Action and Compensation Policy
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ScribdTranslationsBolivarian Republic of Venezuela
Simón Rodríguez National Experimental University
Barquisimeto Hub. Lara
The compensation in the context of business strategy Unit No. 1 (WORKSHOP)
Mendoza Rosmer
Dear Emily C.I:24.400.997
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Morillo Ruberlyn
Course: Action and Compensation Policy
Chirinos Yenny
Barquisimeto, February 2017
1. ¿Realizar 2 Teorias en las cuales se refleje la remuneracion y explicarlas?
Theory of High Wages:
Exposed by Henry Ford in 1915, his philosophy is based on the belief that wages
high prices lead to greater consumption, this creates a greater purchasing power by
part of the salaried workers and the general population. Evidently, this is a thesis
inflationary.
This theory states that providing high wages to workers leads to a
higher consumption, an increase in the demand for products, and as a consequence of this,
products at low prices.
If productivity grows, it increases profits and leads to new investments that
they promote better production. In summary, what increases the salary is a rise in
productivity drives again to a higher production, in this way it would be possible
reduce the workday and thus its employees would have more time to spend. This theory
it can be valid as long as productivity increases, otherwise it would only lead to
an increase in payroll expenses.
Salary Remuneration:
“According to Urquijo (1997), compensation is the total payment that a worker receives.
for the provision of their services, for which many authors consider the remuneration
as a consideration. Likewise, Pernaut, cited in Urquijo, defines it
economically as the certain compensation, anticipatory to production,
periodically received, established on a contractual basis as due by the
worker, pending.
It should be considered on the other hand, that compensation is seen in different ways by the
society, shareholders, employees, and employers. Society sees payment as a
A measure of justice, for example, is equity between men and women. For shareholders, it has
a special interest in the measure of participation granted to the employee in the company.
For employees, it is an exchange for their service, like a reward for a job.
well done; these reflect your personal skills or the return of education or
training they have acquired. Employers see compensation as a source of
competitive advantage, as a possible influence on work attitudes and behavior
of the employee and their organizational behavior.
Now, salary plays an important role in the concept of internal equity since
this is based on the legal provision that states that for equal work performed in
position, working hours and conditions of efficiency must also correspond to a
equal salary and as a consequence, more work should also correspond to higher salary.
In other words, the salary is used for the employee to measure the balance they perceive.
between his contributions to the purposes of the company and what he considers a fair compensation for them
contributions.
2. Contextualize the term remuneration for the worker and the organization
Throughout history, remuneration has been understood as giving and receiving,
where the human being has been involved as in a personal, spiritual event,
economic or simply business, will be taken as compensation either in kind or
coins that will be of great utility, satisfaction, or happiness for human beings; for society
this act is considered as the foundations of balance, justice, equity, and reciprocity. For
the man was a very relevant event in his life since through the compensations he was
they invented tools used for hunting or for their defense, that is, for
its survival on earth, from there arise what are the first estates where it originates
the so-called barter, which is nothing more than the exchange of some products for others, due to the
high production new agricultural instruments were implemented to continue
increasing production while at the same time having the power to change or compensate others, is
So where does labor first occur in which they were paid in land,
shelter, food, and protection, as well as seeds and tools.
For George Milkiovich in his book compensation, he talks about how remuneration has
different meanings from the perspective of the worker and the employer:
For the worker, remuneration is the reward for their effort and what they invested in
obtain their training as a professional throughout their life, as well as their source
main source of income, this is why compensation is a fundamental factor for the employee
in their economic and social well-being. This same author in his book tells us that
these compensations can be financial and non-financial which can be
direct such as: Base Salary, Merit Increase, Incentives, and Cost Adjustments
life, and the implications that would be: Protection programs, Work free time, and Services,
It is understood that compensations are direct when the employee receives payment for their work.
through their salary, wages, commissions, and bonuses, and that the indirect ones also known
as benefits are those that do not fall under direct compensation such as their
vacations and insurance. Nowadays, companies make use of the combination of both, many
as strategies and others for compliance, but all with the same goal which is retention of the
employee within the company.
As for the organization, it means in a certain way a production cost that in some...
cases are very high and must allow to carry out their activities within the
organization, apart from the fact that compensations allow an orientation towards employees in
certain types of behavior and thus convey a message to their
employees, that is to say, for organizations, salaries are an operational cost and it is a
important reason to ensure that these systems have solid management and that they are
designed in an equitable manner and fair for all those who make it up. Although today
Organizations align their compensation according to the employee's level of education.
and the position he occupies within the organization.
3. Internal and external factors that influence salary compensation.
The managers of the Human Resources Department in companies need to have
list a series of internal and external factors that influence and must be taken into account
formulation or review of the established salary or compensation policy for workers, already
this way it will be possible to decide on the most appropriate general level of wages for the
company and the worker.
Internal Factors
1. Employer Compensation Policy
At a minimum, both large and small companies must establish compensation policies
that reflect:
The internal compensation relationship between positions and skill levels.
The external competition or the payment stance of a company in relation to what
offer the competitors.
A reward policy for employee performance
Administrative decisions regarding the elements of the payment system, such as bonuses
for extraordinary time, payment periods and short- and long-term incentives.
2. Value of a position
Through a job evaluation system even though the levels are subject to the
collective bargaining, job evaluation can help the organization maintain some
degree of control over its compensation structure.
3. Relative value of the employee
It is possible to recognize the performance of employees and reward them through promotion.
from various incentive systems.
4. Company's ability to pay
In the public sector, the amount is limited by the budget assigned for this purpose,
In the private sector, pay levels are limited by profits and other resources.
financial resources available to them.
5. Productivity
It depends on the energy and the qualification of the workforce and mainly the technology.
a determining factor is the salary since when it increases, the motivation of the employee and
therefore its productivity.
6. Efficiency
This refers to the way the employee performs in the position.
Equity
It is an important factor within organizations as it must ensure payment rates.
correct as a fair assignment of positions according to knowledge, skills
and skills of the employee.
External Factors
1. Labor Market Conditions (Job Offer)
The labor market reflects the supply and demand for labor. When the demand for
when the work decreases the salary increases and when the demand for work increases the salary is
reduce.
2. Local Compensation Levels (Levels of Living)
It refers to the data on the compensatory levels of the geographical area, allowing the establishment of the
minimum wage levels.
Cost of Living
This can be achieved through proportional adjustment clauses found in several
collective contracts, these clauses provide quarterly adjustments in wages and salaries for
maintain purchasing power and is based on changes in the consumer price index
4. Collective Agreement
This establishes the responsibilities and rights of the worker upon which it will be governed.
starting from when it is used in a company where it will also be assigned according to the law to the
company policies.
5. Legal Requirements (Customs and Legislation)
The legislation regarding wages is very extensive and is supported by the Federal Labor Law.
where the criteria that organizations must follow to ensure a
equity by the company and the worker.
6. Influence of Unions
It is responsible for maintaining the fair regulation of jobs as well as ensuring that
the salaries provided should be appropriate according to the law to meet the needs of
the employees.
4. Remuneration subsystem and its importance in people management
in organizations.
When talking about the remuneration subsystem, we focus on a compensation plan that must
possess every organization, since the center of action for people revolves around the
the level of wages and social benefits, which leads to a constant struggle for
establish regulations and rules that guarantee and protect the rights of workers in the
organization with justice and equal conditions.
In this sense, supporting this topic, with the legal framework of the LOTTT in its article 104. Explains
clearly the understanding of remuneration. Salary is understood as remuneration,
benefit or advantage, whatever its name or calculation method, as long as it can
evaluate in legal tender, which corresponds to the worker for the service provided
of their service and, among others, includes commissions, bonuses, gratifications, participation in
the benefits or utilities, overtime, vacation bonus, as well as surcharges for holidays,
overtime or night work, food and housing.
The subsidies or benefits that the employer grants to the employee,
the purpose of this one obtaining goods and services that allow them to improve their quality of
life and that of his family have a salary character.
For the purposes of this Law, normal salary is understood as the remuneration earned by the
regular and permanent worker for the provision of their service. They remain
therefore excluded from it are the perceptions of an accidental nature, those derived from the
social benefits and those that this Law considers not to have a salary nature.
For the estimation of the normal salary, none of the concepts that make it up will produce
effects on oneself. Likewise, the remuneration is deducted as the payment in current money
regularly and permanently, which is recognized to the worker for their provided service.
Perceives commissions, bonuses, gratuities, benefits like profits, extra salaries, bonus
vacation, surcharges for holidays, overtime or night work, food and
housing.
The contributions that the employer grants in order for the worker to acquire goods and
services for improving your quality of life as well as that of your family are of a salary nature.
Based on this premise, within the compensatory system, there is the subsystem of
remuneration, which develops through different types of compensation among them is
they find:
Commissions: It is a percentage of the selling price of a product that is given to
grants to an employee, which is stipulated in the employment contract.
Incentives: It refers to a reward, tangible or intangible, in exchange for which
people assume their membership in the organization (decision to participate)
and once in it, they contribute their time, effort, and other personal resources
(performance decision)
Bonuses: It is a part of the profits that the employer has acquired.
in the commercial year and must be distributed among the workers of the company.
Supplementary wages: These are generally paid through a salary scale.
of professionals and based on their specialties.
Vacation bonus: It is the payment made by the employer to the employee, for the
during their vacation period, in addition to the corresponding salary a
special bonus for your enjoyment equivalent to a minimum of fifteen days
of normal salary plus one day for each year of service up to a total of thirty
normal salary days. This vacation bonus has a salary nature. According to art.
192 of the LOTTT.
Holidays recharge: When an employee works on a holiday, they will have
right to the salary corresponding to that day plus an additional 50% of
normal daily salary. Art. 120 of the LOTTT.
Overtime hours: These are those that exceed the maximum working duration of
the working hours, therefore, will be paid at fifty percent of
surcharge, at least, on the agreed salary for the regular working day. For
the calculation of what corresponds to the worker due to hours
extras will be based on the normal salary earned during the working day
respective. Art. 118.
Nevertheless, when referring to the job position in the salary or compensation system, it
it must determine the level of complexity or relative value compared to other positions; for this purpose it is
a prerequisite is to know it in depth, which involves carrying out an analysis and description of
position, since these will define and delimit the responsibilities of each role.
Finally, the importance of a balanced, fair, and framed remuneration subsystem
regulations of the law that regulates it, undoubtedly keeps the staff motivated.
organization, as it allows to keep collaborators in a competitive position, it
provides economic stability and meets basic needs. In this way, it promotes to
that organizations work in the best way, thereby optimizing the development of personnel and
therefore of the same.
5. Essential criteria for developing the salary policy
An adequate remuneration is crucial for maintaining an employee's motivation.
within the company, having a payment policy compatible with the market is essential for
ensure that the organization remains competitive; for this, the adoption of a
salary policy.
Now then, establishing a salary policy is a critical function of management.
of human resources, as it is a fundamental management tool that contributes to the
improvement of productivity, competitiveness, and motivation of workers. It can be defined
as the set of principles and guidelines that provide the necessary orientation to the organization, in what
that corresponds to the remuneration of its employees. However, the salary policy is not
static, on the contrary, it is dynamic and evolves as the company evolves.
It is important to note that the policies form the foundations of the salary system and also the system of
personal rewards such as social benefits, incentives, and bonuses based on performance
stability in the company, opportunities for development among others.
According to Tomas Patton, the salary policy must have seven criteria to be effective, which are:
Adequacy: to meet the minimum wage levels stipulated by the state, that is,
the government annually regulates the minimum remuneration that must be received by the
workers whatever activity they perform for each day of work.
Equity: all employees must be compensated fairly according to their
efforts, skills training and results
Balance: salary, additional benefits, and other compensations provide a
total reasonable compensation package
Effectiveness: in terms of costs, the policy cannot be excessive and must take into account what the
organization can pay
Safety: the salary must be enough for employees to feel secure and to
that can meet their basic needs. That is to say, to raise the standard of living of the
workers, while costs are rising, workers' salaries are also increasing
they can do it.
Incentive: it must induce efficient and productive work, specialists recommend.
reward a behavior that demonstrates that the employee is engaged
with the organization and that it wants to maintain.
Employee acceptability: it must be reasonable for both him and the company.
6. Salary Policies
After all that has been explained about the different remunerative administrative parts for the
what the organizations are made of we can say that employees are governed by the
salary policies that will depend on the performance that each one can have
I employ the skills and abilities they possess when carrying out their
work activities aimed at meeting the priority needs of the community with the
purpose of meeting the common objectives of the companies.
Similarly, salary policies are a tool that helps us manage orientation.
and the principles of companies will all depend on the type of company it is, likewise the
salary policies vary according to the situations that may arise in different
opportunities of daily life, whether internally or externally, where they go
focused on the distribution of the compensation payments of each employee in the
organizations; that is to say, policies are the management of the compensation of each one of the
members who can form the companies.
Moreover, the policies are the foundation of the internal equity system because they are focused on
work performance of individuals or employees in order to satisfy the
priority needs of the community and in support of achieving the goals set by
companies being this aspect essential in all organizations because that is where it starts
work, the skills acquired to perform tasks; and external competitiveness because
consider the salaries and wages that companies can pay compared to others, the
assimilation of competitiveness in the market with other companies of the same level.
It must seek to maintain a balance between both variables in order to be able to count on
a motivated and satisfied staff in their work; likewise, these salary policies are
indispensable in every organization because it helps retain staff, attract skilled personnel,
reduce the turnover rate of human talents, improve job performance, enables
feasible learnings that help people become more interested and satisfied in it
achieved optimal and effective performance in organizations.
Being this an important factor for companies and for people because through
this process is about managing the remuneration of the entire organization, of course, that each
the organization will present it in the most appropriate way they see fit as long as
seeking to comply with the stipulated regulations and laws and with the benefits and satisfaction
both for employees and for the progress of the companies, in which we can
mention the way they classify positions, taking into account the salary scales in the
What are the remuneration bases for each position of each worker, how much forecast of
the adjustments of the salary systems have, whether stipulated in the collective contracts,
for merits, for competitions among others; taking into account the social benefits incentives and
incentives that employees can receive to achieve effective performance within the
the same, growth opportunities such as workshops of interest, courses, profession taking into account
it accounts for the stability of organizations and the performance and interest that the worker possesses, so
as benefits, additional payment for seniority, family, overtime, hours
supplementary among others each of these is at the disposal of each company what benefits
Giving or not will depend on the performance of the staff and the position held.
That is why every corrective action for an employee is feedback because of
There, you will learn and nourish your knowledge to put it into practice, the salary policies.
The company will pay them according to their stability, their growth, the performance of the work where the
A key element is to have or seek to maintain a motivated work team and a good
communication to act before the charge or situations in the best way optimizing
both personal and organizational growth that must be taken into consideration
primarily equity, adequacy, balance, cost-effectiveness, security, incentives
and employee acceptability.
Where I sought to have a reasonable policy for payments, incentives, benefits taking into account
account for what organizations can pay, seek an employee who acts reasonably
both for the company and for its well-being, taking into account salary levels
stipulated by the State.
It can also be said that nowadays Venezuela is going through an economic crisis.
extremely extensive in which there is very little growth both personally and organizationally
due to a stage of very high unemployment; this caused by a lack of resources
monetary and due to inflation, that is why the incentives are hardly noticeable in companies.
monetary or other benefits that a worker may enjoy this originates perhaps from
cost-effectiveness, due to the adjustment of salaries and wages if they are small companies
merchandise rotation which causes wage policies to decrease every day
but on occasions this causes demotivation in most employees, although not only
monetarily it is encouraged but it is one of the variables that affect the worker also that
Nowadays, mistreatment also greatly influences the performance of staff, which is why;
for companies to have effective salary policies, resources must be managed well and
human talent to achieve optimal organizational and personal results in the world of
market and social.
Bibliographic References
The remuneration of work: Manual for managing salaries and wages / by José I.
Urquijo and Josué Bonilla. Print foot (2008).
Morales A. and Velandia Nestor (2001). Salaries Strategy and Salary or Compensation System
Compensations. McGraw Hill.
Electronic References
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remunerations2.shtml
