Organization Performance

Answer

Organization Performance

Workforce compensation is an important aspect for proper management of organizations. This is because it aims at allocating benefits to the basic resources of the company, that is, the employees. Employees are the most important component of any organization. They, therefore, need incentives to retain them in the organization and increase their productivity by boosting their morale and commitment. Multiple components of pay include merit and promotion increases, lump sum adjustments and incentives. Better Business Bureau (BBB) Company used total compensation strategy for its workforce. In this situation, the company provided everything for the employee in exchange for their work. The employee may have been awarded up to two or three times their base salary. Total compensation takes a more holistic approach and is not just limited to salary increments. It brings into light aspects that contribute intangible value to the lives of employees such as skills learned on the job, trainings, opportunities, leadership roles, health insurance and a lot more. (McGinnis Johnson & Ng, 2016)

The total compensation strategy worked very effectively as there was an improvement in productivity. This is evidenced by increases in productivity in North America, for instance, the low average, high and Co.B recorded an increase from 3663, 3993, 4131, 3633 to 3693, 4027, 4173, and 3693 respectively in the following year. Productivity is an important measure of assessing production performance of firms or nations. It relates output to input in a production process. Common inputs include labor hours, capital and natural resources while outputs are basically sales made (Oswald, Proto, & Sgroi, 2015). The increases in productivity observed, therefore, reflect an improvement in the overall efficiency of the production process.

Increase in productivity resulted in an increase in the labor costs, that is, cost per pair produced in all regions. While productivity indicates labor efficiency in producing goods and services, labor costs is an indicator of the cost of producing each unit of output. In Latin America, for example, low, average and high of labor costs increased from 2.25, 2.26, 2.27 to 2.35, 2.38, and 2.40 respectively the following year. This means that more productive employees are generating a favorable output.

Employee compensation can go a long way in boosting the productivity of an organization. On the other hand, it can be a very huge expense for the company and this may result in enormous losses. It is, therefore, important to assess the effectiveness of the compensation strategy adopted by the company. BBB company adopted the total compensation strategy that can be assessed using a variety of parameters that include turnover rate, staff satisfaction, appraisal and performance management, profit, length of service distribution, vacancy rate, workforce composition, time taken to fill vacancies, customer satisfaction, reward budget costs, skill level of staff, job offer refusal rate, measures of staff commitment, sales growth, productivity per employee and economic value added. Increases in these parameters indicate that the compensation strategy is effective. (Klingner, Nalbandian, & Llorens, 2015). In the case of BBB Company, there was an improvement in productivity as indicated by increases in investor expectation scores and best-in-industry scores.

BBB Company has also clinched awards. These include the Corporate Responsibility Award. This is in acknowledgement of the company’s contribution to society in terms of human rights, economic sustainability and environmental conservation. This is one of the major objectives of this company; giving back to the community. This has been achieved by making charitable contributions, use of recyclable packaging, investing in energy efficient initiatives and the workforce diversity program. This has also come hand in hand with increases in image ratings over the progressive years that is from year 11 to year 18. This is in line with the company’s objective at increasing consumer satisfaction and quality of life in society. The company has also received the Bull’s Eye Award which is a bonus point award for accurate forecasting of total revenues, earnings per share and image ratings. Besides these, the Leap Frog Award also recognizes increases in gain-to-date scoreboard that the company recorded. This is awarded on the basis of bonus points gained from one year to the next.

BBB Company aims at achieving further improvements especially on celebrity endorsements. This is because celebrities are a crucial part in everyday life and play a big role in marketing of products since they are idolized by most people. Celebrities are also very influential people in today’s society and this would be helpful since they can contribute a lot to our society improvement programs. This would translate to an increase in sales earning the company even more returns. In line with our vision to improve society, we aim at investing more in charitable contributions, ethics training and enforcement, energy efficient initiatives, use of recycled material for packaging and use of ‘green’ footwear materials. Another aspect we aim at is cutting down on labor costs so as to increase the profit margins. Reject rates also need to be reduced to very dismal figures by making our products more attractive to consumers. We also aim to reduce reject rates by diversifying our footwear products to suit the demands of our consumers.