Compensation and Benefits We can use several pay-for-performance strategies

Compensation and Benefits

We can use several
pay-for-performance strategies to motivate our employees. A pay-for-performance
strategy means that employees are rewarded for meeting preset objectives within
the organization. For example, in a merit-based pay system, the employee is
rewarded for meeting or exceeding performance during a given time period.
Rather than a set pay increase every year, the increase is based on
performance. Some organizations offer bonuses to employees for meeting
objectives, while some organizations offer team incentive pay if a team
achieves a specific, predetermined outcome. International Journal of Economics,
Commerce and Management, United Kingdom Licensed under Creative Common Page 7
HRM practices can help organizations raise the level of organizational
citizenship behaviors (OCBs) among employees. Employees who participate in
decision-making feel that their managers consider them to be important members
within the organization. With such a positive outlook towards both the
management and the organization as a whole, the employee would be more willing
to take on extra roles, thus increasing the likelihood of OCBs (Bateman and
Organ, 1983; Miles et al., 2002; Smith et al., 1983). Organizations may also
facilitate citizenship by rewarding OCBs (Babaei et al., 2012). A reward system
that directly recognizes good citizenship makes it clear to employees that the organization
truly values such behavior (Levering and Moskowitz, 2003; Meet Asda’s Happy
Family Pack, 2002).

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Retention

In line with the systems view
of HR (Lado & Wilson, 1994), firm performance serves as a final outcome of
an effective HR system. As an indicator of firm performance, employee retention
is a systematic effort by employers to create and foster an environment that
encourages current employees to remain employed, by having policies and
practices in place that address their diverse needs. Despite efforts to explain
what employee retention is, it is clear that the reason such term arose is due
to the increasing number of employees leaving the organization for various
reasons. Collins and Porras (1994), and Collins (2001) explained that the first
key to success for any organizations is people. Organizations need to have the
right people and, thus, it is important to retain employees and knowing how an
employee can remain in a particular organization.

Therefore, we
hypothesize that, HRM practices affect employee retention. A career planning
system is necessary for employees to achieve their specific career goals. With
this in mind, Greenhaus and Callahan (1994) developed a number of career
development strategies.