The success of an organization in terms of meeting its objectives depends on how it manages its human resources. Operating and maintaining an organizational culture requires the input of a dedicated and motivated competent staff. Salary and packages have been used by organizations as part of the strategies for operating on a definite organizational culture and maintaining a cutting-edge above competitors. The focus of this paper is to examine the relationship between salary and benefits administration with organizational culture and performance.
Relating Salary and Benefits Administration to Organizational Culture. The concept of organizational culture is used in reference to the summation of the past and present assumptions, experiences, philosophies and values of an organization that holds it together (Chen, 2010). This aids the organization’s ability to maintain an image, guide inner operations and interaction with the external environment and cast into its future. This concept encompasses the principles guiding conduct of business, treatment of employees, autonomy and freedom of decision—making, and determines the commitment of employees to the common objectives of the organization. Salary is the regular payment that is given to an employee on the basis of the terms of employment and the work done, while benefits are a form of compensation paid by an employer to employees outside the amount of pay that is specified as the base salary (Chen, 2010). The realization of the common objectives of an organization, which forms the core of organizational culture, depends on the input of employees.
Good salaries and benefit schemes for employees is a strategy that the management of an organization can draw on to achieve its culture. Although the motivation of employees does not exclusively depend on salaries and benefits, there is empirical evidence that better salaries and benefits motivate the existing employees to work with commitment to realize the objectives of the organization. According to Chen (2010), motivation of employees and their input determines the quality of work that is put into the organization daily. Furthermore, the satisfaction of customers forms the core vision, value and philosophy of organizational culture. However, this depends on the ability of employees to passionately serve to meet customers’ demands. This may occasionally call for a dedicated, motivated and passionate team of employees that can sacrifice personal interests and comfort to satisfy customers’ demands. Unfortunately, it is not possible to achieve this without better payments and benefits for the employees.
Good salary and benefits administration strategies can be used magnetically by organizations to attract talented, innovative, highly competent and experienced pool of employees (Chen, 2010). This strategy can also enhance retention of the best employees in the organization and cushion it against employee turnover that causes loss of talented employees. Attraction and retention of skilled and talented employees through better salaries and benefit administration strategies helps the organization to meet its core values, vision and mission. The functionality and success in the achievement of organizational culture depends on the availability of competent, talented and experienced labor force. Therefore, good salary and benefit schemes significantly contribute to the realization and operationalization of organizational culture.
Relating Salary and Benefits Administration to Organizational Performance
Organizational performance encompasses the real output or realized results of an organization that is measured in relation to the intended goals and objectives of the organization (Chen, 2010). The general performance of an organization depends on the performance of every individual employee in the organization. Thus, the concerted input of employees in an organization determines its general output and performance. This implies that for the organization to realize great performance indexes, the performance of its employees must be considered and enhanced accordingly. Salaries and benefits, therefore, form a key component of strategies that employers can utilize to boost the performance of employees. Performance-related pay can be used as an incentive to increase productivity of employees and, therefore, of organizations.
Employers use salaries and benefits to show the employees that their input and contributions to the success of organization is appreciated. Therefore, salary and benefit schemes help in motivating employees to improve their performance and achieve the goals of the organization. Moreover, the performance of an organization highly depends on its ability to attract a skilled and productive team of employees (Abel, 2011). This is possible through maintenance of good salary and benefit systems. Performance appraisals in an organization can be used to motivate competent, innovative and productive employees in an organization. Such performance-based payments and benefits are powerful tools that charm employees to give their best on the job thereby enhancing the performance of an organization in the long run. This is so because a motivated, talented and innovative team of employees enhances realization of performance, goals and targets within the set timelines.
Salaries and benefits that are based on performance enable organizations to retain top performing staff. Such salaries and benefits entice employees to stay within the organization. Salaries and benefits have therefore helped employers to contain employee turn-over, which is a great challenge for organizations’ performance. Having consistent, highly motivated, talented,well-rewarded and paid employees translates to improved organizational performance (Abel, 2011). Such strategies enable the staff to own the objectives and goals of the organization and concert their efforts to improve its performance.
In conclusion, salary and benefits contribute to the realization of the organizational culture and performance. This is because salaries and benefits act as powerful charming tools for motivating employees to improve their input in the organization, which translates to organizational performance and culture. A motivated, dedicated and competent team of employees is essential for the realization of organizational culture and performance goals of every organization.