An Overview of HR The Impact of Compensation

Meiyu Fang, Ph.D. Assistant Professor Institute of Human Resource Management National Central University, Taiwan
85

HR Compensation

Human Resources Management in Hospitality & Tourism

Prof. Syamsir Abduh

NOVITA DEWI NURAINI BATCH 6 1263620039

Introduction
Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.

HRM is the management of an oganizations

workforce, or human resources. Its responsible for the attraction, selection, training, assessment and rewarding of employees, while also overseeing organizational leadership and culture and ensuring compliance with employment and labor laws.

Introduction
Strategic human resource management is the involvement in designing and implementing a set of internally consistent policies and practices, which aim to accomplish its business objective Compensation also includes payments such asbonuses, profit sharing, overtime pay, recognition rewards and checks, and sales commission. Compensation can also include nonmonetary perkssuch as a company-paid car, stock options in certain instances, company-paid housing, and other non-monetary, but taxable, income items..

Introduction
Porter (1985) suggested that human resource management (HRM) helps a firm obtain competitive advantage by lowering costs, by increasing sources of product and service differentiation, or by both .
Youndt, Snell, Dean, & Lepak's (1996) found that administrative HR systems (i.e., control HR in Authur's terms) are appropriate in the contexts that emphasize reducing costs and eliminating uncontrollable behavior

Snell and Dean (1992) found that the use of advanced manufacturing technology and Business, compensation strategy, and firm performance, p. 4 total quality management were positively related to selective staffing, comprehensive training, developmental appraisal, and externally equitable rewards

Lengnick-Hall & Lengnick-Hall (1988) argued that the integration of human resource management and corporate strategies can provide a broader range of solutions for solving complex organizational problems, and it can ensures that human, financial, and technological resources receive equal amount of consideration in setting goals and assessing the capabilities of implementation.

Jackson, & Schuler, 1997; Gerhart & Milkovich, 1992; Gomez-Mejia & Balkin, 1992). Due to the high investment and high return, firms in the high-tech industry may have a bigger incentive than traditional manufacturers to provide rewards commensurate with those of competitor firms

Literature Review
The compensation measures were modified from the compensation strategy patterns proposed by Gomez-Mejia and Balkin (1992). The scale includes the pay level, the emphasis of pay for performance, and the profit sharing. All items use five-point Likert format. The pay level scale, consisted of two items, asks the hr managers to compare their pay level with that of their competitors

Literature Review
One of the challenges facing firms in todays business environment is the transformation to a new paradigm (Drucker, 1990). A lot of evidence suggests that the failure of some firms to make this transition is due to the mismanagement of people rather than to problems with technical systems (Ettlie, 1988; Majchrzak, 1988).
Lengnick-Hall & Lengnick-Hall (1988) argued that the integration of human resource management and corporate strategies can provide a broader range of solutions for solving complex organizational problems, and it can ensures that human, financial, and technological resources receive equal amount of consideration in setting goals and assessing the capabilities of implementation.

Literature Review
1. Many researchers (Balkin & GomezMejia, 1987; Begin, 1993; Gomez-Mejia & Balkin, 1992; Schuler & Jackson, 1987) attempted to show how a number of HR practices are consistent with different strategic positions and how these practices relate to firm performance. 2. Strategic human resource management is the involvement in designing and implementing a set of internally consistent policies and practices, which aim to accomplish its business objective (Jackson & Schuler, 1995 )

Literature Review
3. MacDuffie (1995) derived specific configurations, or bundles. of HR practices that enhance firm performance. Ichniowski, Shaw, and Prennushi attempted to test the hypothesis that combinations of HRM practices have bigger effects on productivity than the sum of the component effects due to individual practices (1994:9)

Conclusions
It is usually believed that higher pay level will attract better talents, and as results of their better performance, the organizational will have a better performance. This rationale can easily explain why the pay level is positively associated with the Business, compensation strategy, and firm performance, p. 18 perceived-organizational performance in the present study. However, the presnt study did not find the link between pay level and ROA. The present study also found that pay for performance was negatively associated with both subjective performance measure and ROA. The findings are contradictory to what most of the motivation literature of pay for performance would claim. Cognitive evaluation theory (Ryan, Mims, and Koestner, 1983; Deci & Ryan, 1985) might offer some possible explanations. According to CET, the influence of pay for performance on intrinsic motivation is a function of two reward aspects. First, rewards have a controlling aspect. The controlling aspect would lead to a decrease in performance. On the other hand, the informational aspect can actually increase intrinsic motivation, and thus increase performance.

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