Internal Memorandum
TO: Human Resource Team Leaders and Staff
FROM: Human Resource Manager
DATE:
SUBJECT: Employee Payment and Compensation
Recruiting new members of staff requires close analysis and proper examination of the organization and the environment in which it operates. When selecting 10 new members of staff for support positions in the organization it is important to identify the different features of each support position and how best to select a suitable candidate as well as the responsibilities that each recruit will be required to fulfill when performing their duties. Other than the needs of the recruits, it is also important to factor in the organization's position and ability to accommodate the needs of the employees as well as the policies and regulations that govern the environment in which it operates. Concerning the composition and creation of these new positions, my initial thoughts focus on the diverse mix of geographies nationalities gender ethnicity, and the functions of the new employees.
Since the recruitment practice will stretch across geographic and national boundaries the approach taken to hire recruits will have to factor in diversity and inclusion to ease the composition and creation of these new positions. Diversity will comprise of the similarities and differences that exist between the employees. It is important to factor in both visible differences like age and gender as well as those that may not be visible such as the recruits' values a style of thinking in-built belief and other factors (Derven, 2016). The inclusion will therefore focus on creating an ideal working environment that is respectful of each recruit's viewpoint and belief to encourage everyone to participate and perform their duties to the best of their abilities.
Pay practices for different organizations are expected to adhere to the laws and regulations of the region or country the organization operates in. To facilitate implementation I will use the balance sheet approach as it is best suited to address compensation management especially for an organization that has local international and virtual employees (Bonache & Oberty, 2016). The balance sheet approach will start by litter meaning the employee’s reference salary and then divide it into four categories of expenditure. The four categories will comprise housing taxes goods and services and savings. The approach helps to ensure that the amount paid to each employee is greatly dependent on the level of income and the size of the household (Bonache & Oberty, 2016). The approach is influenced by the notion that individuals that are more and live in a big household also tend to spend more and therefore require more income. The income is meant to serve needs like transport food clothing and entertainment and is, therefore, a good measure for determining the amount of income that an employee should get.
The balance sheet approach is also ideal as it allows HR to identify different needs for employees across geographic boundaries to develop hospital bill payment plans for all recruits. When employees are located in different countries the host country balance sheet approach will be most suitable especially in cases where the amount of payment given for certain positions tend to be higher in the country the employee resides in compared to the host country (Bonache & Oberty, 2016). In such a case the salary level for employees in the host country will act as the point of departure for the subsequent calculations. Rather than paying a fixed salary to all employees across geographic the organization will factor in the payment policies that exist in different countries and compare them against those that exist in the host country to come up with a more suitable payment plan.
Another approach that will be suitable for the recruitment process is the global balance sheet approach. The method is better suited for employees that travel between countries and therefore not held under the same policies and laws that determine the ideal payment practices for employees within their respective countries (Bonache & Oberty, 2016). Since the recruitment practice will also involve hiring virtual employees and other members of staff that will be required to travel from country to country doing business it may become difficult to identify which country the employee resides in to determine the appropriate compensation concerning the laws and regulations set by the country (Kennelly, 2015). The global balance sheet approach helps to create an international scale that will assist in setting allowances benefits and pay increase among other advantages that are neither influenced by the policies of the country in which the employee is located or the host organization. The organization will however ensure that the payment and compensation issued to give the employee enough purchasing power and income to maintain an ideal standard of living regardless of whether they are located in one specific country, have to travel from one country to another doing business, or are employed on a virtual basis where employment does not restrict them to a specific location especially with the advancement of the worldwide Web.
When determining global compensation the major challenge that the organization or human resource management faces has to do with the shareholders' expectations. While some various laws and policies determine the payment and compensation for employees, shareholders also have a say especially in an organization where they are more involved in the daily operations of the organization. Problems may occur if the shareholder’s expectations of the appropriate pay differ from what is legally expected of the organization from the laws of the region it seeks to serve (Derven, 2016). The problem can however be overcome by keeping shareholders informed and maintaining transparency throughout the processes. This will ensure that the shareholders are kept in the loop of the steps that will be taken and their expenses to help them get on board with the payment and compensation packages that will be given to the recruits.
Another challenge has to do with gaps in employee expectations of the ideal payment and compensation. Oftentimes the organization may disagree with the employees because the amount they expect to be paid is more than what the organization is willing to pay. The challenge is further intensified when employees fail to factor in benefits and other compensation packages as part of their net pay which makes it difficult for the organization to meet their expectations (Derven, 2016). Employees will therefore be provided with total compensation statements that elaborately communicate the value of the compensation package in its entirety. Keeping the employees informed of the benefits that the compensation and payments offer them will make it easier to differentiate between the net pay and other benefits that are issued through compensation packages.
Lastly determining global compensation is greatly affected by external competition. To be successful organizations have to be innovative and constantly improve the quality of their products and services. Since innovation comes from the employees, organizations face a lot of competition from other companies for employees with special skills and abilities (Bonache & Oberty, 2016). Payment and compensation will therefore have to factor in the payments and benefits that other organizations offer to their employees and then develop packages that will attract talented recruits and encourage them to choose the organization over its competitors.
The external competition presents both internal and external pressures for the organization. Internally the organization has to offer special packages and payments to employees to attract and retain talent. External pressures exist as the different organizations will continue to develop new strategies to attract the same talent. While this is a major challenge for the organization it is a problem that can be resolved through strategies that will cause little damage to the organizational budget. One approach will be the provision of lucrative vacation time offers, development of child care facilities, and extended leave for employees. The approaches are ideal in that they give employees time off the duties thus allowing them to take care of their responsibilities. Since the provisions only require the organization to extend the time in which the employee spends away from work the organization will lose little to no capital especially where other members of staff can carry on the responsibilities in the absence of a few.
References
Bonache J and Oberty C, (2016) “The traditional approach to compensating global mobility: Criticisms and alternatives” The International Journal of Human Resource Management, VOL. 28, NO. 1, 149–169 http://dx.doi.org/10.1080/09585192.2016.1239123
Derven M, (2016) “Diversity and inclusion are essential to a global virtual team’s success” Human Capital
Kennelly J, (2015) “Embracing the virtual workforce” The Workforce
