The importance of leading and motivating

For a business to be successful, it has to not only offer products and/or services that meet customers' needs and
wants, but also have staff who are loyal and committed. However, to gain your employees' loyalty and commitment
you need to do more than just pay them well. In a competitive job market, you also need to consider people's social
and psychological needs - and this means leading and motivating your workforce properly. In order to lead your staff,
you need to be able to communicate:

a vision of what the business stands for and where you want it to be

values and priorities across the organisation

what you as an individual intend to do to realise that vision and reflect those values

what individual employees can do to realise that vision and reflect those values
In order to motivate your staff, you should:

ensure the work is as challenging and as varied as possible

establish a friendly, collaborative work environment

consider more flexible working practices

delegate tasks, allowing others to take responsibility

The benefits of showing leadership and motivating your staff

Leading and motivating your staff helps bring about:

higher staff retention - leading to reduced recruitment costs

higher levels of productivity

more innovation and creativity

higher profits

a better reputation - among both potential employees and suppliers

The importance of leading and motivating

For a business to be successful, it has to not only offer products and/or services that meet
customers' needs and wants, but also have staff who are loyal and committed.
However, to gain your employees' loyalty and commitment you need to do more than just
pay them well. In a competitive job market, you also need to consider people's social and
psychological needs - and this means leading and motivating your workforce properly.
For more on motivation, see the factsheet in this guide on what motivates employees?
The benefits of showing leadership and motivating your staff

Leading and motivating your staff helps bring about:

higher staff retention - leading to reduced recruitment costs

higher levels of productivity
more innovation and creativity
higher profits
a better reputation - among both potential employees and suppliers

Compensation System Defined

Brittany works as an HR specialist for a large corporation that manufactures microchips. She specializes
in compensation and benefit administration. Part of her job is to periodically review and recommend
advisable changes to the company's compensation system.
A compensation system is the sum total of all monetary and non-monetary benefits provided to
employees in exchange for their willingness to work. Compensation can be broken down into three
general categories:

Direct financial compensation is monetary compensation, such as wages, salaries, commission

and performance payments. This is the type of compensation that we'll be focusing on in this
lesson.

Indirect financial compensation includes compensation that has financial value but does not
consist of a direct monetary payment to an employee. You can think of it as a non-cash benefit.
Examples include paid time off, health insurance, life insurance, disability insurance, stock
options plans and services provided to employees, such as financial counseling.

Non-financial compensation doesn't have any monetary or economic value per se, but it
involves the satisfaction an employee receives from the work environment.

Salary and Wages

William is like the vast majority of workers and is paid an hourly wage by the company. A wage is simply a
specific sum of money paid for each hour worked. Of course, employees are paid for partial hours worked
as well.
The Fair Labor Standard Act (FLSA) requires wage employees to be paid an overtime rate of pay at least
one-and-a-half times their regular wage for any time worked over 40 hours during a weekly pay period.
For example, William makes $15 per hour and is paid $22.50 per hour if he works overtime. Samantha is
an executive who works in marketing. She's not paid a wage. Instead, she's paid a salary.
A salary is a set amount of compensation paid, regardless of the amount of work performed. It is often
calculated on an annual basis and paid out on a monthly basis. For example, Samantha's current salary is
$60,000 per year and is paid in 12 monthly installments of $5,000.

Samantha's job qualifies her as an exempt employee, which means she is not covered by the overtime
provisions of the FLSA. Some of the most important exemptions to overtime pay include executive,
administrative, professional, outside sales and other highly compensated employees. Each exemption
requires certain criteria to be met, including a minimum level of pay.
Commission
Carl works in sales. He's paid a salary and is also entitled to earn commission. A commission is a
payment a salesperson receives for selling a product or service and is usually based upon a percentage
of the revenue the salesperson brings into the company from sales. Carl gets two percent of each dollar
of revenue he generates in sales. So, if he brings in $2,000,000 in sales during the year, he earns
$40,000 in commission. This is in addition to his regular salary.
Some salespeople work on straight commission, which means they are only paid commissions. The
commission rates are usually significantly higher than if a salary or wage is also paid. Of course, if no
sales are made, no pay is given regardless of the amount of work put in. However, straight commission
arrangements can be highly lucrative to successful salespeople in the correct sales environment. A six or
seven figure income is possible.
Compensation Systems: Design and Goals
The design process is started by identifying desired outcomes and goals for your organization. This is
often referred to as developing your compensation philosophy. Your philosophy is formed by considering
a number of factors. The balance of direct and indirect rewards, the complexity and responsibility of a role
and the candidate or employee filling it, as well as your focus on internal versus external equity are just
few factors explored in this section. It is the ability to achieve results that is critical to organizational
success.

Importance of Compensation in the Workplace

by Rose Johnson , Demand Media

Compensation can include monetary and non-monetary components. Compensation often

includes an employees base salary and additional benefits, such as health insurance,
retirement plans and performance bonuses. The compensation packages a business offers to
employees affects the companys recruitment rate, retention rate and employee
satisfaction. Several federal laws affect the compensation that businesses offer. A business
owner should understand the importance of compensation and the prevailing laws to remain
competitive in the market.

Employee Selection The process of interviewing and evaluating candidates for a

specific job and selecting an individual for employment based on
certain criteria. Employee selection can range from a very simple process to a very

complicated process depending on the firm hiring and the position. Certain
employment laws such as anti-discrimination laws must be obeyed during employee
selection.
Employee selection Process takes place in following order1.

Preliminary Interviews- It is used to eliminate those candidates who do not meet the minimum eligiblity
criteria laid down by the organization. The skills, academic and family background, competencies and
interests of the candidate are examined during preliminary interview. Preliminary interviews are less
formalized and planned than the final interviews. The candidates are given a brief up about the company
and the job profile; and it is also examined how much the candidate knows about the company. Preliminary
interviews are also called screening interviews.

2.

Application blanks- The candidates who clear the preliminary interview are required to fill application blank.
It contains data record of the candidates such as details about age, qualifications, reason for leaving
previous job, experience, etc.

3.

Written Tests- Various written tests conducted during selection procedure are aptitude test, intelligence test,
reasoning test, personality test, etc. These tests are used to objectively assess the potential candidate. They
should not be biased.

4.

Employment Interviews- It is a one to one interaction between the interviewer and the potential candidate.
It is used to find whether the candidate is best suited for the required job or not. But such interviews
consume time and money both. Moreover the competencies of the candidate cannot be judged. Such
interviews may be biased at times. Such interviews should be conducted properly. No distractions should be
there in room. There should be an honest communication between candidate and interviewer.

5.

Medical examination- Medical tests are conducted to ensure physical fitness of the potential employee. It
will decrease chances of employee absenteeism.

6.

Appointment Letter- A reference check is made about the candidate selected and then finally he is
appointed by giving a formal appointment letter.