Legal Environment and Total Rewards

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Abstract

The highly competitive landscape transforms the manner in which firms conduct businesses. Firms are currently increasing their presence in the world market, reducing costs and adjusting to the transmission of new information technologies and well as focusing on the improvement of qualities and value addition. Essentially, these reasons explain why human resources practices must focus on improving employee skills, motivation, job retention, and motivation.

Introduction

The main purpose of Human Resources Management (HRM) is to ensure that it adheres to the overall direction of the firm in pursuit of attaining its stated goals and objectives. In other words, human resources practices have the capability of increasing the core competencies of the firm (Vance, 2012). In essence, appropriate management of people within the organization is a significant, sustained source of competitive advantage. One of the practices of human resources is ensuring a compensation system that adheres to the stated regulations as well as geared towards employees’ motivation, job retention, and satisfaction (Vance, 2012).

The Manner in which Laws Affect Wages that Employees are Paid

Laws and regulations are put in place to harmonize the rewards and benefits of employees as well as utilized by firms to peg their compensation strategies (San, Theen & Heng, 2012). Wide varieties of laws are available within the workplace and affect the general employees’ work environment ranging from rewards to retaliation and safety. In fact, most of the laws affect the manner in which employees are paid, other benefits as well as severance. However, these regulations are not only restricted to compensations and benefits but also protect employees against any form of discrimination within the workplace (Conneely, 2005).

The worker’s compensations and benefits are not only being determined by the level of their competencies but also by the state and federal employment legislation. In fact, most of these legislations are designed to protect employees from constant abuse by employers. Within the modern human resources practices, it is imperative for HRM of the firm to comply with the set regulations, particularly while determining the level of compensation among the workforce (Chen & Hsieh, 2006). In most cases, the laws and regulations are normally characterized by the manner in which they affect the four basic functional areas of employees’ management. The functional areas ranging from the workers’ acquisition to compensations and maintenance (San et al., 2012).

The compensation in these functional areas remains critical. In fact, the direct link between compensation and the general performance of the firm provides the basis in which laws regulating the workers’ benefits remain critical consideration (Chen & Hsieh, 2006).

In most cases, HRM legislations are aimed at normalizing the wages, salaries, and benefits in relation to the workforce performance as well as doing away with discrimination within the workplace environment. The normalizations are often in terms of public and private sector workers’ compensation systems. Besides, the legislations and court rulings ensure that firms within both private and public sectors provide equal pay to workers without any form of discrimination (Simon, Traw, McGeoch & Bruno, 2007).

For instance, the civil rights act of 1991 illegalized any form of discriminating practices by firms against employees regarding payment, gender, personality as well as ethnic origin. In fact, the act forced the employers to adhere to non-discriminating activities, document and often attains fairness in terms of hiring, pay, benefits as well as all actions and roles related to HRM practices (Zeidner, 2009).

Several court rulings and legislations have affected the manner in which wages and salaries are distributed within the firm and normalize the compensation practices of both private and public firms. In fact, the law enforcement agencies have ensured that there are civil penalties for any form of discrimination. In most cases, organizations are forced to provide equal compensations according to the minimum wages or implement affirmative action programs that promote equal payment systems particularly to the underrepresented among the workforce (Chen & Hsieh, 2006).

Specific Private Sector Examples

Most organizations have acknowledged the importance of legislations and various court rulings in the determination of wages and well as applications in the compensation practices (Atkinson, 2009). In fact, employers differ widely in the application of these laws in their compensation practices and wage determination. Even though most of the federal labor laws prohibit any form of workplace discriminations, the majority of private firms have continuously been involved in the violations of these rules and regulations particularly in the disparity of wages (Zeidner, 2009).

For instance, firms such as ExxonMobil, Alltel and ADM have been opposed to minimum wage legal requirements as well as other forms of workplace discrimination such as gender. In fact, such companies have not appreciated the importance of such regulations in the wages determination and management of compensation systems. Moreover, ExxonMobil and Alltel have always been opposed to domestic partner benefits and nondiscrimination clauses related to female employees. In fact, most firm still have discriminating practices regarding the compensation policies.

However, most firms have acknowledged the importance of these laws in the determination of workers’ wages (Zeidner, 2009). In fact, companies such as IBM have put in place policies and programs that utilize the state and federal regulations that harmonize the workforce wages across departments and branches worldwide. Such companies have incorporated such practices in their corporate culture and have resulted into an increased competitive advantage (Vance, 2012). Essentially, employers have appreciated the need to incorporate laws and regulations in the determinations of workers’ wages as well as the manner in which such rules and regulations have influenced the workers’ wages.

Whether Laws Interfere with or Complement an Employer’s Pay Plans to Recruit, Motivate, and Retain Employees

Whether federal or state laws interfere with employers pay plans is a matter of debate. While most firms agree that the newly legislated labor bill have a profound effect on their pay plans, some argue that such legislations support their compensation policies. In fact, the disturbances created by newly legislated acts are anticipated since firms are prepared before such regulations are enforced (Simon et al., 2007). Firms are required to make adjustments depending on the needs of anticipated statute. However, laws interfere with the firm’s payment plans. For instance, firms have to make adjustments by increasing or decreasing payments based on the regulations of the statute.

Within the current competitive environment where costs are highly considered, most of the federal and state laws interfere with the manner in which salaries and employee benefits are applied (Chen & Hsieh, 2006). Most firms would tend to use compensation as a method of employee motivation and retention. Factors that tend to interfere with the modes of compensation greatly influence the motivation and retention practices of firms.

Besides, under the circumstances that the minimum wage is raised, firms would tend to limit the number of employees in order to reduce costs related to wages and salaries (Chen & Hsieh, 2006). Moreover, under such circumstances, the firm would tend to recruit a highly skilled workforce that is efficient and highly performing in order to increase the chances of attaining the organization goals. Generally, state and federal laws greatly influence the manner in which employers utilize wages and salaries to recruit, motivate and retain employees (San et al., 2012).

Besides laws that are connected directly to minimum wages, non-discriminatory statutes also influence the manner in which payment plans are utilized to recruit employees (Atkinson, 2009). For instance, most firms utilize the equal pay act to recruit and appoint women employees in senior positions. In fact, the Equal Pay Act (EPA) has always been applied to increase the number of female employees within an organization. Moreover, the Fair Labor Standard Acts (FLSA) has been applied to motivate employees particularly found within the low cadre of the organization structure.

Conclusion

Generally, the state and federal legislations as well as court rulings affect the manner in which firms compensate employees. In fact, the statutes ensure that workers receive their salaries and benefits depending on minimum wages. In essence, laws and regulations have a greater effect on the level of wage workers receive particularly by ensuring a level minimum and the elimination of any form of discrimination in relation to compensation within the workplace environment. Moreover, the laws and regulations provide a benchmark of human resources practices that ensure equal pay and compensation among workers.

References

Atkinson, W. (2009). Filling in around the edges. HRMagazine, 54(11), 55-58.

Chen, H., & Hsieh, Y. (2006). Key trends of the total reward system in the 21^st century. Compensation and Benefits Review, 38(6), 64-71.

Conneely, B. S. (2005). Court rejects EEOC rule allowing employers to give retirees 65 or older health benefits that are inferior to those given to younger retirees. Employee Benefit Plan Review, 59(12), 27-28.

San, O. T., Theen, Y. M. & Heng, T. B. (2012). The reward strategy and performance measurement. International Journal of Business, Humanities and Technology, 2(1), 211-223.

Simon, T. M., Traw, K., McGeoch, B., & Bruno, F. (2007). How the final HIPAA nondiscrimination regulations affect wellness programs. Benefits Law Journal, 20(2), 40-44.

Vance, C. M. (2012). Managing a global workforce. New York, NY: M.E. Sharpe.

Zeidner, R. (2009). Handle with care. HRMagazine, 54(11), 22-28.

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