Discussion Replies: Shape of Future Compensation Professionals’ Work

Introduction

Factors that may affect future market compensation levels are the minimum wage increase, productivity gap in compensation, performance evaluations, pay transparency, and gender inequality. Several factors are crucial when estimating the wage of any profession. It is advisable to thoroughly analyze each issue and collaborate with the human resources department to develop and implement effective solutions. Although these issues may remain unresolved, various measures can mitigate their impact.

Increase of Minimum Wage

One potential factor influencing future professional compensation in the market is a potential increase in the minimum wage set by the government. The minimum wage is the legally mandated minimum compensation an employer must provide their employees. The significant increases in the minimum wage in the United States will impact the employment opportunities of low-skilled workers and pose challenges for some of them (Martocchio, 2020). Raising the minimum wage may adversely affect the economy for some individuals, as it could disrupt the balance of supply and demand. Increasing the minimum wage may result in a corresponding increase in the prices of products and services to compensate for the elevated labour expenses. Inflation reduces consumer purchasing power, leading to decreased demand for goods and services. This may result in workforce reductions. Some scholars contend that raising the minimum wage will adversely affect the entire economy of the United States (Martocchio, 2020, p.361). The issue at hand pertains to the minimum wage, which may not be intended to provide a livable income, yet may be the sole remuneration for which an individual is eligible.

The Compensation Productivity Gap

The compensation productivity gap is another factor that may affect compensation. Productivity growth may indicate an establishment's investment in information technology as well as capital machinery (Mishel & Bivens, 2021). Capital equipment encompasses laboratory equipment, fresh construction, and sales centres. Information technology utilizes expert databases to facilitate decision-making in various contexts. Higher productivity leads to increased investment promotion. This can result in more job opportunities.

Performance Appraisals

Performance appraisals are a factor that affects compensation. These assess an individual's performance, task completion, and overall development. Many organizations align their compensation techniques with employee performance. This can result in the gender pay gap, a subsequent concern. This is a persistent issue. Gender gaps vary significantly among countries (Morsey, 2020, p.12). This phenomenon affects both genders. This may result in increased pay transparency. Although an employee may receive instructions on how pay is determined, they may not immediately raise concerns about gender-based pay disparities. The other employee's employment duration may also be unknown to them. Gender does not necessarily determine an employee's salary. Martocchio (2020) suggests that the employee's exceptional performance and long tenure with the company may account for their success.

The Problem Created by The Compensation Productivity Gap

The issue which will create the most considerable uncertainty for compensation professionals is the compensation productivity gap. In most cases, there is a gap between the productivity of the employees and the compensation they get (Mishel & Bivens, 2021). This issue has proved to be so challenging for various compensation professionals. If employees feel that their compensation does not match their compensation, they may decide to quit the organization. Sometimes also, the compensation may be high compared to the productivity. This may be due to things like the minimum wage increase. Therefore, compensation professionals are faced with this issue and find it challenging to decide the best compensation for the employees.

Conclusion

In conclusion, it is suitable for compensation professionals to be able to take care of all these issues and make sure that they design fair compensations that will not negatively impact the company. The Bible in Psalm 106:3 says that people "who do righteousness all the time" are blessed (King James Bible, 1769, 2017, Psalm 106:3). Offering fair compensation is one of the ways to do the right thing. The right thing they do should also positively impact the organization.

 

 

References

King James Bible. (2017). King James Bible Online. (Original work published 1769).

Martocchio, J. J. (2020).  Strategic compensation: A human resource management approach (10th ed.). Pearson Education.

Mishel, L., & Bivens, J. (2021). The productivity-median compensation gap in the United States: the contribution of increased wage inequality and the role of policy choices.  International Productivity Monitor, (41), 61-97.

Morsey, H. (2020). Access to Finance-Mind the gender gap.  The Quarterly Review of Economics and Finance, 78, 12-21.