Compensation is directly proportional to competitiveness

Many factors contribute to making a workforce competitive. Among these, a good work environment, meaning recognition, freedom to innovate and contribute to the organization, is vital. This said; compensation’s link to competitiveness cannot be overlooked. Why? All said and done, we have a livelihood. We have families to take care of. Most importantly, we have monthly bills to pay! So, while factors that give us emotional satisfaction are critical, there is a strong link between compensation and competitiveness.

Compensation as a motivating factor

The job a person does should make use of her full capabilities, potential and skills and educational qualifications. More than anything else, it should be one that allows her to demonstrate her natural abilities, which is when employees feel like giving their best.

A second and equally important component of a suitable job is that it should pay her a decent income. While a job that provides all these is a great one; a job that has all of these but pays poorly finds it difficult to motivate the employee in the long run. It is perhaps fine for a while, when the employee is perhaps too young to be in need of major expenses or is unmarried and without a family, but expecting that good working conditions alone are enough to keep the employee satisfied and in the job is being unrealistic.

This is a case of the employer failing to appreciate compensation’s link to competitiveness. A good employer, on the other hand, understands compensation’s link to competitiveness and provides not only a satisfying job, but compensates, too for it.

Compensation and benefits

Compensation is the sum of wages and benefits. There is a clear difference between wages and benefits. Wages are the actual money that we get for having spent our time in office. This is what may be termed as the minimum guaranteed take home. Benefits, on the other hand, are those perks that add up to the value of the wages. For example, lunch, medical benefits, assistance with children’s schooling, option for teleworking, transportation and related items fall under benefits. Since compensation is a combination of these two components, there is a clear link between compensation and competitiveness.

No worry –more efficiency at work

When employees are well taken care of with a good mix of wages and benefits; it acts as a tonic by making them feel at home. The more comfortable an employee is with the organization; the more productive she is likely to be. For, if the worry of having to answer debtors is not there, or if the tension of where to look for resources to take care of the house is missing, it goes without saying that employees will feel like performing the organization that made all these possible. This is a strong indication of compensation’s link to competitiveness.



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43337 Livermore Common | Fremont| CA | USA | 94539


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