Compensation is the most important aspect
in the organization. Employer should manage employees pay carefully because is
related to employees monthly income. Thas what they working for. Usually, in
managing compensation, manager facing a lot of difficulties such as the money
might be insufficient or employee received wrong amount of pay. All these administrative
of compensation takes a lot of cost. Thus, compensation system help employer
plan and manage employees pay automatically without problem.
Some of the basic compensation includes basic
and merit pay, short-term and long-term incentives, prequisites, recognition
awards or retention or attrection awards. As we can see, all of them are
important and surely must be coordinated perfectly.
Implication
Compensation system help manager in
planning employee annual compensation. For example, data that manager get from
the employees’ performance and wages can provide a standard report like “Annual
Compensation Report”. It shows that, how much money spent by the company on the
employee which include the basic pay, bonuses, allowence and other incentive
pay. Jonathan Lister (2012) stated that a stratey plaan for employee
compensation and benefit determine how much an organization want to pay their
employee and what type of employees that organization want to attract. Having
more employee with high qualification will lead to high productivity in the
organization
.
Advantages and Disadvantages
Web based compensation have its own
advantages. Manager can perform salary-planning function much easier rather
than traditional paper based compensation and planning. Some company provide
information related to compensation and planning. Thus, employee can
self-service in find out what the rage of pay for any job provided. Despite
that, diasadcantge for this system is in managing data of compensation. For
example, in calculate employees pay and making any changes, employer might
confuse and jump into bad decision. Thus, the system must be provide with the
use of frozen or static database to ensure everyone is using the same data and
information.
As conclusion, not all changes data in
compensation can be made by the employee. Despite that, a strategy plan for
compensation play a large role in attracting competent employees. In dealing
with compensation information, the system must attched with the full of high
security and safety. For example, in changing the amount of pay because of
employee have been promoted, only senior manager or responsible party can make
the changes in order to have a accurate and match between pay and position.
References:
Michael J.
Kavanagh, Mohan Thite and Richard D. Johnson (2011) Human Resource
Information
Systems: Basics, Applications, and Future Directions. SAGE Publications.