Today, compensation use technology to automated
payroll process and actually compensation is one of the earliest areas that
automated in HR. Compensation that use technology (web-based) are much more
value and more helping the organization in compensation process.
In this topic, first thing I learn is about the components
of online compensation system. The components are fixed compensation, variable
compensation and also stock – some benefit. The fixed compensations such as
bonuses, pay wage, merit pay or cost of living and the equity adjustments.
Individual and group incentives plan, profit sharing plan and productivity gain
sharing program are the points in the variable compensation. For the stock are
all about the benefit in restricted stock, stock plan purchasing, phantom stock
plan, stock in grant and appreciation right and the last one is stock options.
Organization
using this online compensation because there have the advantages that can give
value to the organization to well performing. The advantages using this system,
are it ability to create a report and presentations, its allow business to
streamline in administration compensation and benefit of employee. It also
enables end users to changing demands. Other than that it also can improve
effectiveness because of it simply process and without the third party, the
manager and employee can access the useful information. Furthermore, this
compensation system can streamline the salary planning process so its can
reducing time and costs. For example, Dell was able to reduce time spent about
65 percent on salary planning process.
This compensation system has their subsystem. The
subsystem called online benefits subsystem (e-benefit). Benefits are a growing
and expensive component of every employee’s total compensation. This e-benefit
uses to communicate information on benefits to employees and allows them to
elect and manage their benefits online. Organization like to use it because its
can reduce costs for delivering benefits and streamlining the administration.
For the employee, it can improve and help them to access to benefit information
and also can empowering them to manage their own benefits. For example, if
employees want to know about the benefit information that he/she get in this
year so he/she just go through the website to get the information. Use lesser
time and simple movement.
When using this online compensation and benefit, its
give the bigger implications for the management. It’s give impact like not leave the HR
Department untouched. For example, by using this system HR department like
always keep in touch with their employee, keep on updating information about
the compensation and benefit so the employee simply get the information. Using
this system also shows that the line management and employee are actively
implement the strategies, policies and practices.
References
Cascio,
Wayne F. 2003. Managing Human Resources,
Productivity, Quality of Work Life, Profit (6th ed.):
McGraw-Hill Higher Education.
Michael
J. Kavanagh, Mohan Thite, Richard D. Johnson. 2012. Human Resource Information Systems: Basics, Applications, and
Future Directions (2nd ed.): SAGE Publications,
Inc.
Wendell
L. French. 2007. Human Resource
Management (6th ed): Houghton Mifflin Company
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