Fair and Equitable Compensation

MGMT 365
04/01/2012

MGMT 365
04/01/2012
Fair and Equitable Compensation Compensation is an important factor in the business world; both for employees and employers. Employees are trying to get what they feel they are worth. On the other side employers are trying to get quality workers at the best price they can; this is so they can increase their bottom line. Depending on which side you are on, the views of what is fair and equitable varies. The key is to come to an agreement that both can be happy with. The book Strategic Compensation by Martocchio, states “compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs” (P3). Intrinsic represents
An employer has to be able to adjust pay especially in economic hardship. There are different ways that the two sides can come together and work out a plan. Human resources play a big part in this process. They should have certain things set in place to help navigate them through the process. One way that both sides can come to an agreement on what would be considered fair is to have a merit pay system set in place. The Department of Labor states, “Merit pay, also known as pay-for-performance, is defined as a raise in pay based on a set of criteria set by the employer”(dol.gov). By having this type of system an employee is granted the ability to increase their pay by the work they performed. When you base pay on performance it creates drive in the employees. They know that if they want to get a head then they have to produce the work. I feel that this is the most fair and equitable way to determine compensation. Compensation is a big deal and one that should not be handled lightly. Companies should make sure that they have highly trained personal set in place that can handle the situation. If not handle correctly then both sides of the table can suffer. Everyone in the end just wants to be treated fairly and have a sense of worth. The key is to find the correct balance where both sides win, actually accomplishing this is the tricky part.

Work Cited
Lane, June B. "5 Tips for Fair Employee Compensation." Www.asaecenter.org. May 2011. Web. 28 Mar. 2012.