Compensation and Performance management: Two Sides of the Same HR Coin
While it is unquestionably part of a human resources manager or director's job to ensure that the company achieves some level of cost savings -- and definitely cost benefit -- in its human resources expenditures, this does not mean that keeping compensation packages at the minimum possible level is the ideal target to shoot for. The well-being and satisfaction of employees is important not only to ensure ongoing loyalty and productivity, but also for intrinsic and ethical reasons. When making cost-saving decisions in regards to human resources compensation, then, certain steps and measures must be taken.
First, effective appraisals must be conducted to determine where cost savings is appropriate, and where it is unwarranted. This process must begin with a purposeful appraisal design that is in keeping both with legal and ethical requirements...
Although this is time-consuming and costly, it generally has high employee involvement and creditability, the strongest impact on behavior and performance and a positive influence on communication and goal sharing. Yet others believe that technology can be used as a tool to eliminate biases (Dutton, 2001). Software-based performance appraisals focus on results and actions rather than personality traits. Thus, they can provide more objective facts that can be used
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). However, when an employee sees that his or her employer is stepping up and trying to do something that the employee wants or needs, instead of just what is good for the company and not the employees, motivation can result. People need to feel that they matter to their employer. Few people are content with only receiving monetary compensation for the work that they do for their boss. They are
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