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ethics in compensation

INTRODUCTION :Employee perception of fairness in compensation methods and systems
is important to achieve the purposes of compensation management,
which is a basic function of human resource management. As such,
perception of organizational justice correlated with variables known to
effectively impact job satisfaction, motivation, intention to leave, and
burnout is determined on a large scale by the application of
compensation and salaries

DEFINATION :compensation management is the act of distributing some type of

monetary value to an employee for their work by means of the
company's policy or procedures. In basic terms, it is paying an employee
based upon the decided pay and benefit package for the position. The
goal of compensation management is to find quality people who perform
quality work and then compensate them in order to retain them and
reduce turnover rates. Some different types of compensation include
salary, overtime pay, commission, bonuses, and benefits packages that
might include health and dental insurance, vacation time, and retirement

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Tips for Managing Ethics in the

1. Define your values. If you havent done so already, define your values and
include honesty as a core value. Take your leadership team off on a retreat or
use your staff meetings, but make sure that you have clear and visible
statements about what is important to your core business principles. Put them
up on a poster so that they are visible to all employees. Post them on your
website, put them in your policy manual and your employee handbook. And,
add them to your performance review process so that you can hold people
accountable to them.
2. If you post, you must practice. Posting values and then not actively
demonstrating them can be very damaging to an organizations culture. Hold
everyone accountable especially your senior management team. Make sure that
they are walking the talk of ethical behavior. If they are doing anything that
even could be perceived as questionable, confront it.
3. Integrate ethical workplace behavior into performance criteria. Dont
rate people as high performers if they do not practice ethical workplace
behavior. Instill in your leaders that high performance means high integrity.
They are not mutually exclusive. Dont give big raises, promotions, etc. to people
who perform well, but have questionable ethical behavior. Dont let a highly
skilled employee hold you hostage. Dont let people get away with bending the
rules of appropriate workplace behavior just because you dont have a good
backup plan for them if they quit and go to your competitor. Make sure you have
a succession plan in place for anyone who has a skill that is critical to your
4. Watch out for the slippery slope. Have you ever used the term, his
behavior really crossed the line? Each workplace has a line that separates
appropriate behavior from the inappropriate. Organizations get into hot water
when they define or ignore some unethical behavior because it is considered to
be a small issue or no big deal. When they do this, they are moving their line
farther down the slippery slope. Many companies who have been sued for large
amounts of money due to ethical issues were allowing way too much unethical
behavior because their line kept sliding down the slippery slope. Businesses

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must stand firm on their intolerance of any and all dishonesty and unethical
5. Being above reproach. Above reproach is the practice of not only staying
above the line, but staying way above it. Ethical organizations manage
perception, as well as reality. They ensure that even those types of behavior that
might look like unethical behavior are discouraged as well and drive this point
with their leadership team.
6. Getting past self-protective behavior. Remember that ethical behavior is
not just about me knowing right from wrong, it is about my willingness to admit
it when I have done something wrong and accepting the consequences for my
actions. It is about valuing integrity even if it hurts. Good leaders not only
practice ethical behavior themselves, they help people get past looking out just
for themselves and seeing the greater good of team and corporate objectives.
Ethical behavior makes organizations succeed. A business that does not value
integrity and does not walk the talk of being ethical will find themselves at the
bottom of the slippery slope and wonder when and how they crossed the line.
This is why we need ethics in the workplace.

tools for motivating

employees :Companies can motivate employees by giving them the
authority to make decisions and encouraging them to be
innovative and creative. These external motivators allow
employees to feel like part of the company and work toward
achieving organizational objectives. Providing training and
classes that allow employees to perform better at their jobs
shows that the company believes that employees can achieve
more with additional skills and information. Providing
opportunities for physical exercise and child care and allowing
employees to work from home can reduce stress and motivate
employees to improve work results.

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importance of compensation and

benefits :Competitive compensation packages ensure a company
attracts the top talent available in the industry. When deciding
between potential job offers, employees often look to the
compensation package first. Benefits help ensure a prospective
candidate sticks with a company. As single employees marry
and start families, benefits such as health and life insurance
become essential parts of living. Companies that provide these
services for free or a reduced cost as benefits entice
employees to stay.
Many companies tie compensation directly to employee job performance through
incentive packages, such as bonuses and profit-sharing plans. This helps
employees align their professional goals with those of the company while
rewarding top performers and providing incentives for them to stay.

CONCLUSION :Human Resource Management is a business function that is concerned with

managing relations between groups of people in their capacity as employees,
employers and managers. Ethics in human resource management in organizations
are needed to establish corporate culture for organizational excellence. Ethics
regards the facts from a different point of view, which maybe called that of
appreciation, and which is expressed in value judgments of worth, duty or goodness.
However ethics is not definable, is not implementable, because it is not
conscious, it involves not only our thinking but also our feeling. It may be referred to

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as some standardized form of conduct, behavior of individuals understood and

accepted in
a particular field of activity.
There are some theories on ethics which are giving a clear picture on the
need and necessity of ethics in Human Resource Management. These are theory of
moral unity and theory of amorality. The theory of moral unity essentially advocates
the principle that business action should be judged by the general ethical standards
of the society. Whereas, the theory of amorality argues that a business can be
amoral, and actions of businesspeople need not be guided by general ethical

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