Anonymous asked in Business & FinanceCareers & Employment · 1 decade ago

What is the impact of compensation and benefits on organization effectivenes?

2 Answers

  • 1 decade ago
    Favorite Answer

    The more amount spent on compensation and benefits, the less profit a company makes. The less profit they make, the less money they have to spend on expansion or development. However, having less compensation and benefits also means the company runs the risk of loosing employees. Loosing employees means loosing the knowledge and skills they had. Retraining employees costs money also. New employees can take a year or more to start returning value to a company (which is not the case in lower pay situations).

    In my case, I had been working with a company for more than 3 years in which I doubled department productivity, reduced training and start up costs, and helped smooth over rocky client relations. In return, they offered no retirement, minimal health benefits, and severely underpaid me according to averages for my position. Needless to say, I will soon be working for a company who will be paying me the amount over average that I was being underpaid, they have top health insurance, retirement, supply lunch, and many other benefits. In return, they will, I'm sure, see the same results or better from me, retain me as an employee longer, and gain a competative advantage.

    When the market is a employers market, they can get by with paying less, but when the tide turns, as it is now for my field, they had better adjust. My old company will probably need 3 or more months to replace me. This means they will now be understaffed, and run the risk of loosing employees. Then, it will take a minimum of 3 more months for them to train the replacement, which means a current employee will have to, at least in part, stop what they are doing to accomplish this. By the time it's all said and done, they will have had to pay more than my yearly salary just to cope with the loss. Had they kept my wages competitive, it would have cost them far less over the next 5 years or so.

  • daum
    Lv 4
    3 years ago

    A) Its a great effect , if the worker isn't paid nicely, and equivalent to the industry cost he/she would be able to no longer sense inspired to paintings,, he will do in basic terms the activity that's necessary to be accomplished no extra beneficial than this and he won't care approximately his purchasers or colleagues he will paintings like a robotic no innovation of any form. Beside he will sense miserably underpaid and depressed. B) Having pronounced the above the worker will shop on sorting out for a extra constructive risk, and on each occasion such risk exist he will go away without be apologetic approximately,, and so because of the fact the different workers and the effect would be intense turnover,,, the element that fee the businesses huge quantity of losses, in case you wanna hear extra digital mail me..

Still have questions? Get your answers by asking now.