Managing Compensation Costs, Headcount, and Communication Issue

Subject: Employee Management
Pages: 2
Words: 548
Reading time:
3 min
Study level: Master

Compensation is defined as an organ of human resource management that handles employees’ rewards after completing the assigned task. The tips are always in the form of finances or tangible products. Organizations are responsible for coming up with a proper remuneration plan to say thank you to their employees who completed the assigned task. The remuneration plan can be in the form of cash rewards, insurance benefits, and other benefits to keep them motivated throughout their work-life (Osbourne & Hammoud, 2017). Compensation is divided into three categories, direct, indirect, and non-monetary compensation.

Direct compensation involves the salary organization pays to the employees after a specific period. On the other hand, indirect compensation includes other health benefits such as health insurance, house, and transport allowance. Non-monetary payment involves rewards an organization gives to an employee that are not tied to monetary value. Compensation management consists of finding a balance between employees’ needs and organizational goals. Compensation management ensures that the right personnel is acquired, and ensures balance and equity between the organization and the employees. Ensures employees are motivated throughout by offering performance rewards and offering promotional opportunities. Retention of employees encourages them to give their best while handling any assigned task (Osbourne & Hammoud, 2017). The other importance of compensation management is cultivating an understanding of culture in the organization, being adequate, and managing efficient administrative policies.

Headcount in an organization involves designing a systematic strategy that ensures an organization has the right people with the right skills to perform their best roles. The main reason for the plan is to get the best out of the employees for the organization to realize maximum returns. Headcount planning helps the business respond to emerging challenges swiftly. It improves production efficiency as the company has the correct number of workforces with the relevant skills required. A good and successful Headcount plan should follow the following procedure, First, identification of the business challenges; Second, Business metrics should be well established; third, the current workforce should be thoroughly evaluated; Fourth, simplification of the headcount process and Lastly, All costs involved should be well forecasted. The Headcount plan should be an easy and accessible document readily available to the organizational leadership for adjustments based on real-time statistics (Newman et al., 2019). The quick response to issues by the organization based on internal and external factors helps the organization to be up to date with current happening, which will help avoid future risks.

Communication is a way people share different information from one person to another. Business communication involves a scenario where team members of an organization can share ideas. There are several forms of business communication employed in various organizations, one being the Top-Down Approach. It involves a chain of steps where the top leadership is shared via the different organization departments until it reaches the regular employees. The other forms of communication include the Bottom-up approach as well as the Lateral form of communication. Business communication and the full participation of employees are the heart of every organization. It helps employees satisfy their need to connect and interact. Worker places that concentrate on strong communication culture have successfully managed to make employees happy (Newman et al., 2017). A happier workforce accomplishes their task on time, hence improving the efficiency of the business.


Osborne, S., & Hammoud, M. S. (2017). Effective employee engagement in the workplace. International Journal of Applied Management and Technology, 16(1). Web.

Newman, J., Gerhart, B., & Milkovich, G. (2019). Loose-leaf for compensation. McGraw-Hill Education.

Newman, J. M., Milkovich, G. T., Gerhart, B. A., Gerhart, B., & Yap, M. (2017). Compensation. McGraw-Hill Ryerson.