Compensation Is a Core Function of Human Resource Essay Example

Compensation Is a Core Function of Human Resource Essay Compensation is a core function of human resource management, one that has important direct or indirect implications for recruitment, appraisal, training, retention, and labour relations. At the centre of competency, cost, and productivity issues in government, pay for performance is a key methodology in the compensation field and a central component of contemporary civil service reform. This technique is a fitting topic for the anniversary symposium. Most organizations, in fact, say they recognize merit, and most personnel believe that remuneration should be tied to contribution. Managers see pay for performance as a basis of control, and employees embrace its intuitive appeal. It is not surprising, then, that public and private organizations claim to give great deference to merit, the civil service system is even named for it. Yet substantial discontinuity exists between rhetoric and reality, as business scholars point out that performance pay â€Å"may not be as desirable, as easy to implement, or as widely used as commonly believed† (Fisher schoenfelt, Shaw, 2006, p. 512). But the Public service experts such as Jonathan Bruel, IBM Centre for Business of Government, likewise find that it is â€Å"complex and deceptively difficult, both technically and politically† (Mosquera, 2008, August 18). Indeed, the managerial discretion promised by contingency compensation confronts agency missions lacking in simple profit maximization metrics, personnel who may be motivated as much by public interest as private gain, and legal provisions against political manipulation of employees. It is by no means clear that the benefits of developing such systems outweigh the costs. We will write a custom essay sample on Compensation Is a Core Function of Human Resource specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Compensation Is a Core Function of Human Resource specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Compensation Is a Core Function of Human Resource specifically for you FOR ONLY $16.38 $13.9/page Hire Writer However, the concept of merit today is associated with commercial values and corporate-style performance pay. Although it takes many forms for most administrative, technical, and professional work, pay for performance typically seeks to use a portion of salary increases to award personal productivity. Seemingly consistent with well-known motivation theories and simple common sense, no one argues that people should not be paid for achievement incentive plans have grown in popularity in both the public and private sectors. It is the increasing diffusion of this approach to compensation that suggests the need for a re examination of merit pay for individual performance. This study assesses the practical experience, policy findings, and political realities of performance compensation in the federal government in contemporary history, followed by a discussion of its persistence. The analysis is informed by scholarly research, news media articles, government publications, and data from 15 unstructured, 30- to 50-minute telephone interviews in fall 2008. This small, diverse group of stakeholders offered insights into the promise, problems, and prospects of contingency compensation. Chosen on the basis of reputation and accessibility, it included representatives from news outlets, unions, nonprofits, consultancies public agencies, and academic. Practical Experience To summarize this section, pay clearly matters. But as experience demonstrates, it is difficult to link compensation policies to desired results; good intentions are not necessarily assumed in a political environment, and in any event are simply not enough. For example, President Barack Obama, while not rejecting the concept of contingency compensation, has indicated concern about troubled pay-for-performance systems and seeks to have a civil service bill that includes compensation reforms passed by the 2010 elections. For most agencies, it is a major administrative undertaking to implement performance pay, a task that includes the continuous re-evaluation of motivation and productivity, identification of additional levels of contribution that warrant recognition, and provision of incentives on an equitable and timely basis. As Bob Behn (2004) observes, who gets how much for what are insidiously complicated issues. Too good to be true, pay for performance might be â€Å"a wonderful theory . . . unfortunately details matter† (p. 2; also see U. S. Merit Systems Protection Board, 2006). Although that may not be a reason not to do it, dealing with performance compensation â€Å"is always unsatisfactory,† according to Mark Abramson (personal communication, December 2, 2008) of Leadership, Inc. ; not only is every agency’s situation different, but also the topic is complex and multifaceted. It is easy to see why, in light of the record, simpler, â€Å"set-it-and-forget-it† compensation programs historically have been widespread in the public and private spheres. Indeed, performance pay promoters— tellingly—have not sought to apply the technique to presidents, members of Congress, agency secretaries, or the uniformed services. Policy Findings Shortly this section, research findings demonstrate that to avoid crippling drawbacks, a set of strict policy prerequisites is needed to implement the methodology. Although organizations do not necessarily have to wait for perfect conditions, an honest assessment of their readiness and realistic understanding of pay-for-performance pitfalls is needed (Kerr, 2008). Even in favourable circumstances, incentive remuneration may not be successful because the detailed requirements are very demanding and often impractical. Metzenbaum (2006) reported that â€Å"an overwhelming body of research and experience suggests that promising rewards . . . seldom works when the rewards are linked to attainment of specific targets, progress relative to peers, progress relative to the past, or per unit of product† (p. ). Government agencies should use incentives sparingly and rely instead on â€Å"intrinsic motivators† such as goal setting and feedback. In fact, because those in public service have strong intrinsic motivations, there is reason to expect that a â€Å"market model may actually reduce performance† (Moynihan, 2008, p. 256). Politic al Reality It is difficult to overstate the attractiveness of pecuniary incentives in a political arena. When called into question by practical experience in the field and policy findings in research, stakeholders deny the undeniable and seize on performance pay as a solution to human resource problems. Success is not required, failure is overlooked, and new programs are inaugurated with little attention to agency histories or systematic studies. There are a lot of obstacles regarding performance and pay when we looked into the politic reality of certain country controlled by communism and dictators. The pay is based on revenue of a country not by the performance. Conclusion When unexamined cultural beliefs, well-meaning ideas, ideological goals, and political loyalty prevail, administrative values are overpowered and the ability to manage is thereby impaired. What accounts for the difficulty encountered by performance pay schemes is that the normative framework of contemporary civil service reform (one that takes an inaccurate, glorified view of corporate programs) is simply inappropriate for effective public human resource management (Bowman West, 2007; Riccucci Thompson, 2008). The distinction, stated differently, between pursuing objectives as a function of monetary exchange versus as a function of duty, between an obligation to personal gain versus public good, and between extrinsic versus intrinsic work motivation (Crenson, 1995, p. 90; Perry Hondeghem, 2008). The values of economic rationality inherent in performance pay systems, as David Dillman (2007, p. 892) observes, are inconsistent with the civil service ethos. In the end, government is a public service. The claim that â€Å"people tend to believe things they want to believe† offers a plausible explanation for why so many are so wrong for so long and seem unable to l earn from error. Some of the worst mistakes are not those that take people by surprise but rather those that were made with eyes wide open, a kind of â€Å"false consciousness† that dictates that what is preferred is inevitable. It follows that the more that performance compensation is discredited, the more that such testimony is ignored. Promoters convince themselves over and over again that the methodology will function properly. It is striking, for instance, how unaware some of its champions seem to be of criticisms levied against incentive pay. The legend dictates that no matter what empty, misguided pay-for-performance models should work.