Henderson's Case Study

In-order for Henderson’s to effectively implement a compensation system they must first increase managerial involvement within the organization and they must also create effective communication techniques. When restructuring within an organization it is important for firms to consider these two factors for optimal results. The compensation system at Henderson’s will primarily consist of base-pay and indirect pay. These two methods are most optimal for Henderson’s due to their current financial situation. These payments are fixed costs, which will help the firm effectively budget and plan ahead. It will also increase workplace morale, since there will be an increase employee satisfaction which further results in low employee turnover, driving

However, a firm may experience many constraints. Henderson’s constraints are legal and financial. Legally, Henderson’s is required to pay their workers at least minimum wage. Henderson’s financial constraints may arise from their current financial status due to poor management techniques. In-order for Henderson’s to implement a base-pay system they must conduct a job analysis to understand the operations of the organization. The job analysis can be conducted via observation. Further, they should use a classification and grading method to conduct job evaluations. When applying the job evaluation to the worker’s wage, the organization must identify the employee to be above or below the range. If an employee falls below the range they must be paid the minimum pay range and if an employee falls above the pay range, their pay should have a freeze on it. The firm should also conduct performance appraisals to monitor the progress of their employee’s performance and to ensure that minimal standards are being met. These appraisals are also useful for record-keeping purposes such as progressive discipline of a workers. A graphic rating scale should be used to conduct these appraisals since the tasks performed are in complex and easily measurable on a numeric scale. However, management must communicate their expectations from employees prior to the

To effectively create a budget they should apply a top-down approach where a limit is set on the total costs the firm is willing to incur regarding compensation and those funds are further broken down and divided among departments and workers. Further, Henderson’s must plan for compensation administration by creating organizational policies that outline the expectation of the employee’s behaviour at the workplace. They must also allocate tasks to ensure proper administration of the organizational information. Henderson’s should invest in a Human Resources Information System (HRIS) to effectively operation the organizations Human Resources department. This department must keep record of the worker’s hours, termination, hiring, gross earnings, deductions, pay cheques, direct deposits and benefits. This further connects with the firms need for information technology. The HRIS will help Henderson’s computerize their payroll, creating a formal and reliable compensation system. This system will also contribute to the firms record keeping of the necessary legalities, conduct labour data analysis, communicate effectively throughout the organization, collect necessary information about the employees, proper calculation of wages and planning as well as research. The compensation system is to be implemented in-house, since outsourcing will incur the firm with additional costs. Lastly,