Compensation systems for executives in different cultural context

Table of contents

Compensation ashes, its functions

1. General concept of system

Thus, the subject of this bunk is compensation system. All methods of stimulation use in the organization are part of the reward system. The system includes rewards that the organization can offer to an employee in exchange for his work for the benefit of the organization. With the rewards managers can influence behavior of employees, make them actuate in some specific way or act out tasks. However, some authors (e.g. Shapiro and Henderson) divide rewards into compensation and non-compensation. Compensation fraction is understood as material benefits (profits, etc.), while non-compensation part - the impalpable rewards, praise, encouragement, positive effect on self-esteem, etc.

Next I would like to elaborate on the material part of remuneration, i.e. on a compensation system of the organization. It is based on tierce comp wizardnts:

• Basic part. This includes the basic wage rate, which is determined by each organization depending on its inbred characteristics and rules, reigning in the macro environment (industry, country)

• Variable part. It includes various bonuses, allowances, which provide main(prenominal) stimulation functions.

• The social package, which is organise on the basis of organizational social policy.

First of all compensation system is the main way to have an impact on staff pauperism and as a consequence on the performance of their work. In addition, compensation is also intended to achieve several valuable goals (Shekshnia, 2002):

• Involving staff in the organization. One of the main principles for employee while choosing between organizations is a analogy of compensation systems in different companies. Considering that nowadays wealth is one of the main resources, which are necessary for ensuring human life, every employee tends to mother a place of employment, where compensation policies will meet their needs.

• Retaining employees in the organization. Remuneration in the organization...

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