How To Maximize Compensation Commerce Essay

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This journal is focusing on how to maximize compensation. The differences in compensation related to gender concentrations among industries at different organization level of management.

Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. Difference people have difference view of what compensation is. It based on society, stockholder, manager, and employee.

There are three forms of pay which first is cash compensation. The cash compensation involves base wage, merit or cost of living and incentives.Benefits involve three things which include income protection, work or life balance and allowances. Relation return includes recognition, status, and employment security, challenging work, and learning opportunities.

Wage discrimination occurs when an employer pays a woman less than a man for substantially equal work. There is no any problem for male compensation at any dominated gender industries while the female does. Male workers not influenced by any compensation problem at any level of management while the female does.

The best solution for female to get their equitable compensation is they should become minority at any industry. They should work for male dominated industry in order to maximize their compensation and reduce the wage based gender.

INTRODUCTION

COMPENSATION DEFINITION

Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. Difference people have difference view of what compensation is. It based on society, stockholder, manager, and employee.

Some people of society see pay as a measure of justice. For example, a comparison of earnings between men and women highlights what many consider inequalities in pay decisions. Society has taken an interest in such earnings differentials. One indicator of this interest is the introduction of laws and regulation aimed at eliminating the role of discrimination in causing them.

Stockholders are interested in how employees are paid. Some believe that using stock to pay employees creates a sense of ownership that will improve performance, which will, in turn, increase stockholder wealth. But others argue that granting employees too much ownership dilutes stockholder wealth. Stockholders have a particular interest in executive pay. To the degree that the interests of executives are aligned with those of shareholders, the hope is that company performance will be higher.

For managers, compensation influences their success in two ways. First, it is a major expense. Competitive pressures, both global and local, force managers to consider the affordability of their compensation decisions. Labour costs can account for more than 50 percent of total costs. In some industries, such as financial or professional services and in education and government, this figure is even higher. However, even within an industry, labour costs as a percent of total costs vary among individual firms. Secondly, a manager can also use it to influence employee behaviors and to improve the organization's performance. It may also affect their willingness to be flexible, learn new skills, or suggest innovations. On the other hand, people may become interested in unions or legal action against their employer based on how they are paid. This potential to influence employee's behaviors, and subsequently the productivity and effectiveness of the organization, means that the study of compensation is well worth their time.

For employee itself, the pay individuals receive in return for the work they perform is usually the major source of their financial security. Hence, pay plays a vital role in a person's economic and social well being. Employees may see compensation as a return in an exchange between their employer and themselves, as an entitlement for being an employee of the company, or as a reward for a job well done. Compensation can be all of these things.

FORM OF PAY

There are three forms of pay which first is cash compensation. The cash compensation involves base wage, merit or cost of living and incentives. Base wage is the cash compensation that an employer pays for the work performed. Base wage tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees. To merit pay, cost of living adjustments give the same increases to everyone, regardless of performance. Incentives can be tied to the performance of an individual employee, a team of employees, a total business unit, or some combination of individual, team and unit. The performance objective may be expense reduction, volume increases, customer satisfaction, revenue growth, return on investments, and increase in stock value.

Benefits involve three things which include income protection, work or life balance and allowances. Income protection such medical insurance, retirement programs, life insurance, and savings plans are common benefits. They help protect employees from the financial risk inherent in daily life. Work or life balance related about the workers life. For example time away from work such vacations and jury duty, access to services to meet specific needs such drug counseling, financial planning, referrals for child and elder care, and flexible work arrangements such telecommuting, nontraditional schedules and nonpaid time off.

Relation return includes recognition, status, and employment security, challenging work, and learning opportunities.

PAY MODEL

Pay model contains three basic building block which is compensation objective such efficiency, fairness, compliance, and ethic. Secondly are the four policies that form the foundation of the compensation system such internal alignment, external competitiveness, employee contribution, and management. The third basic building block is the techniques used to make up the compensation system.

Compensation objective contain efficiency that can be stated more specifically such improving performance, increasing quality, delighting customers and stockholders and controlling labour costs. Fairness is a fundamental objective of pay systems. It is important for fair treatment for all employees by recognizing both employee contributions such higher pay for greater performance, experience or training and secondly is employee needs such fair wage as well as fair procedures. Compliance as a pay objective means conforming to federal and state compensation laws and regulations. I laws change, pay systems may need to change, too, to ensure continued compliance. As companies go global, they must comply with the laws of all the countries in which they operate. Ethics means the organization cares about how its results are achieved. Because it is so important, it is inevitable that managing pay sometimes creates ethical dilemmas. Manipulating results to ensure executive bonus payouts, misusing statistics used to measure competitors' pay rated.

Policies that form the foundation of the compensation system include four which is internal alignment, external competitiveness, employee contribution, and management. Internal alignment is about the comparisons among jobs or skills level inside a single organization. The company target is to remain their employee. Jobs and people's skills are compared in term of their relative contributions to the organization's business objectives. External competitiveness is about paying comparisons with competitors. This policy makes the company the advantage to attract and retain workers in their organization. Some employers may set their pay levels higher than their competition, hoping to attract the best applicants. The third policy is employee contribution which is important because of it directly affects employees' attitudes and work behaviors. The external competitiveness and employee contribution decision should be made jointly. Clearly, an above market compensation level is most effective and sustainable when it exists together with above market employee contributions to productivity, quality, customer service, or other important strategic objective. Management is about the right people get the right pays for achieving the right objectives in the right way. The greatest system design in the world is useless without competent management. The ground under compensation management has shifted. The traditional focus on how to administer various techniques is long gone, replaced by more strategic thinking, managing pay as pay of the business. It goes beyond simply managing pay as an expense to better understanding and analyzing the impact of pay decisions on behaviors and organizations' success.

The techniques that make up the compensation system related to the four policies. To get a result of internal structure, the technique use is making work analysis, description, and evaluation. To get the result of pay structure, the technique use is define market, do a surveys and policy lines. To get the result of performance pay is identified the seniority based, incentives, and merit guidelines. To get the evaluation of management, they should determine the cost, communication, and change. (Milkovich, Newman, & Gerhart, 2011)

PAY DISCRIMINATION

Wage discrimination occurs when an employer pays a woman less than a man for substantially equal work. Such compensation includes salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits. Wage discrimination may also occur in instances that do not meet the equal work standard. Such instances include those in which a woman holds a unique position with her employer that cannot be compared to another employee; and where a woman may be receiving wages equal to a comparable male but would be receiving more but for sexual discrimination.

COMPARISON BETWEEN EXECUTIVE AND MANAGER

 

Manager and executive are words that are very commonplace and most of us feel we know what they mean. It is a fact that many of the roles and responsibilities of a manager overlap with those of an executive. After taking a look at the roles and duties performed by a manager in a bank and an executive in an organization, it often perplexes if the two tiles are synonymous to be used interchangeably. However, there are subtle differences between the two titles that will be highlighted in this article for the benefit of readers who have any doubts.

A manager is the person who is responsible for the activities of a group of employees in an organization. He has to play the role of a motivator and mentor while guiding the employees to achieve the goals of the organization. There may be supervisors under a manger to help him in his task, but the overall responsibility for the performance of the workers under him lies on the shoulders of a manger. Different departments in a company have differently called managers such as production manager, accounts manager, sales manager, and so on. A manager is at the lower rung of the managerial ladder that he has to climb for a prominent position in the management. These days, managers are hired by celebrities too to look after their careers. 

On the other hand, an executive is a person who is responsible for putting into action the plans and policies of the top management of a company. He is the person who has to see that the day to day functioning of the company carries on smoothly without any hitches. In short, an executive has to oversee the administration function of the organization. An executive has a higher standing in an organization than a manager.

THE PROBLEM

Journal focus

This journal is focusing on how to maximize compensation. Almost of the researcher do a research on identifying the relationship between industry and occupation with compensation. Nowadays, the differences in compensation related to gender concentrations among industries at different organization level of management.

Discrimination

Women workers are always related to pay discrimination. Many researchers suggest that female workers had been given compensation differently with the male workers. The gender wage gap for example was obviously high where the women always receive their compensation lower than the male workers.

Gender dominated industry

Gender dominated industries can be dominate by female or male workers. There is no any problem for male compensation at any dominated gender industries while the female does. So, it means that there are no problems for the maximizing compensation for the male workers at all. Female difficult to get equitable compensation when they work at male dominated industries. It is because male feel threaten by the power of the women workers. Other than that, in certain situation, in female dominated industries the female workers have problem on maximizing compensation due to high supply of women workers. It means that even there is dominated same gender of female, there is still discrimination happen.

Organization level of management

Male workers not influenced by any compensation problem at any level of management they sat whether they are manager or executive at any gender dominated industry, they still can get maximizing compensation. For female, there is some problem influencing their compensation. It seem difficult to the female workers to compete in male dominated industry. They should prefer more to become lower level of management such manager rather than become the high level management such the position of executive.

LITERATURE REVIEW

Different gender dominated industries with different compensation

As stated by Bergmann, 1974; Sorensen, 1990; Tam, 1997, some researchers found that certain occupations raises the supply of labour among the crowd of women in those occupations and reduces wages while others researcher found that the work of women devalues by society causing employers to be less willing to pay workers in jobs viewed as female jobs. It obviously that female worker was discriminate even in female dominated industries.

About 20 per cent of the wage gap between men and women across industries (Blau and Kahn 2006; Fields and Wolff, 1995). The wage gap always stated that the wage of male is higher than the women at any gender dominated industries. Whether male or female dominated industries the female workers will get lower wage compared to male workers.

The different gender concentration of an industry affected the result on compensation of different gender. For male workers, there is equitable pay for compensation whether they work in male dominated industry or female dominated industry. So, it means that there are no problems for the maximizing compensation for the male workers at all.

For female workers, their compensation always affected by the gender dominated industry. In male dominated industry, their compensation constrains that feminist of women face due to the masculine culture and decision making power held by men. In female dominated industry, crowding of women into certain occupations raises the supply of labour in those occupations and reduces wages. It means that even there is dominated same gender of female, there is still discrimination happen.

Different wage industries with different number of women workers

Compensation of female workers influence by the industries based wage. The high wage industries the few women employees while the low wage industries the more women employees (Dickens and Katz, 1986). Compared to male workers, they did not influenced by the industries based wage at all.

Different level of management level with different compensation

The position level of different gender in gender dominated industry affect their compensation. As usual, the male workers not influenced by any compensation problem at any level of management they sat whether they are manager or executive at any gender dominated industry, they still can get maximizing compensation.

For female, there is some problem influencing their compensation. It seem difficult to the female workers to compete in male dominated industry. They should prefer more to become lower level of management such manager rather than become the high level management such the position of executive.

Studies suggest that the position of female as managers and executives face more problem and move up the organizational hierarchy, especially when working in male dominated industries (Eagle and Carli, 2007; Meyerson and Fletcher. 2000; Hultin and Szulkin, 2003). Although, other studies suggest that the gender wage gap can be less in possibility if there are women in level of leadership. (Cohen and Huffman, 2007; Kwon and Milgrom, 2009).

Because the women workers experience to be better position in management level in male dominated occupations, the equalization process is slow. (Eagly and Carli, 2007; Kirchmeyer, 2002; Maume, 1999) Studies stated that if the women workers want to success for their compensation at male dominated industries, they should have the cultural feminist and leadership styles adopt from the male workers (Acker, 1990).

The minority of women workers influence the compensation

The wage gap between male and female executive will decrease if the female executive increase in proportion in top management of an organization. Male resistance to a stronger minority of women through the action of increased turnover may also explain the decrease in wage gap as the proportion of female executives increases (Kwon and Milgrom, 2009).

Majority of women workers want to get higher paying jobs than the male workers. The male workers are only seeking on the jobs based on their work life balance. (Hakim, 2006; Farrell, 2005)

Factor of maximizing compensation

Male workers seem not influenced by all industry and any management level they sit. Whether they work at male or female dominated industry, they will get equitable compensation. Even they work at any level of management such executive or manager, they still given the equitable compensation. So, it is not a problem to maximizing their compensation.

If the women workers become high level management in male dominated industry, there still have wage gap between male that have same position as high level management. It is because the male workers will feel threaten by women power. Women executive are still not seen as worthy of equal compensation in male dominated industries. They cannot accept that the female can use their power more than male in male dominated industry.

The factor of women workers have lower compensation if they work in female dominated industry at lower level is because of high supply of women labour. If the women labour supply is high, the wage will low. The wage gap between female lower levels at female dominated industry with female lower level at male dominated industry is high. This is because of how many supply of labour the industry have. The lower supply women workers in industry, the more the industry take care of them by maximizing compensation. It is because difficult for the industry to replace them by other women workers.

PROPOSITION

To maximize compensation for female workers, they need to work as minority and changing industries but for male there is only equitable pay even whether they work at male dominated industries for every level or work at female dominated industries at executive or managerial level. (Susan M. Adams, Atul Gupta and John D. Leeth, Apr 2010)

In general, men earn as much as or more than women at every organization level. Men at the manager and executive levels will find that the gender concentration of an industry does not affect their pay. So there is no any problem of the compensation at all among the male workers. The management should take care and maintain the equitable compensation for the male workers whether they are in male or female dominated industries. Other than that, the management of organization should notice to retain the standard compensation given to the male workers at any management level.

The best solution for female to get their equitable compensation is they should become minority at any industry. They should work for male dominated industry in order to maximize their compensation and reduce the wage based gender. It is because when the female work at the male dominated industries as minority mainly as lower level of management, or become minority as the top management in female their compensation can be maximize. This can solve their problem in term of compensation.

Women must become managers in the male dominated industries to lessen the gender wage gap. Then, women must make it to the executive level in a female dominated industry to finally be valued by financial compensation.

Gender gap in compensation should target male dominated industries at a lower level of management. Women need to greater access to male dominated organizations and need to be valued through compensation once they are appointed to management positions to reduce the gender gap in pay.

Human resource manager should alert of the possible biases and make sure that the organization implement the appropriate compensation practices (Susan M. Adams, Atul Gupta and John D. Leeth, Apr 2010) It is because the human resource is the part of the committee of thinking and applied the organization strategy. They have the high responsibility to make sure that the compensation of the workers is equitable with their position

Organization leaders should be aware of how industry practices are limiting the labour pool by appealing to and rewarding men more than women. Human resource managers should be educated by these findings to avoid discriminatory hiring practices and educate women about how to be more successful in male dominated industries.

CONCLUSION AND IMPLICATION

There is relationship between gender concentration of an industry and organization level of management with female compensation maximization while for male compensation there are no any relationship. It is because female workers influenced by place they work whether at male or female dominated industries and influenced by the level of organization whether low or high. The male is not related or influenced by any concentration of an industry and not influenced by any organization level of management for their equitable or maximizing compensation.

There is problem for the female workers to fight their compensation in executive level at male dominated industry and difficult to get equitable for their compensation in manager position at female dominated industries. In reflect, the female workers can maximize compensation by work as manager level of male dominated industries and easy to get equitable compensation by work as executive level of female dominated industries.

MAXIMISING COMPENSATION OF MALE WORKERS

Men earn as much as or more than women at every organization level. Men at the manager and executive levels will find that the gender concentration of an industry does not affect their pay.

MAXIMISING COMPENSATION OF FEMALE WORKERS

Women, on other hand, must become managers in the male dominated industries to lessen the gender wage gap. Then, women must make it to the executive level in a female dominated industry to finally be valued by financial compensation.

ROLE OF ORGANIZATION MANAGEMENT TOWARDS MAXIMISING COMPENSATION

Human Resource should be aware of these potential biases and try to rectify them within their organizations through the use of appropriate selection and compensation practices. To maximize the compensation, the organization management should not worry about the male workers since their compensation not affected by any gender dominated industries and any management level.

The management should more focus on female compensation how to be maximized since the female workers affected by the gender dominated industries and management level. The management should realize that they can maximize compensation if female workers work as manager at male dominated industries and work as executive at female dominated industries.

Other than that, they should avoid the discrimination mainly for female workers. They must think many strategies that can narrow the gap of compensation for women workers with male workers focusing on executive position at male dominated industries and manager on female dominated industries.

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.