Week 1 Discussion

Strategic Compensation and Human Resources

In previous centuries, leaders were only concerned with the bottom line and pro�t margins for their organizations. Employees were merely a necessity to accomplish the organization’s objective, and the employees’ welfare or retention was not a factor in the day-to-day operations of the organization. With an increase in technology, virtual of�ces, outsourcing, and other industry-speci�c changes, leaders began to recognize the importance of maintaining a competitive advantage. Leaders realized that an adjustment had to be made in the compensation structure if the organization intended to retain the most quali�ed employees. This new way of thinking began in the early 1980s. The torch has been passed on to the human resource (HR) department. To understand compensation, one must realize that it is based on multiple factors. While intrinsic and extrinsic rewards are merely a fragment of the core compensation plan, it is important for HR professionals to know what is required to motivate employees. Intrinsic rewards are geared toward the individual’s psychological state, while extrinsic rewards are given in the form of monetary and nonmonetary rewards. It is important to understand that the compensation strategy is tied to the competitive business strategy. Thus, the responsibility of acquiring and retaining the most quali�ed employees has been assigned to HR professionals, and they must have vast knowledge of the organizational objectives, business necessities, and strategies in order to hire the most promising employees, while providing the employees with a competitive compensation plan.

How Is Compensation Determined? Review each icon to learn more.

Additional Materials

From your course textbook, Strategic Compensation: A Human Resource Management Approach, read the following chapter:

Strategic Compensation

From the South University Online Library, read the following articles:

The Impact of Compensation and Promotional Opportunities on Employee Retention in Academic Institutions: The Moderating Role of Work Environment (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=bth&AN=125083531&site=eds-live)

Goal Commitment (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=bth&AN=43595890&site=eds-live)

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