that enables employees to feel satisfied on a consistent basis. (Marian Banker)

What do people want from a job? The consensus reached from my reading and my personal experience in working with clients is that, regardless of the job title and duties, an employee in any business wants the following - in descending order of importance or weight.

Pleasure - Job pleasure includes looking forward to going to work and feeling satisfied when the day is done. What that means will be different for each employee. It may come from being creative, successfully carrying out an assignment or task, seeing a positive result from their actions, knowing they've contributed to someone else's good or receiving respect and recognition from others.

A creative person will be most productive being creative. A detail oriented person will enjoy digging into the minutia. Moving a technical genius into an administrative position probably isn't going to be productive - anywhere. Job duties and individual personal qualities need to come together in order to maximize productivity.

Money - For most employees, money is only important when it feels like the pay does not match perceived value. Money can add to job pleasure, but does not replace or supersede it. Those who are driven by money alone may have trouble aligning with the rest of the team.

Comfort/Time-Off - Everyone has a different definition of comfort. For some people working close to home is a comfort because of family needs. Flex time or extra time off may be needed for a variety of reasons. Feeling in a bind because of conflicting demands takes away from productive focus. Willingness to negotiate is the key to success here.

Security/Benefits - No one wants to feel like they may be the next to go or that the company is in dire circumstances out of their control. Benefits are more important to some than to others. Benefits that fit the needs of each individual is ideal and may be negotiable. Make sure the employee understands their benefits and their responsibility in order to receive them.

It's been shown time after time that there is a high positive correlation between employee commitment/productivity and reduced turnover. A stable, low turnover work force produces significantly more.

2.4 Compensation and Benefits

To understand compensation management one must first understand what the term compensation refers to, and then decide how to "manage" it Compensation is largely considered any "reward or payment for services performed" typically offered to employees of a company (Caruth & Handlogten, 2001). Compensation is not limited to financial incentives and direct incentives; rather, compensation may include wages, bonuses, insurance or other "monetary benefits" that the employer provides to the incumbents of a facility (Caruth & Handlogten, 2001). Compensation is "total reward package offered by an organization to its employees" (Caruth & Handlogten, 2001).

What our jobs pay and what benefits we get fall under the heading of compensation and benefits. Determining what the levels of compensation will be is by no means easy. Determining a cost effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard, and ensure that pay levels will be perceived as fair.

The goals of compensation administration are to design a cost effective pay structure that will attract and retain competent employees and to provide an incentive for these individuals to exert high energy levels at work. Compensation administration also attempts to ensure that pay levels, once determined, will be perceived as fair by all employees. Fairness means that the established pay levels are adequate and consistent for the demands and requirements of the job. Therefore, the primary determination of pay is the kind of job an employer performs. Different jobs require different kinds and levels of skills, knowledge, and abilities and these factors vary in their value to the organization. So, too do the responsibility and authority of various positions. In short, the higher the skills, knowledge and abilities and the greater the authority and responsibility the higher the pay.

Compensation is an important motivator when you reward achievement of the desired organizational results. Compensation strategy can reinforce the organizational culture that you desire. This is an enabling organizational culture under which pay is linked to performance. The compensation policy reflects strategic business objectives. By providing the right combination of benefits which are non-cash compensation your organization can motivate employees and make them stay to help in its progress. There are two types of rewards, monetary and non-monetary. Monetary rewards include salary, bonus, commissions, medical and health benefits, holidays, and retirement benefits. Among the non-monetary rewards are meaningful and challenging works, recognition and career advancement, safe and healthy working environment, and fair treatment.

2.5 Trends In Executive Compensation Strategies And Design

While executive compensation practices are evolving under the new guidelines, the first principles of executive compensation continue to be the same: to attract, motivate and retain the best talent. An executive compensation design that satisfies the regulators and minimizes business risk must also meet those first principles. An inefficient tax structure that results in adverse tax treatment for executives will not satisfy those principles and will generally result in substantial additional costs to the company that compensates those executives for their tax burdens. The focus is also on components of your compensation package such as benefits, bonuses, profit sharing, retirement packages such as 401(k)s and pensions, executive compensation, and salary research. Individuals try to negotiate salary and maximize income potential.

In fact, while recruiting, employees prefer indirect remuneration to direct pay. Since benefits are not taxed and hence form an attractive component of package (Aswathappa). An employee joins and stays with an organization which guarantees attractive fringe benefits. Besides vacations along with holidays and rest breaks help employees mitigate fatigue and enhance productivity during the hours actually employees work. Moreover this also helps in building a good corporate image.

Each party in a negotiation can fulfill specific needs and wants of the other party, a concept called "relative power." According to Wegerbauer, understanding your strengths and resources; being able to respond to the needs of the other party; and knowing your competition enable you to assess your bargaining position more accurately. Relative power is a function of business climate factors, company factors, hiring manager factors and applicant factors which need to be planned and communicated effectively.

In order to align performance, pay and rewards to support corporate transformation there exists four strategic elements in a closed loop, or continuous process. These are:

• translating business issues into compensation or HR interventions

• designing and delivering them with key objectives

• leading the resultant change process, and

• reviewing or evaluating the outcomes.

Strategic compensation is a significant contributor to different forms of competitive advantage, including

• Better business results

• More effective performance

• Stronger capability

• Higher staff attraction and retention levels

• heightened motivation, and

• Employee satisfaction.

Compensation is not the cut-and-dry subject it used to be. Once you had to worry only about an employee's base salary or, at most, a base salary and commission. Today, you need to think in terms of compensation packages - including salaries, stock options, employee stock ownership plans, pay-for-performance plans, bonuses, profit sharing, commissions, noncash rewards, variable pay, and much more.

Remuneration strategy must jell well with corporate strategy. If corporate strategy is to invest top grow, remuneration strategy should be designed to stimulate entrepreneurism. If business strategy is just to manage earnings, remuneration strategy should reward management skills. Finally, remuneration strategy should stress on cost control, if corporate strategy is to reinvest elsewhere.

The remuneration scheme must have two components- a base rate and the scope for increasing the base rate. Compensation is designed keeping in mind the Job Description, job evaluation, Job Hierarchy and by conducting certain pay surveys to establish pay differentials according to the labour market.

2.6 Challenges of Remuneration

As the economy grows stronger and the range of new work expands, there is a renewed focus on the importance of attracting and retaining qualified staff. (Robert Smith)

In the scramble to attract and keep top talent, compensation once again becomes a much-discussed topic for both employers and employees.

The following challenges are being faced while designing the package - skill based pay, salary reviews, pay secrecy, comparable worth, employee participation, elitism/ egalitarianism, below market or above market rates, and marketing vs non marketing rewards.

Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies.

In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or 'embed', their resourcing team(s) in the client organization's offices, but work in tandem with the senior human resource management team in developing the longer-term HR resourcing strategy and plan.

People typically believe that compensation is about money, with employee benefits receiving serious, but secondary, consideration. For that reason, design firm managers tend to concentrate on staying competitive primarily in those areas. While both are important, salary and benefits should not be a firm's only compensation administration consideration.

When making a decision to join (or stay with) a firm, most people sort through and try to prioritize a complex bundle of personal requirements. This "hierarchy of needs"-as originally conceptualized by Abraham Maslow range from basic survival needs to the utmost psychological desire for self-actualization. Many of these needs do not relate directly to either salary or benefits.

Maslow's hierarchy teaches that when an individual accomplishes each level, "satisfaction" won't necessarily be the result. Rather, the individual is likely to start yearning for achievement at the next-higher level.

For example, once the individual obtains reasonable physical comfort (housing and clothing) and physical safety (money in the bank, home equity, life insurance), the next step might be to seek association with a prestigious firm. After reaching that milestone, the individual might aspire for professional recognition, and so on.

Of the various hierarchical needs described by Maslow, only some have a direct link to compensation. Clearly, money is a primary factor enabling the individual to meet physical needs. Money also is key in achieving safety and security, primarily in the form of adequate insurance and retirement savings. Even the need for prestige and status, as satisfied by a new BMW or a spacious beach house, requires substantial funding.

However, over the full range of Maslow's hierarchy, the majority of other needs are NOT tied directly to base salary, bonus, or benefits. Rather, most of Maslow's hierarchy addresses needs associated with work activity and the workplace itself.

Self-actualization

§ Competent design professionals "chase money" (by changing firms) only to return to more modest compensation at a firm where they have greater opportunity for self-expression.

§ Talented design professionals struggle at close-to-starvation wages to stay involved in design.

§ Capable design professionals routinely deplete a project's production budget in pursuit of design perfection.

Money alone will not offset a bad working environment or the lack of true career opportunity. Employees rarely join (or leave) firms solely because of compensation or benefits. Using the lessons taught by Maslow's hierarchy, managers must look to the whole firm and employment experience to attract and retain appropriate staff.

2.7 Impact of Non-monetary Compensation in attracting employees

When conditions are right, employees derive non-monetary compensation from those aspects of the employment experience that provide value or satisfaction without necessarily delivering a measurable reward. Said differently, non-monetary compensation is nothing more complicated than "psychic income." It rewards the employee in some uniquely psychological way, largely unrelated to salary or employee benefits.

A firm's ability to deliver meaningful non-monetary compensation depends on the answers to some very important questions:

§ Culture of the office

What is the firm's approach to interpersonal relationships? How concerned is the firm for the individual? What is the firm's true commitment to work-life balance? What is the firm's attitude about the work? Is the firm only concerned about profitability? Does the firm support building strong relationships among staff at both the professional and personal level?

§ Project characteristics

Does the firm's project portfolio offer a reasonable amount of variety in work over time? Does the firm consistently deliver quality work that reinforces the individual's pride in being associated with the firm? Does the firm pursue work of a scale that speaks to the professional ambitions of the individual staff member?

§ Nature of the process

Does the firm work in project teams or departments? Are service delivery processes flexible or rigid? Is the work accomplished by individuals working largely on their own, or is there a high degree of collaboration among talented, committed professionals?

§ Working conditions

Do the image and layout of the office contribute to professional pride and productivity? Are the furnishings and finishes stylish and durable? Does the firm provide reasonable technology to support the designers' work? What is the availability of other resources, such as IT support, a resource library, training and development opportunities, etc.? How accommodating are the firm's hours of operation-e.g., does the firm offer flextime or Fridays off?

§ Location of the office

Does the office location allow a reasonably easy commute? How accessible is public transportation? Is parking convenient and affordable? Are there shops, restaurants, and cultural resources nearby?

Every firm's answers to these questions will differ, as every employee's decision about what's important also will differ. There are no absolute rules about "what's right," just varying degrees of appropriateness.

10 non-monetary benefits to attract and retain top developers

Education

Very few companies invest in their employees. Part of the problem is that employee benefits tend to be available to all employees, regardless of the department. So it is considered better not to offer education benefits to developers than to have to offer them to all workers across the board. Unfortunately, developers don't quite see it that way. It is a poorly hidden fact in the industry that developers are expected to learn new skills at their own expense and on their own time, not while on the clock. No one would run a factory and expect the plant workers to learn the safety rules at home, so why does the IT industry expect it?

In addition, developers are in a constant race against the obsolescence clock. Sure, some developers with outdated skill sets might find work maintaining a legacy piece of code - but they might not. Put some money into keeping your developers up to date, even if you don't plan to make use of those skills, and your staff will be a lot happier. Not only will they know you value them, but they will be less likely to jump ship for a job that gives them the chance to stay fresh.

Work/life balance

Many developers work a lot more than 40 hours a week. Indeed, a lot of them do it without being asked. The flip side is that they sometimes need some flexibility on their employer's part, too. Let's get real: If someone works 48 hours a week for six months, and then 60 hours a week for the last six weeks of the project, do you really need to deduct it from his vacation time if he wants to take a half day to see his kid's baseball game? Would it kill the department or hurt the project if he took a few days off for no good reason at all?

If you suddenly start to enforce the time-off rules after pushing your team hard, employees will start to wonder if you have a heart at all. Give your people some time off, even if it delays a project, when you see burnout is approaching. It costs tens of thousands of dollars to recruit a developer, weeks (or months) to integrate the new developer into a project, and so on. Missing a deadline by a day or two to make sure that your team stays together hurts a lot less.

Relaxed environment

How often does your team see customers face to face? Probably not too often. So why are you enforcing the dress code? Developers tend to be less happy adhering to certain rules of professionalism, such as hair and beard length, dress codes, office decoration standards, and so on, than other employees in the firm. Giving them a bit of leeway (within reason, of course) will cost you nothing and help keep them content. This also applies to things like personal calls, the timing of breaks, and so on. I have yet to meet a developer who likes to work in a factory environment, with scheduled breaks, no calls allowed, etc.

Professional development

Professional development is more than education. It can range from allowing developers to spend a few hours a week on a personal project with new technologies to letting them try their hand at a different job. Would you rather see your career-minded employees trying on a new job title or learning new skills while on your payroll or on someone else's? The IT industry is fairly fluid, and many developers want a true career path, not just the road from developer to senior developer. Give them that path and you can recruit and keep them.

Free food

I know that this sounds very "1990s dot-com bubble." But some good ideas came out during that era, and one of them was free food. Many developers work through lunch. It is a well established fact that even a momentary distraction severely hurts productivity. I am not suggesting that you chain your coders to their desks and stuff their faces with gruel. But making a healthy, free meal available to those folks "heads down and in the zone" will keep their efficiency and morale up. And let's be honest, for what it costs to keep a good developer on staff, how much can it really hurt your budget to throw a pizza or hoagie in there once in a while?

A career path

Some developers have no desire to ever go past senior developer. Others look toward architect or project manager, or some other job title, as their career goal. Regardless, an employer that helps its developers meet their career goals, and makes it clear that progress is being made, is much more likely to retain its employees. A lot of companies talk a great game in the interview about how they "help their team achieve their dreams." But looking at how some companies treat their people, it's easy to see why folks get cynical about that promise. When putting your people on the career track of their choice is something you actively work to do, your people see it and are much less likely to leave. After all, why leave for a promise, when the current reality looks pretty rosy?

Top-of-the-line tools

Maybe it is a bit of a cliché, but developers and other techies really do like having toys to play with. Spending the extra few hundred dollars to buy a high quality workstation as opposed to an economy model business desktop will make your coders feel valued and special. Give them the new gadgets they crave. Candidates who see that you give your teams serious tools will take you seriously. Even better, this is an expense you can justify; compiling code, performance profiling, and so on, all chew up huge amounts of CPU power and RAM. Buying that fast computer saves your people time, which in turn results in higher productivity.

Physical work environment

No one likes to work in a place that looks like a dump and has all the charm of a dungeon. The candidates you interview have probably been in a few offices (or currently work in one) that look really nice: Aeron chairs, polished conference tables, frosted glass, and brushed nickel. If your office features industrial remainders carpeting, mismatched chairs left over from the 1970s, and a cubical farm of 6′ x 6′ workspaces, they're not likely to be impressed. And it's not just about looks. Many upgrades truly improve ergonomics and productivity through encouraging better posture, reducing eye strain, and so on.

There are so many reasons to welcome candidates into a pleasant office. For one thing, first impressions really do matter. For another, candidates who see that you refuse to pay more than $20 for a chair will wonder what their bonus will look like. Once someone gets onto your team, a nicer and more ergonomic work environment helps retain them. After all, if someone gets blinding headaches from cheap fluorescent lighting every time he comes into the office, he will eventually stop coming to the office.

A great project and a winning team

Just as a top athlete will demand to be traded to a championship-level team, the very best developers are generally searching for the very best projects to be on. In sports, when great athletes go to a team that is doing badly, they were probably either offered a huge pile of money or lured in with the promise of heading up a "new era" for that team.

For you, this means that to get the very best developers, you either need to have a great project and a winning team or you need to pony up the big bucks. No one likes to play for a loser or with a bunch of losers, and those "top draft picks" have alternatives. If your project is struggling or if the team is floundering, don't hide it. It takes only a week (or less) on the job for an outsider to smell the rot anyway. Make the situation part of your sales pitch. Saying something like, "Our project is having problems because the team is a bit inexperienced. We would like someone like you to provide that senior level quality and help make this a world class team" can attract and keep the developers that the salary you are offering would not bring in.

A challenging job

It may sound really crazy, but few top-tier people in any profession like working in an unchallenging job. Morgan Freeman does not act in B-films, and superstar developers don't spend their time writing "Hello World." After all, they didn't become great by staying within their limits, did they? When you show your candidate (or give your employees) a job that challenges them, within reason, and gives them a chance to learn new things and grow, they are likely to overlook the alternatives. Tell the prospective candidates why the job will be a challenge, and they will leave that interview already savoring the thrill of victory when they meet it. Show them a job that any entry-level person can handle, and they will wonder how long they will be there until they are replaced with an entry-level person.

Non-monetary Compensation Also Involves Creating "Associations"

At a fundamental level, most design professionals seek to be associated with great projects, great clients, great designers, great teachers, and great colleagues. These associations address the individual's need for identification with a successful group and the need for prestige and status among his/her peers.

Design professionals must be able to establish important career contacts, forge meaningful personal relationships, and perhaps most importantly, learn and grow from those associations. Non-monetary compensation typically promotes learning and growth and provides the opportunity to participate, develop a reputation, travel, and socialize.

The hierarchy links the search for such opportunities directly to Maslow's self-actualization concept. Firms that ignore these needs will tend to have higher turnover and operating costs and lower motivation and morale.

The essential question about monetary vs. non-monetary rewards is not an "either-or" question. The best firms endeavor to deliver both. In the end, every employee makes a subconscious calculation of the two:

Monetary income + psychic income = total income

When available in reasonable quantities, psychic income helps the senior professional see a clear path toward advancement and satisfaction. Most senior professionals are able to make rational decisions about the trade-off between professional satisfaction and economic reward. Ultimately, most senior professionals will choose the option that provides the highest "total" income.

The goal is to deliver and maintain a reasonable balance between monetary and psychic income by conducting research of the true market value for labor and compensate fairly. In the end, firms that deliver both monetary income and physic income in a fair, and innovative manner will attract, retain, and develop quality personnel, keep them satisfied, and foster company loyalty.

CHAPTER 3:

OBJECTIVE & RATIONALE

The Objective of my study is "to understand and critically analyze the impact of compensation on recruitment of senior management"

To analyze various means of Recruitment and package negotiation strategies.

Identify what Recruitment methods are being used for senior management.

To Study the impact of the integration of Recruitment and compensation.

Conducting an In depth analysis of recruitment and compensation strategies for senior management. Understanding the strategic advantage of sourcing executive-level and senior management as well as the acquisition of scarce or 'high-potential' recruits has been a long-established market serviced by a wide range of 'search and selection' or 'headhunting' consultancies, which typically form long-standing relationships with their client organizations. Identifying the impact of compensation on recruitment and selection of an employee who is at the maximum point of his or her salary range.

CHAPTER 4

RESEARCH SCOPE & METHODOLOGY

A Research Methodology defines the purpose of the research, how it proceeds, how to measure progress and what constitute success with respect to the objectives determined for carrying out the research study.

4.1 Research Design- Exploratory cum descriptive Research

The appropriate research design formulated is detailed below.

Exploratory research: this kind of research has the primary objective of development of insights into the problem. It studies the main area where the problem lies and also tries to evaluate some appropriate courses of action.

The research methodology for the present study has been adopted to reflect these realties and help reach the logical conclusion in an objective and scientific manner.

The present study contemplated an exploratory research

Primary sources - direct involvement in recruitment process, consultation with some talent acquisition managers and consultants.

Sample Size- 30 recruitment managers or consultants

Secondary Sources - collected through books, articles, reports, journals, magazines, newspapers reports prepared by research scholars, universities and internet.

Region- Delhi/ NCR

4.2- Research Tools

Data was collected by conducting interview with various senior managers and consultants who were an eminent part of the recruitment and selection process. This was done to get an insight over all the factors that are considered before deciding the compensation package in order to acquire a new employee into the organization.

Relevant statistical software (SPSS) has been used for conducting the analysis of the same to draw an inference.

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