Introduction
Compensation, employee benefits, and Information Systems (IS) are central elements that influence employee performance in numerous institutions. They define the nature of operations and productivity levels in institutions. Institutions that seek to leverage their performance and gain competitive advantages should adopt viable human resource administration techniques that foster fairness.
The practices should provide superior guidelines that facilitate a perfect match between work done and remuneration. Compensation and benefits entail the incentives that individuals are subjected to after work. Compensation means reimbursement benefits given to cater to the service rendered or professional input provided. Institutional managers are under obligation to set policies that facilitate the retention of employees who provide relevant support systems that aid operations and performance. Their retention is critical due to services that form the lifeblood of institutions.
Therefore, administrators must adopt conventional methods to address the plight of employees especially in the remuneration and working conditions. This is to limit employee turnover that may compromise operations in diverse business units thereby limiting performance. It is imperative to note that monetary compensation is a central element that motivates employee’s further effort in the production system.
Good incentives enhance their work morale and performance that leads to superior performance. Managers need to evaluate and understand employee needs to enable the development of credible mechanisms for addressing their concerns. According to researchers, institutions that provide exemplary rewards, for example, material or nonphysical incentives reports superior returns. They assert that fair treatment of employees and the adoption of modern information systems are fundamental elements in advancing competitiveness in the current business setting that is characterized by intense competition. This is a critical provision when considered comprehensively regarding information systems and other considerable frameworks.
Information System (IS) is crucial since it streamlines operations in institutions due to its relevance in coordinating activities. IS holds the capacity to boost efficiency and coordination between employees and the administration. This is essential since inferior engagement creates a conflict of interest that compromises performance. Ideally, fair compensation enhances an individual’s effectiveness, motivational value, provision of superior services, and financial satisfaction (Altman, 2000). These elements advance an individual’s psychological, social, and economic stability that is crucial in ensuring quality service delivery. Thus, this paper explores the relevance of compensation, benefits, and information system in institutions.
Behavioral Wage Theories: Need-fulfillment theory
As noted, compensation and work benefits entail physical and nonphysical incentives that are reimbursed to individuals for services rendered. The reimbursement procedure or payment system should take into consideration an individual’s duty to ensure fairness. It is a motivational system that recognizes an individual’s effort and contribution to service delivery. Various theories define the employee’s compensation procedure (Altman, 2000).
The theories present diverse guidelines that regulate the reimbursement process with the main aim to ensure fairness and output based remuneration system. This is crucial since the theories seek to eradicate unfair and discriminatory remuneration practices. In particular, need theory states that employees perform well if their needs are satisfied (Rolfe, 2007). It states that an individual’s performance is compromised in cases where their needs and expectations are not met.
The theory borrows Maslow’s hierarchy of needs that explains that individuals do not get satisfied or perform better when their physiological needs are not fulfilled. This explains the concept’s relevance, which demands administrators to establish the needs of employees.
This is to facilitate the development of sustainable compensation systems with the capacity of satisfying their wants. The evaluation process is crucial since it advances the identification of each employee’s compensation preferred criteria (Rolfe, 2007). This is fundamental since some employees prefer material incentives while others derive their satisfaction from recognition. Need theory is a credible human administration approach that sets clear guidelines to satisfy the psychological, economic, social, and mental needs of employees. This is to ensure that employees in institutions operate under optimal well-being to advance their performance.
Justice theory
Justice theory provides a systematic approach that defines (in legal terms) the adoption of fair working conditions. The justice theory is set to empower employees by enabling them to understand their rights and terms of working engagement. The theory states that there must be “fair pay for fair work done” by individuals (Oz, 2009). It disqualifies discrimination and unfair practices that compromise an individual’s functionality.
The system provides relevant incentives that seek to advance understanding of employee’s rights in terms of compensation, and benefits that they are entitled to in their workplace. Ezzeddine et al (2011) noted that the theory fights for economic equality and justice in the management of the employee remuneration system. It states that employees must be treated with dignity and that their compensation should be provided in a structured manner that satisfies their needs.
Consequently, the theory presents pertinent incentives that aid education to workers, advocates, and legal staff on the best strategies for the collection of unpaid benefits (Owens, 2006). This is to ensure that employees can successfully claim their paid wages from the institutions that are not keen on compensating their services. As stated, the theory empowers workers to exercise their rights to advance their financial situation. This is to ensure that their monetary stability is guaranteed due to the imperativeness of money in human life.
Expectancy Theory
Expectancy theory attempts to provide a pertinent explanation of relational satisfaction in terms of employee perceptions on the fair or unequal distribution of resources. Ideally, employees have certain expectations that appertain to compensation based on their judgment on the institution’s performance (Rolfe, 2007). The perceptions influence their behaviors and performance especially when their remuneration is not sufficient to meet all their demands.
The theory provides administrators with diverse information on the employee’s expectations at work. This is critical since employees develop diverse expectations that range from compensation, working conditions, and terms of engagement. These expectations define the employee’s output and should be addressed through systematic procedures (Jesper, 2007). This is to ensure the retention and motivation of employees to enhance growth.
Reinforcement Theory
The reinforcement theory states that an individual’s behavior is a function of their consequences. It also entails the actions of the administrators. Reinforcement systems in terms of working conditions and benefits influence an individual’s behavior. It also affects their performance and satisfactory nature that motivates their extra effort that translates to sound performance. As noted by Jesper (2007) individuals seek out and prefer to receive information that provides cognitive support for their actions. This is critical since recognition motivates individuals and satisfies their beliefs and cognitive thinking that enhances their working conditions. The theory emphasizes quality work and fair pay to employees as a reinforcement policy that is set to streamline operations in institutions (Ezzeddine, Hachicha & Bouri, 2011).
Impact of the Theories
The theories equip various stakeholders in institutions with relevant work-related guidelines. This aims at advancing performance. The theories present a credible system of operation that ensures fairness in service delivery (Owens, 2006). They compel employers to treat their employees with absolute dignity and develop a favorable compensation system that matches their input. That is the theories advocate for fair remuneration for a reasonable day’s work.
They seek to eliminate unwarranted practices that are tantamount to discrimination and violation of employee rights (Henry, 2012). In particular, justice theory empowers workers to ensure that their rights are delivered. The system is set to enable every stakeholder to understand and exercise their rights appropriately to facilitate sanity and exemplary performance.
According to Camerer (2003), employees have the right to be paid appropriately for their efforts while employers also have the privilege to receive the best from workers. The theories also seek to leverage performance in institutions by providing essential engagement mechanism that fosters understanding and designing of sustainable terms of work. This is achievable through the use of information systems that aid communication between individuals.
The system also enhances effectiveness and efficiency in service delivery in facilitating consumer satisfaction. As noted, the theories hold relevant capacities that enable employers to understand workers’ needs and amicable strategies to uplift their welfare (Camerer, 2003). This enhances employee retention that is crucial in advancing performance. It also ensures adequate recognition of employee’s efforts that contribute to their wellbeing.
How the theories might influence compensation policies
There are diverse factors that influence the development of effective employee’s reimbursement policies. The policies may vary as different institutions have set rules that guide their operations. The rules and performance levels may influence the compensation incentives that are given to the employees (Sharif, 2002). Variably, their daily input and general performance also influence the administrator’s decisions in designing their remuneration packages.
Indeed, employers should adopt modern approaches that are used in determining employee compensation. The approaches demand fairness and equality in the development of remuneration policies (Sharif, 2002). The approaches also emphasize the effectiveness and efficiency in service delivery by ensuring that the employees are motivated. According to researchers, various institutions have no structured systems of employee compensation. This has made most institutions discriminate against workers especially junior employees whose compensations are not duly paid as required.
Their terms of engagement also remain poor hence compromises their wellbeing. This has prompted various authorities to design well-structured guidelines to ensure that operations and communication between stakeholders in institutions are streamlined (Sharif, 2002). These guidelines are set to influence the development, of sustainable compensation and policies that are motivational.
This is to advance employee retention through the provision of satisfactory services that meets their needs. In particular, need theory seeks to advance the development of compensation policies that are socially relevant and economically viable. It seeks to enable administrators to understand employee needs and formulate policies that are motivational and hold the capacity to serve the psychological needs of individuals (Krivohlavy, 2012). The policies will also drive the economic and social needs of the employees with limited complications as a measure to ensure their optimal wellbeing.
Justice theory is set to influence policy formulation by ensuring that employers exercise fairness when compensating workers (Landskroner, 2001). The theory will also ensure that administrators adopt remuneration policies under equality guidelines to eradicate unwarranted discrimination. The theory seeks to facilitate the crafting of compensation and IS policies that are legally binding to the stakeholders to ensure that everyone delivers on their roles as indicated in the terms of the agreement. The expectation theory would enable the administrators to adjust compensation policies based on the employee’s expectations. This is to ensure that the development of the compensation policies takes into consideration the employee’s expectations and standards of preference (Landskroner, 2001).
These theories are vital since they hold relevance in streamlining the operations in diverse institutions to advance the performance level of employees and eliminate workers’ turnover. Therefore, institutions with strong aspirations to exemplary performance should adopt the major performance elements that are presented in the theories. The elements are essential since they aim at enhancing coordination between employers and employees to facilitate production (Stair & Reynolds, 2012). They are also relevant in enhancing employee satisfaction at work that is a motivational factor.
Conclusion
Indeed, compensation, benefits, and IS are integral elements that influence employees’ performance in diverse institutions. The elements require the adoption of favorable policies that are performance-oriented to advance the development of cordial relations between employees and their employers. This is fundamental since inferior remuneration policies hinder an individual’s performance levels. It affects their efficiency, moral aspect, financial satisfaction, and psychological stability that influence production capacity. As noted, individuals cannot lead an optimal lifestyle and move to higher levels unless they satisfy their current needs. This explains the imperativeness of the theories in facilitating the advancement of noble compensation policies in institutions.
References
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