Question

Discuss the adjustments to core compensation a company may choose to provide for its employees. What are some pros and cons to each?

Answer 1

Employee compensation vary from organization to organization as each organizational structure determine which compensation best suits it's environment. These adjustments to core compensation lead to have a good strategy to improve employee productivity. Some of the core compensation are base pay, bonuses, merit pay, commission, different allowances and benefits, etc.

Pros and cons to some compensation -

Salary -

Pros -

1. Employers don't have to pay for overtime.
2. Employers may make employees work more with the same salary.

Cons -

1. Employers may need to provide extra compensation so to make the job position looks more appealing.
2. Extra compensation such as health insurance, vacation, flexibility in working hours, etc. needs extra costs.

Bonus -

Pros -

1. This compensation may motivate employees than salary.
2. It would also increase employee loyalty and increase organizational productivity.

Cons -

1. Sometimes employers may not be able to decide who to give the bonus amount.
2. Employees might take bonuses as taken for granted.

Hope this helps :)

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