Assessment of the compensation system of Simply Literature Production
The compensation system of Simply Literature Production is unsystematic. There is no official system for compensation and benefits of the employees of the firm. There is no regular record-keeping for the performances of the employees. There is no performance analysis and no systematic arrangement of employees. Despite employing 120 people, there is a complete lack of methodical and structured employment as most of them are made to work in production. A small number of supervisors who are puzzled about their job are often contradicting each other. How are they supposed to “supervise” their subordinates if they are themselves disorganized and ill-informed about their jobs? The employment of relatives despite their inability to perform well shows bias, appointment of only one book-keeper for over a hundred employees is bound to result in confusions and conflicts, the dearth of specialists in any field shows a complete deficiency of specialization in the firm, the lackadaisical distribution of leaves shows no ambition for the organizational goals and, lastly, the jumbled bonus system will sure to hurt the morale of the employees. In short, there’s a total lack of a systematic approach throughout the management of the firm which is bound to failure.(Long, Strategic Compensation in Canada: Evaluating Individuals, 2018)
The reason behind the high turnover of new employees
Considering the highly unorganized nature of the management of the firm, it is not a surprise that most of the employees end up resigning in a short passage of time and are replaced by the new ones. The major reasons behind this are:
- The supervisors have to work in the management as well as the production. They have confused about their job profile. How can one expect them to control and supervise their subordinates? This leads to poor management and creates chaos among the employees. Ultimately, they leave and the vacancies are filled by recruits.
- There is no proper program for employee compensation and benefits. They are given bonuses based on the owner’s memory of them every Christmas. This will demotivate the employees and ultimately force them out of the firm. The basic concept of motivation by monetary incentives is absent.
- The lack of organizational goals and objectives has led to a mix-up of employees in various tasks. Supervisors are working in production, only one bookkeeper is handling the books of 120 employees and most of the recruitments are biased in favour of the owner’s relatives. There are no organizational or personal goals outlined.
- There is no performance review and analysis, no salary and compensation audit and no appraisal program on a timely basis. The new employees are on the mercy of the owner’s memory. The older ones are always well-paid since the owner considers them loyal no regards to their performance whatsoever. This will alienate the new employees instead of welcoming them, ultimately forcing their hand to pen the resignation.
- There is no delegation of decision making power, authority and responsibility throughout the firm. Everyone is clueless about their powers and ultimately come to the owner for the solution. This will unnecessarily prolong a simple decision and also create a sense of low self-esteem among the employees since they hold no authority to make even a simple decision.
- The noticeably larger difference among the bonuses distributed among the employees is bound to create discontent among them. This will spread disharmony among the employees resulting in their resignations one after another.
- Lastly, the complete lack of a systematic operation of the firm will fail in the retention of the employees in the long term.(Long, Strategic Compensation in Canada : A Behavioural Framework for Compensation, 2018)
- Concepts of Compensation and Benefits that are violated here are:
- A positive and natural reward system – Completely absent in this case. Irregular rewards harm than good.
- Alignment of organizational goals with individual goals – There are no organizational objectives outlined and no relevance of individual interests.
- Integrated reward system – The employees are rewards only on Christmas with no relation to their actual performances.
- Faulty recruitment – The recruitment is biased towards the relatives of the owner with no regard to their actual suitability for the organization.
- Performance review – There is no performance analysis and review system. No appraisals for well-performing staff and no periodic audit for salary compensations.
- Staff retention – The owner is least bothered about staff satisfaction and the fact that there is a high of new employees.
- Fairness and Effectiveness of the compensation system:
The compensation system applied here is neither effective nor fair. The bonus is distributed once a year based on the owner’s memory and personal opinion with no regard to their actual performances. The absence of a formal compensation system further deteriorates the situation.
- Changes that should be introduced:
- Proper and systematic recruitment of the staff. The bias towards the relatives of the owners despite their unsuitability for the job should be stopped.
- Clear job descriptions and work-allotment. All fields should be given equal attention, from production to supervision to book-keeping.
- A systematic performance analysis and review program.
- A systematic approach to the compensation and benefits offered.
Establishment of a link between the personal goals of employees to the goals of the organization.(Long, Strategic Compensation in Canada :A Road Map to Effective Compensation, 2018)
Recommendations:
The company should carefully consult a Human Resource consultancy to create an effective compensation and benefit system. The recruitment process also needs help from professional hiring agencies. The job profiles and the corresponding compensation packages must be highlighted in the job descriptions. The appointment and work-allocation of the employees must be based on their qualities. There must be a balanced focus on all the necessary fields of the firm instead of focusing only on the production. The compensation and benefits provided to the employees must be linked with the organizational goals of the firm to create a sense of accomplishment among the employees. A fair, just and satisfactory compensation system goes a long way in securing the best employees for the long term future of the firm.A happy employee will always contribute in the growth of the company.
References
Long, S. (2018). Strategic Compensation in Canada : A Behavioural Framework for Compensation. Nelson.
Long, S. (2018). Strategic Compensation in Canada :A Road Map to Effective Compensation. Nelson.
Long, S. (2018). Strategic Compensation in Canada: Evaluating Individuals. Nelson.
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