Ethics

Executive summary
A number of compensation strategies which could be adopted in the concerned organization do exist. Diverse compensation strategies always need to be used by organizations human resource management department in order to ensure that employees are constantly motivated to work. The need to pay the employees competitively and ensure that the organization retains the most competitive, competent, highly motivated and productive employees is very crucial. The usage of salaries, commission based payment, bonuses, payment based on the hourly rate, compensation based on a price rate, and the total compensation strategy are all very relevant to this organization. Even though all the methods of compensation have their downfalls, it is evident that for my Food and Drinks Manufacturing Company, a few methods could address the compensation needs of the HRM department.

Skills of the employees, the organizational mission and vision and the industrys competitors are the key factors which determine the compensation strategy to be adopted in an organization (Joshi 2009, pp. 34-234). Employers always ought to consult all organizational departments and relevant industry players before settling on a single strategy for compensation. Unlike the usage of salary payment which is commonly used in most organization, most compensation strategies such as piece rate, commission based, and hourly rate are complex to implement and do not fully the diverse employee categories in an organization (Bebchuk, and Yaniv 2005, pp. 87-217). A combination of both salary and the piece rate compensation strategies into one (Salary-Piece rate) strategy is the most reliable, flexible, cost effective compensation strategy even though it has its own shortcomings when applied to our Food and Drinks Manufacturing Company.

Introduction
Employees in different organizations, both profit and the non profit organizations, are normally compensated based on diverse compensation strategies. The strategy utilized in compensating the efforts, skills, time, and other forms of employee investment into the organization are normally determined by the organizations top level management. This report therefore sets out to evaluate the different available strategies of compensation which could be adopted in my organization and offer appropriate recommendations. The level in which an individual is at in the organizational structure could be used to determine the amount one would be paid for their roles and responsibilities. Sean (2008, pp. 3-5) believes that different compensation strategies have their own intended goals. The vision and mission of an organization, to a greater extent, guides the management in determining the strategies to be utilized in compensating the employees.

According to Smith (1995, pp. 79-161), the benefits and compensation strategy chosen sets the organizations position in the job market. As the assistant HRM in this organization in which the benefits and compensation manager is indeed a crucial and very powerful person with the right veto it is evident that a lot of avenues could be exploited in order to ensure that the most appropriate , efficient, and cost effective strategy of compensation is adopted (Schaeffer 2007). To attain this goal, comparison and contrasting of the various strategies shall be done in order to determine the appropriateness of each strategy in my organization which has a total of one hundred and twenty (120) employees. Most of the employees in this profit making organization are on different terms of service.

Compensation Strategies Information Gathering and Analysis
In this manufacturing organization, a number of compensation strategies which could be adopted do exist. To begin with, the compensation based on salary scheme could be one of the strategies which could be adopted for employee compensation in my organization. In this instance, employees are paid predetermined fixed amounts every month. This strategy is most appropriate for use in circumstances where the job design and the number of working hours are relatively fixed (Smit 2006, pp. 92-311). Less administrative costs are normally incurred in the management of this compensation strategy due to its straight forward methodology. Job security is a very key consideration factor for most employees. Rarely would competent personnel prefer to work under a lot of uncertainty regarding their jobs. As a human resource management (HR) employee in this organization, there is need to constantly motivate the workforce in order to enhance high efficiency, effectiveness, and high productivity. Compensation by salary, though preferred by most employees and employees, would not help to enhance innovation and determination among the employees. This strategy would not best fit into the vision and mission of this organization in such a competitive business environment.

The second strategy which could be adopted for use in this organization is payment based on the hourly rate. According to the International Monetary Fund (IMF) report on the usage of money in managing employee needs, the strategy of hourly rate of compensation of employees is described as being very fair since no hours of work goes unrewarded. Performance of employees working under this compensation strategy is normally higher than that under the salaried scheme of compensation (Sean 2008, pp. 3-5). However, the problem of job insecurity is closely associated with the hourly rates of compensation. This strategy would best suit the compensation of the casual and temporary employees in my organization due to its flexibility. In this organization, employees whose labor and skills are only on demand in certain periods of time would best be compensated using this strategy.

The third payment strategy is compensation based on a piece rate. According to monetary and human resource expertise, this strategy implies that the organization only pays its employees based on the actual task performed and completed (DeCieri and Kramar 2008, pp. 39-178). As a manufacturing company, it is very clear that there are seasonal products who demand normally change based on other environment factors and the season of the year. Compensation using the piece rate strategy would that help to ensure that the company does not incur loses during the season when the demand for certain products is extremely low. Low seasons would thus imply that employees are accorded less work and hence less pay. According to Joshi (2009, pp. 34-234), under this compensation strategy, it would be very complicated and hard for such an organization to attract competent, skilled, and committed employees since the employees have the fear of losing their pay should the demand for certain manufactured products decline. Additionally, the piece rate compensation strategy has the disadvantage of costing more money to administrate compared to compensation using hourly rates and the salary scheme (Smit 2006, pp. 192-311).

Since the salary, piece rate, and the hourly compensation strategy seem not to be efficient and effective when used independently, the compensation strategy based on a combined piece rate and salary scheme would be important. Food and Drinks manufacturing company demand very great ethical standards, timely and very cost effective manufacturing procedures. To attain these measures and remain competitive in the market, the most skilled employees ought to be recruited and maintained in the organization. Sean (2008) insists that while compensation by salary would provide the employees with job security, the piece-rate compensation would motivate them to invest more energy, time, and dedication in their duties while at the same time being innovative. Smith (1995, pp. 79-161) states that in such an organization, a combination of this strategy would therefore ensure that high standard creativity and competence is enhanced. While this strategy, like the pure hourly rate, encourages employees to invest extra effort in performing their duties and hence higher productivity, it also benefit from the fact that workers would always be assured of pay even in times when the manufactured products have a relatively low demand and which implies a low rate of return to the company (Rogovsky and Schuler 2007, pp. 67-159). Due to the need for the organization minimize on the current operational costs, this method, if adopted, would ensure that the administrative costs of remunerations and other forms of employee compensation is drastically reduced especially when there is a combination of the two schemes of compensation (Yoram and Alon 2007, pp. 31-89).

Additionally, bonus based compensation strategy could be adopted in the organization. Payment of bonuses to the employees would utilize a set criteria based on the rate of return in the production process. For the top management in the organization, the bonus criteria could be based on their level of productivity and the success of the decisions and strategies they put in place. Schaeffer (2007, pp. 11-54) with the fact that while performance bonuses could be used for reward of better performance, it could also be used as a means of retaining employees. The adoption of bonus based compensation would hinder the overall performance since bonuses are very discretionary and not performance based. Moreover, bonus payment method could yield unhealthy completion among the manufacturing company employees and departments.

Commission based payment strategy would also be used in determining the amount of money to pay the employees. Retention fee should be set based on each category and level of employee working with commission.  HYPERLINK httpen.wikipedia.orgwikiArthur_O27_Sullivan o Arthur O Sullivan  Smith (1995, pp.79-161) insist that employee compensation which is based on commission should always be restricted to some departments in an organization and the selection of such departments should be done through critical analysis. Personnel in the sales departments should be compensated on commission but at the same time ensuring that the retention fee is good enough to enable them cater for their individual needs. This method is vital since it would encourage the concerned employees to be more determined and to constantly work towards making greater sales. Minimization of the base pay and increase of the incentives is thus done in order to ensure high performance from the employees is realized. Under this strategy, performance based compensation is encourage while status based reward method is thus discourage.

In addition to the above discussed compensation strategy, the usage of the strategy where employees are competitively paid compared to the trend in the current market is important. Paying competitively would ensure that the organization retain very competent workers with the correct skills and experience. Based on the argument of DeCieri, Kramar (2008, pp. 39-178), the production levels and standards would therefore improve due to the fact that the employees are made aware of the fact that the high remuneration offered to them is in exchange with the high quality services expected from them. Like payment which is purely based on monthly salary, employees are assured of their job should they meet the set goals and set standards of the job design.

Alternatively, the total compensation strategy could also be adopted in my organization. The total compensation strategy demands that its five components which include a base salary, an annual incentive plan, incentive plan for long term basis, perquisites, and bonus payments where applicable, be paid.  According to Bebchuk, Yaniv (2005, pp. 87-217), the long-term plans for incentives would include, diverse cash plans and offering stock acquisition options to the employees based on the performance of the stock. Unlike other payment strategies discussed above, the total compensation strategy addresses both the long-term and the short term needs of the employee. The strategy, according to Smith (1995, pp. 79-161) is however very complicated and may even not be relevant to other quarters of the organizational. The cost of implementing such a strategy is very high due to many accounting, auditing, legibility, and ethical issues that need to be addressed in order for the strategy to be affected. For instance the perquisite component of the modem entails usage of company cars, annual physicals, employment contracts, and even unique retirement plans. This strategy is biased and only tends to favour the top level management employees (Yoram and Alon 2007, pp. 31-89).

A number of considerations always ought to be done before a given compensation strategy is adopted by any form organization. Rogovsky, Schuler (2007, pp. 67-159), argues that the factors  which need to be considered include the organizational vision and mission, the competency levels of the employees, the overall operating costs and the internal rate of return, environmental competition, and the market compensation rates, among others (Jones 1981, 78-174). It is evident that the organizational size, the performance standards set in the organization, the reality of the job market, the vision and mission of the organization, skills of the employees, and the market competition and demand for certain skills would help to determine the compensation strategy adopted by an organization.

Additionally, the occupation, place of stay, physical body challenges, and other disabilities could be used to determine the amount of money that employees should be offered for the services rendered to the company (Lundy 1994, pp. 687-720). To encourage the physically challenged employees to work in the current working environment, remuneration could be done with ones physical challenges. Individuals with incapacities could be provided with special working tools, customized environment, and well compensated remuneration to cater for their special needs both within and outside the organizations working environment. Lundy (1994, pp. 687-720) also believes that there is always the need for the gender, race, and the age of employees to be used in order to make all individuals to feel more appreciated.

Recommendations to the Management
As a member of the organizations HRM department, I acknowledge the fact that even though different compensation strategies do exist, some are more appropriate to this organization than others. Based on the discussion and the operational nature of my organization, I recommend the use of the salary-piece rate compensation strategy. In line with Harolds argument, this compensation strategy would be enhancing flexibility and reliability of other issues related compensation of both the permanent and the temporary employees. Since, some skills in an organization are more vital and very central to the organizational this recommended compensation strategy would help to motivate employees to work better due to the understanding that their skills and hard work would adequately be compensated.
Engineers in this organization, for instance, who play a very central role in ensuring that the actual technical aspects of food and drinks production process would, based on this strategy, be compensated more.  As a HRM department employee in this organization, I would champion the setting up of this compensation strategy due to its considerable approach to the unique skills of employee. I therefore recommend the use of the strategy, Salary-Piece rate compensation, since it is indeed the most relevant and appropriate to this organization. Technical employees such as the company engineers and the auditors, whose skills are very rare in the market, should be offered high compensation compared to employees with more soft skills and the casual employees. This would help in ensuring that we retain employees with the scarce skills in the market.

Conclusion
An in-depth analysis of all relevant factors always needs to be done before a compensation strategy to be used in an organization is arrived at. The HRM managers always need to strike a balance of the level of employee dedication to efficiency, effectiveness, teamwork, and organizations profitability. While employee compensation should always be done based on a predetermined scale and relative factor contribution, the market compensation rate can never be ignored (Bebchuk and Yaniv 2005, pp. 87-217). Though payment through commission, bonuses, wages, and total compensation strategy, pure salary based, and hourly rate are relevant in diverse ways, the usage of a combined salary and piece rate method is much fair an relevant to all levels of my organization. The strategy is flexible and cost effective to administer. The choice of the salary-piece rate method is based on the fact that though not the cheapest method to implement, the method can very successfully be applied at all levels of my organization, a Food and Drinks Company. The usage of this compensation strategy thus ensures that both skilled and non skilled, permanent and temporary employees are fully catered for. The long term benefits of this strategy to the organization far much overweighs the short term benefits that are associated with other compensation strategies.