Compensation Issue at Organization
Introduction
Compensation issues within an organization affect the employee’s relationship with the management, since this challenges their rewards or pay on the work performed. However, compensation issues are complex matters which require adequate professional and resource to handle employee condition properly. Most of the compensation issues include base pay, employee benefits, and incentives (Zafar et al., 2020). Currently, compensation issues or scandals are trending globally, therefore making many organization failures to control and maintain its survival stability. In this document, two organizations are discussed on the concern of the compensation scandals.
Canadian Red Cross Society and Phoenix Organization
The two organization are based on Canada and they have experienced compensation scandals which they affected organization performance negatively. However, this situation forces both organizations to develop a total reward compensation strategy which will improve the pay plan. The following paragraphs explain the nature of the problem and why base pay and incentives or benefit have created the problem in the organization, and finally, the possible measure to prevent the current and future compensation scandals.
Canadian Red Cross Society has experienced the scandals of overpayment towards non-profit employees. However, the employees in this organization are claiming for the underpaid mechanism which has been imposed. Officials like lawyers, directors, finance officers among others who are a top employee who was paid substantially less amount than in the real profit world. The scandal in this organization raises when top-level management teams including CEO are being paid highly against the policy of the non-profit organization. CEO salary was approximately $89,005 which was more compared to the underpaid mid-level employees, while the average pay of top management ranges from $49,000 to $60,000 (Glassford, 2020).
Furthermore, the reasons behind this scandal are such as gender bias which leads to a payment crisis. However, women, have dominated the organization population with about 70% of the employees. Also, since non-profit organization recruits individuals or charity worker or volunteers, therefore ending up undermining their priorities in work.
Phoenix organization is another organization that is experiencing pay or compensation scandals. The main challenge in this organization comes via a system of paying federal public servants. However, this makes much Canadian belief that society has been overpaid, spoiled, and bureaucrats. The public was forced on the big scandal of the Phoenix pay debacle which rolls out a public servant to incur taxpayers’ cost of $ 1.1 billion. Therefore, this resulting in the non-payment of the cash due to the servant. The agreed collective of the benefit from hardworking, total pay, and other compensation was remained unsolved until the government intervened in the compensation process (Clark et al., 2019).
Measures to solve the existing challenges
The following measures apply to both organizations (Canadian Red Cross Society and Phoenix Organization), to create conducive and strong relation of employees, stakeholders, and the management.
Equal opportunity to improve incentives: Each organization is required to educate the entire employees without discrimination the incentive and pay policy in the organization. However, this involves setting aside the means of dealing with the shortage of pay. For example, the existence of an insurance policy will compensate employees when the condition in advance.
Aligning interests: Each part involved in the organization should be aligned to the value creation interest, therefore reducing any gap which could lead to compensation scandals. However, this will encourage behavioral change according to the organization’s performance and each member will be satisfied with the current pay and financial benefits provided. Doing all this will improve the morale of employees, therefore becoming motivated to understand things in the organization better (Ekhsan et al., 2019).
References
Clark, S. S., Chester, M. V., Seager, T. P., & Eisenberg, D. A. (2019). The vulnerability of interdependent urban infrastructure systems to climate change: could Phoenix experience a Katrina of extreme heat?. Sustainable and Resilient Infrastructure, 4(1), 21-35.
Ekhsan, M., Aeni, N., Parashakti, R., & Fahlevi, M. (2019, November). The Impact Of Motivation, Work Satisfaction, And Compensation On Employee’s ProductivityIn Coal Companies. In 2019 1st International Conference on Engineering and Management in Industrial System (ICOEMIS 2019). Atlantis Press.
Glassford, S. (2020). Coming of age in the crucible of war: The First World War and the expansion of the Canadian Red Cross Society’s humanitarian vision. In The Red Cross Movement. Manchester University Press.
Zafar, M., Sarwar, A., Zafar, A., & Sheeraz, A. (2020, July). Impact of Compensation Practices on Employee Job Performance: An Empirical Study. International Conference on Management Science and Engineering Management (pp. 315-324). Springer, Cham.