Organizational Environment and Employee Compensation


OrganizationalEnvironment and Employee Compensation


Oneof the environmental factors affecting an organization iscompetition. Competition happens when business that are dealing withspecific goods or services compete to get the same market (Aswegen etal, 2006). Each business may want to get the highest market share soas to make more profit. For this reason, competition remains a factorthat influences the performance of any organization. Competitors maybe organizations dealing with the similar type of goods or services.They may also be organizations dealing with identical goods orservices. It may lead to the company’s growth or failure. Healthycompetition is that competition that enhances a company to beinnovative and creative to stand out from the rest (Hellriegel &ampSlocum, 2011). When this happens, a company grows and prospers. Ifthe opposite happens, any company is eliminated from the competitionthrough closure.

Anotherfactor is customers. Customers are usually the ultimate target forany type of organizations. Customers indicate whether anyorganization is achieving their core objectives (Bean et al, 2009).They are the most important group of people in all organizationsbecause they define the existence or discontinuation of any businessdepending on their response. The response from the customers here isthe vital indicator of whether any organization is making progressivesteps in their quest to achieving their goals or objectives. It isimportant to note that customer’s tastes and preferences changeunexpectedly or suddenly (Hellriegel &amp Slocum, 2011). Therefore,an organization is forced to closely examine the changing customerdemands and respond appropriately. Failure to which, a company tomake loses and finally halt its operations.

Anotherfactor is culture and cultural beliefs. Cultural beliefs indicate allthose values that are considered to be morally acceptable to anysociety. Before any organization sets up their firms, it is importantto evaluate the cultural beliefs of that society to confirm whetherthey conform to the organization’s activity. It is an importantfactor because they affirm the organization’s presence andexistence (Hellriegel &amp Slocum, 2011). It is very difficult toturn around the cultural beliefs of any organization to suit theorganization’s goals or objectives. Therefore, for growth, anyorganization is expected to perform all those tasks that aregenerally accepted by the society. It is an important and only choicethat any organization has to avert any possibilities of socialhostilities.

Stepssetting employee training program

Thefirst step involves identifying or establishing the need fortraining. The need for training process seeks to answer the questionsof who, where, when and how (Werner et al, 2012). After that has beenachieved, the company then develops the program manual based on thejob descriptions of each and every employee. This seeks to rightlyaddress the right employee with the right skills. The third stepinvolves delivering of those program manuals to the designatedemployees. The objectives of that training are employed in this stageto the employees. The final step in this analysis is the evaluationof those programs. This stage seeks to find out the effectiveness ofthose programs. If the programs did not achieve the desired goalsthey are reviewed (Chitale et al, 2013).

Part2: Employee Compensation in an advertising agency

Inan advertising agency there are important factors that areconsidered, when considering a compensation plan for the employees.These are the educational level and skills, experience in the samefield, social security, commissions, sick or maternity leave andfinally the geological considerations establish the cost of living(Peter &amp Adrian, 2003). First is the education level of theemployees employed by the advertising agency. This is closely linkedto the skills that they bring to the agency. According to the plan,the most educated and the one with the highest level of skills willearn more than those with lower educational level and skills. Thesecond factor to consider is the experience. The employee with moreyears of experience will be compensated more than the first timeemployees.

Aneffective compensation plan is important for the employees twosecretaries, a graphic designer, three sales representatives and anoffice coordinator. All these employees should get a salary based ontheir educational levels, experience in their particular field andfinally the market price of similar positions of the same companysize in that area. Bonuses should also be provided as per the policyof the company (Bean et al, 2009). For example, an annual leave willbe awarded to every employee who applies, with a 100% pay. Bonuseswill be awarded depending on the company’s profit of the previousyear.

However,the secretaries should be awarded bonuses depending on theirattendance and their efficiency at work. The office coordinatorshould be awarded bonuses based on how well he relates to customersand the efficiency of the office. When designers win huge contractswith high market value of their particular designs, they are supposedto awarded bonuses equivalent to the prevailing market price. Finallythe sales representatives are only awarded commissions on top oftheir salaries.


AswegenV.S., Pilbeam E, Kieynhans, R., Markham L., &amp Meyer, W. (2006).FreshPerspective: Human Resource Management. Johanesburg:Perason Publisher

BeanT. B, McFadden, J. J 476(2009). EmployeeBenefits. London:Dearborn Publishers.

Chitale,K,A, Mohanty P.R 375 (2013). People,Processes, work, human resource and management.New Delhi: Kogan Page Publishers.

Hellriegel,D., &amp Slocum, J. (2011). Principlesof Organizational Behavior.Nashville, Tennessee: South-Western Publishing

PeterA., &amp Adrian W. (2003). UnderstandingWork and Employment: Industrial Relations in Transition.Oxford University Press

Werner,S., et al. (2012). HumanResource Management.Stamford,: Cengage Learning