Compensation
plan defines as the plan of how to compensate employees for their work effort.
It is the one of the most common concepts in the professional world.
Compensation plans design a number of payment schemes which is included wages
associated with the amount of hours spent at work, wages gained from
productivity while working, health benefits, bonuses, and any plan.
Today’s
technology will enhance organization productivity and efficiency through online
compensation. So, they can use online as web based to gather, store,
manipulate, analyse, utilize, and distribute compensation data and information
for salary planning, bonus allocation, pay
for performance, and equity awards easily. Actually, the software and database
reside on a central server rather than being installed on the desktop system.
The companies have discovered that web based software is relatively easy to
implement technology that fixes the broken parts of compensation management
process, without disrupting managers by introducing needless change. In
addition, it allows line managers to participate in compensation planning
process that encourages an empowerment and retention. The increment process can
be easier acceptability of new compensation and benefit plans by employees.
Besides
that, the system gives opportunity to employer and employee to access your
business information from anywhere in the world at any time. It can be facilitates
to save times and reduce cost and improve the interactivity with your
employees. When use that system, HR management can get the information faster,
more accurate and user-friendly. This is because, in that system has been keep
the data about employer and employees. It also helps the organization to
maintain competitive pay rates, customized to labor market and manage merit
increases and compensation budgets. For example, in web based compensation they
already have budget control, compensation plan modelling, compensation
assessment, data import or export and data management that can see with all of
them in the organization.
The advantages is when some of the employees
and managers who view this technology as the work of HR and will encourage them
of real time feedback to managers and a collaborative framework to allow both
manager and HR to make it decisions. The employees also can receive a message
in web based system to view their variable pay performance targets. From this, the
effectiveness will improve either by in terms of the accuracy of information or
by using the technology to simplify the process.
(394 words)
References:
1.
Stiffler, M. A. (2001). Incentive
Compensation and the Web. Compensation & Benefits.
2.
Perlmutter, A.L. (2002). Taking motivation
and recognition online. Compensation & Benefit Review, 34 (2), 70-74