Compensating for Commitment

This weekend (Friday and Saturday) I go back to class for another HR module. It’s called Building Employee Commitment. It’s a three day module (Friday, Saturday, Friday again in 2 weeks) on Compensation.

There’s a bunch of reading (a few hundred pages). And remember that reading for college isn’t normal reading…it’s textbook reading. Thankfully this textbook is above average on the level of making it interesting and it’s not horrible slogging through it, though I’m currently not done with all the reading for tomorrow’s class.

Compensation, by the way, it more than the cash that is paid to an employee in the form of salary and bonus. There are tons of intangibles and soft benefits given in addition to taxable and non-taxable fringe benefits. Employees get a charge out of their job or the mission of an organization, and that compensates them for their work as an emotional benefit. It includes the level of work/life balance that is encouraged and allowed by the work required.

The big thrust of the text I’m reading is having a compensation strategy. Compensation is a part of competing for people in the workforce, and that competition requires differentiation and seeking a competitive advantage.

So we’ll be talking about job based compensation structure (nature of the job) vs. person based structure (the skills of the individual) of compensation. And how to align compensation strategy with the objectives and strategy of the organization. Structure needs to be internally aligned and training and turnover costs need to be considered.

It’s not as simple as “market price” for a particular position.

One of the examples in the book was a comparison of the compensation strategy of Microsoft vs. SAS (another smaller software company). Both have relatively low turnover and high employee satisfaction. Microsoft, though, focuses at high compensation and incentives whereas SAS has a huge corporate focus on family and work/life balance. SAS has a high degree of transparency in compensation. Microsoft does not.

I think I’ll have more to write (when I’m done with the reading and having had some time to absorb) but this class is going to be interesting for me and maybe even a little fun. Not the core of my job, nor am I thinking about starting a career somewhere in HR as an expertise, but I’m going to be glad for the knowledge and the new thought processes I’m gaining.

One key point in compensation strategy is that there isn’t a one-size-fits-all best practice that will work everywhere. Research everywhere (when done) has been inconclusive on so much. Management of compensation and driving employee commitment is different from one place to another, and how Samaritan Ministries will handle compensation strategy is very different from how it’ll get handled someplace else. Culture, mission, core values and long-term strategy all affect how you do compensation, and sometimes strategy needs to change because of internal and external forces.

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