Essay Example on According to Torrington and Hall Performance management Systems








COMPENSATION AFFECT PERFORMANCE FINAL PROJECT Performance According to Torrington and Hall Performance management systems are increasingly seen as the way to manage employees performance rather than relying on appraisal alone Such systems offer advantage of being tied closely into the objectives of the organization and therefore the resulting performance is more likely to meet organizational needs Similarly according to my perception performance is explain as a integrated and strategic approach to convey a continued success to organizations by updating the performance of the employees who works in them and by developing the abilities of terms and contributors Compensation In simple words compensation is all things that a company offers to its workers on the behalf of their expertise and quality time When organized the right way compensation money can be strategically planned to reduce turnover promote employee engagement and attract the right talent The main reason of compensation management is to make the most of company money in a way that rewards employees for their work Or compensation is the payments of cash and non cash that you pay to your work force in return for the work they do for your business Compensation is more than an employee regular paid wages It's also includes many other type of wages and benefits Compensation effect on Employee Performance

A compensation parcel does not compulsory means rewarding in the fiscal form It also contains more flexible benefits like medical facilities work and life balance as well as employee perks Now a day s employees not work only for the cash but also give equal importance on other facets of compensation A good compensation parcel ensures that Retention A great compensation proposal plays important role in decreases the turnover rate of any organization And employee will be more motivated to remain their role and this will save possible expenses that are the part of turnover Motivation Compensation play a central role in motivation for employee that they consistently force themselves for great work and promotions And it gives them a good reason and a right track to work by heart for upcoming challenges While on the other hand if there is not a good compensation plan then the employee performance and efficiency will be affected Here some reason why Low Job Satisfaction If there is not appropriate compensation plan so the employee feel unsatisfied by their job and their coworker also dislike it and it live a bad impression Low Productivity Insufficient compensation simply means low productivity because there is low motivation for hard work or for good result High Turnover If prize versus efforts ratio is low then its means high turnover ratio

Like if you don't give them a good compensation plan on their good work so they leave your company just because you don t compensate them according their work Discussion This present study is focus on to understand the compensation effects on performance of any employee And as we previously explain the compensation effect on employee performance that show us how compensation is important for a good performance In any organization compensation helps to straight employee performance with organizational goals and objectives that may be long term or short term From day first money machine material and man play an important role in any organization success But from all of them MAN is the most important component for any organization performance And now a day s human resources consider as backbone of any business firms If they are happy then your business is happy and if they not then you not You can make them happy by giving them a good and attractive compensation package that improves their performance which definitely means to make your business performance better and generate more profit Compensation is normally given by fiscal rewards that can be direct or may be indirect form Direct Compensation In direct compensation are wages salaries incentives commission and stock options Indirect Compensation Indirect compensation are costly as compare to direct compensation like employee insurance workers compensation and pension plans 

When an organization make total compensation plan they must define compensation design its rules and procedure Because it is important to HRM professional to know what is compulsory for business and its goals There are different component that are need to be concentrate while we are preparing a compensation plan These are following that should be considered while design it like Compensation rate should be comparatively attractive from other organizations Compensation should be unbiased Like do not favor someone who is close to you Define a certain criteria by which pay and benefits is increasing Clearly define a process by which pay cost can be evaluate and maintain And also make a complete procedure that measures the success of compensation plan And the main purpose of any compensation plan is to obtain maintain retain attract and motivate the employee of the organization And it is very compulsory for any organization to understand that how it is importance for their firm Because a good compensation plan simply means a good performance of employee and organization Conclusion This case explains the link between compensation and performance of employee that how it can help to improve performance of employee and organization Like how to maintain attract and motivate them If there is not a good compensation plan then some issue is occur like low job satisfaction low productivity and high turnover that defiantly decrease performance rate So we terminate this case with this words that compensation is a heart of any organization that pumps blood to their employee and also for organization By this one line you can easily understand that how compensation is important and compulsory element for the betterment or success of any organization

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