Recent orders
Employee Compensation
Employee Compensation
Name of student
Name of institution
Compensation is the most important part in any form of employment. When an employees are not properly compensated for the work they have done it will lead to a lot of problems. The effects of poor compensation can be seen throughout the business environment where workers boycott, slow the pace of production, and in worst cases, they leave the jobs completely to seek better employment and wages. For this reason there are several set measures that are meant to ensure that employees are well paid. In addition, regulations should make sure the employers do not exploit the employees. Without this type of regulation or framework in force, a lot of companies would take advantage of people who need employment throughout the globe (Sullivan, 1997).
Several factors influence the remuneration of employees. The factors can be placed into two categories: external and internal. The internal factors that affect employees’ remuneration are as follows:
Ability of the firm to pay
The ability to pay is a very crucial element when it comes to paying of wages by the company. For the firms that are enjoying success in business it is much easier to pay employees slightly more than what other companies pay. Through such methods, it is possible to attract professionals who can deliver quality services. The unions that employees are part of will also use their advantage to push such firms to pay more.
Employees
There are other several factors based on employees that affect their pay grade:
Performance
In most firms the employees start off with a general salary which increases as the worker improves his performance at work. The increment of the salary works as a motivation factor for an employee to do much better (Upadhyay, 2009).
Experience
Experience in most cases makes the employee more valuable to the firm and also attracts higher wages as opposed to inexperienced personnel, and this can be seen with emerging trend of companies hiring workers that have five to ten years work experience. These companies have the assumption that an experienced employee will be a good influence to the workforce and also have leadership skill to mentor them. An experienced person can work under minimal supervision, and they do not require a costly training which must be provided to the inexperienced staff members.
Seniority
Seniority plays a big role when it comes to the issue of compensation. Nowadays senior employees fetch a higher salary compared to the juniors. Most companies are employing these senior employees on top management positions to aid the company operations process.
Potential
Most companies now pay their employees based on the potential or impact they have on the company. Most young employees fresh from school are the one fetching huge salaries. This trend can be put in an example where a graduate Indian student was offered a high paying job in IT department of Twitter. The reason is that the employee will work there for a long time and that he is a graduate and has plenty of time to realise his potential.
Job requirements
Jobs that require a lot of skills from the employees physically and mentally tend to pay more.
External factors
Laws and regulations
These factors are beyond the company’s control. There are laws that set the lowest amount payable to an employee. These laws also have an impact on the working hours of the employees and the time they get out of work with or without pay. There are also laws that focus on compulsory bonuses and working overtime; all this has a positive impact on the employee’s salary.
Labour-market
The labour markets target things like the set salary for workers in the same trade and ensure it is observed. The standard of living within the locality of office premises also has an influence on the wages of the employees.
The economy
The economy does have a huge impact on the wages of the employees. Employees in a country with a stable economy will most likely enjoy higher wages as compared to workers in a poor one.
Technological advancement
When companies advance technologically, they have to look for employees with the required skills to handle the new technology. Workers with such experience or knowledge are paid higher wages.
The communication of the pay structure to the employees is done on an individual level although there are those people who are of the opinion that the same should be done in front of all employees. Discussing a pay rise of one employee among his peers will bring up problems to the firm. The employees that would not understand why one gets a promotion and others do not will cause problems, and work will slow down if not come to a halt.
The employees are to be engaged individually when it comes to explaining them their payment structure, as there are no uniform salaries for all employees. Engaging the employees on an individual level is the best practice when it comes to discussing payment structures.
Many successful organisations work very hard to retain their employees. The process of retention is crucial when the employee is of high value to the company. To retain and employ the company should come up with a salary that is suitable for work the employees provide to the firm. The amount awarded to an employee should be discussed with him to make sure that he understands why a certain amount is paid (Bhattacharya & Sengupta, 2009).
The awarding of pay rise to the employees is a very effective form of motivation. When a company makes such a move, the employee has to be notified as to why he is receiving an increase in salary. Pay rise will act as a motivation to the employee pushing him to work even harder, it will prompt the employees to dedicate themselves to work, and it will also help in retaining hard working employees with the promise of a pay rise with every noticeable improvement on the work done by every individual (Bhatia, 2003).
Applying these strategies will work to the benefit of the company. The strategies also work as a diluting factor for both external and internal factors affecting pay. When a company focuses mainly on hiring skilled workers, it means that someday they will be forced to let go the less skilled employees. However, using the strategies above the less skilled employees will work twice as hard to improve on their output and at the same time receive compensation for their efforts.
The most important thing that employers need to have in mind when coming up with a payment plan is fairness. Fairness can be achieved through maintaining external and internal equity in the company. The company should ensure that employees in the same sector get uniform salaries; the company has to maintain external equity and achieve internal equity. External equity refers to uniform salaries and wages compared to other businesses and firms. If either of the two is violated, the business will mostly likely come to a halt. The lack of fairness will cause problems in terms of striking of the workforce, low productivity, and even absconding from work.
References
Bhatia, S. K. (2003). New compensation management in changing environment: Managerial remuneration and wage & salary administration: a professional manual. New Delhi: Deep & Deep Publications.
Bhattacharya, M. S., & Sengupta, N. (2009). Compensation management. New Delhi: Excel Books.
Sullivan, T. T. (1997). Compensation: The factors affecting one company’s change from individual to team incentive.
Upadhyay, S. S. (2009). Compensation management: Rewarding performance. New Delhi: Global India Publications.
Employee Classification Table
Table1 Employee Classification Table
No F Name LName Employee ID S H C Employee type
1 Amos KidulKidula
2343546 S
2 Anthony Barasa 3 Absolom Karanja 4 Alfred
Oluoch 5 Abiud Ochieng Table 1 showing Employee classification
Table 4 Description of terms
Term
Term_Code Term_Description
S Salaried
H Hourly
C Contracted
L Last
F First
Table 2 Invoice
Table 2 showing Employees Invoices
A category table is a vibrant table which tends to portray category information in a sequence of columns and rows. The invoice category table has auto generated IDs while the employee classification table does not have auto generated IDs.
An Object table provides a better way of organizing and arranging work for instance through the use of nested tables and variable lengths arrays. The object table as is the case with the employee classification table enables one to identify the types of objects that can be utilized in each row in the object table.
Table 5: A data base diagram with lists of vendors, invoices, terms codes, employees, and employee classifications
Vendor Activity Summary For 1/1/2013 thru 1/31/2012 Vendor # of Invoices Total Amount Average Invoice Amount Unpaid Amount Employees
Amos
Kidula EClass
S American Standard Plumbing 2 $158,450.00 $53,246.67 $17,860.00 Anthony Barasa C El’s Pipe Supply 3 $14,000.00 $16,000.00 $15,000.00 Absolom Karanja H Grainger Welding Equipment 2 $2,000.00 $2,000.00 $2,000.00 Alfred
Oluoch S Horizon Tape 3 $2,482.50 $2,482.50 $0.00 Abiud Ochieng Kitchen Sink Co. 1 $35,000.00 $16,500.00 $12,000.00 Office Max 1 $980.00 $590.00 $0.00 Skil Tools 1 $7,000.00 $2,500.00 $0.00 Totals 11 $221,212.50 $18,267.71 $45,850.00 Table 5 showing lists of vendors, invoices, terms codes, employees, and employee classifications
Employee Benefits and Cigarette Makers Penalties
Employee Benefits and Cigarette Makers Penalties
(Author’s name)
(Institutional Affiliation)
Abstract
Understanding consumer behavior and market equilibrium is essential for understanding economics (McEachern, 2011). The first section of the paper explores the concept of employee benefits, illustrating how the theory of consumer behavior can be used to explain decision-making regarding choosing flexible employee benefits. The second section of this article explains how the U.S cigarette makers managed to manipulate the concepts of market equilibrium and product elasticity to decrease bankruptcies brought about by penalties.
Key Words: Employee Benefits, Theory of Consumer Behavior, Cigarette Makers
Penalties, Elasticity, Demand, Supply, Market equilibrium
Employee Benefits
Providing benefits for employees is part and parcel of any organization culture that is aimed at reimbursing employees for their services to an organization (Wessels, 2000). Progressively, employees can opt for basic or optional benefit items ranging from medical and life insurance to retirement benefits. However, owing to the nature and relevance of the benefits, some employees may prefer to receive more wages than benefits, whereas, others prefer more benefits than wages. Employees who recognize the significance of the benefits offered tend to decide on benefits, and those who do not understand the benefits play it safe and select more wages. This inclination of decision-making may be explained through the theory of consumer behavior, which emphasizes the amalgamation of goods to create paramount unity and satisfaction for consumers (Blythe, 2008). In economics, consumer behavior refers to the study of the consumer decision-making processes. Economists are interested in finding out why, how, when and where consumers opt for some products and services over others in an attempt to influence their decisions.
The concepts of the theory of consumer behavior imply three facets of a consumer’s decision-making process including, utility maximization, associated costs, and preferences (Blythe, 2008). Just as the consumer, an employee is a rational individual who will invest their time in attaining products that provide the individual with the greatest amount of satisfaction. While consumers want to get the most for their money, an employee wants to receive the most for their services to an organization. In essence, the associated cost of the benefit offered will determine the choice for benefits over more wages. Employees behavior and consumer behavior is similar in that they tend to choose the most satisfying combination of benefits based on the partiality of the prices for the benefits. Conclusively, employees’ decision concerning benefits or salaries is, principally, determined by individual preferences. Employees will choose the option that satisfies their needs, both at present and in the future. However, this all draws back to employee comprehension of the benefits offered. Those who understand the hidden values of benefits may choose to receive benefits, as opposed to, more wages. Employees who choose more wages feel that more salary provides them the most satisfaction for their services to the organization.
Cigarette Makers Penalties
Over the last few years, U.S. cigarette manufacturers have been faced with plenty of lawsuits and damage penalties, which led to the loss of billions of dollars by companies (AllBuiness.Com, 2005). Additionally, economists suspected bankruptcy by cigarette manufacturers but recent information from the wall street journal suggest otherwise. U.S Cigarette manufacturers successfully managed to recover their financial losses through the increase of prices for their products. Essentially, they manufacturers use the concepts of demand, supply, elasticity, and market equilibrium to pull this off successfully. In economics, product demand refers to the amount of a product that consumers are willing to purchase. Supply, on the other hand, refers to the amount of a product that manufactures produce for their consumers in the market. Coupled with each other, demand and supply make up the market equilibrium concerning the utilization of a product in the market (Wessels, 2000). Lastly, product elasticity refers to a product’s reactivity to a change in price. At the outset, cigarette manufacturers are aware that, as products, cigarettes are highly inelastic owing to the addictive nature of the product. Put simply, no matter how much the price of the product increased or decreased, the demand for the product would remain the same. Cigarette manufacturers, therefore, increased the prices of cigarette to cut back on their losses. The demand for cigarette continued to soar even with the increased prices, which, in turn generated more income for the manufacturers.
References
Blythe, J. (2008). Consumer Behavior. USA: Cengage Learning EMEA.
“Cigarette Makers Protest Justice Department Penalties.” allbusiness.com. Retrieved from:
http://www.allbusiness.com/retail-trade/food-stores/4484441-1.html
McEachern, W. A. (2011). Economics: A Contemporary Introduction. USA: Cengage Learning.
Wessels, W. J. (2000). Economics. New York: Barron’s Educational Series.