Company Uses For Reward Employees For Performance

Introduction Compensation refers to a wide array of benefits and pay that a company uses to reward employees for performance. Strategic compensation refers to any type of compensation strategy that is aimed at rewarding good performance. Because the variety of companies and their internal structure varies wildly, compensation strategies can vary wildly. For example, many direct sales companies where employees are actually independent contractors use strategic compensation strategies, giving prizes for hitting certain sales goals and increasing compensation percentages with sales. On the other end of the spectrum, large corporations almost always include stock options in higher-level compensation strategies, which directly ties the†¦show more content†¦Furthermore, it is important to keep in mind that what works in the United States may differ from what works in other countries. While there is a largely global business environment, the regulations, rules, and business no rms that govern U.S. corporate structure may make some types of strategic compensation more critical in the United States. For example, in most industrialized nations, the availability of universal healthcare means that health insurance as part of an overall compensation structure is not that important. Furthermore, different rules regarding maternity leave, family and medical leave, and retirement savings can all make international models inapplicable to an American setting without making some significant alterations to those strategies. Knowledge Management Capacity Of course, strategic compensation does not exist in isolation in any business environment. Instead, strategic compensation packages and idea are often indicative of a greater attitude towards recognizing and rewarding employee innovation. As a result, it should come as no surprise that companies that practice strategic human resources practices are more likely to have greater knowledge management capacity (Chen Huang, 2009). Knowledge management capacity is positively related to innovation performance (Chen Huang, 2009). Therefore, it is critical to examine an entire corporate culture when looking at the relationship between employee performance and strategic compensation