Sap Success Factor Compensation Case Study

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Section C
C1. The SAP SuccessFactor Compensation
Pay for performance structure is critical to business overall performance. It is one of the effective ways that a firm can motivate its employees to improve their effort and remain loyal to the firm. As noted earlier, the pay for performance influences the labor supply and demand curve to create a competitive labor market. Two exemplary companies in Singapore that have managed to attract employees and retain high performance are SAP and ChapmanCG. The SAP, an IT and software firm, for instance, implements the SAP Success Factor compensation, a program meant to align compensation with the firm’s goals in order to retail qualified and talented employees (SAP 2016). This compensations program …show more content…

In essence, a high wage rate helps in balancing the labor supply and demand curve. For firms that implement high wage rate or incentive and award program, they are never in low supply of labor and this is because most workers are looking to work in such firms. These firms also benefit in term of low rate of turnover, increased loyalty and commitment to the firm, motivated employee, high performance, and less work-related disputes that could lead to litigations. Firms should understand that incentives should never always be in the form of monetary compensation. As highlighted before, compensation can be in the form of structured or casual incentives. The firm can integrate both forms of incentives in order to maximize on their initiatives. In addition, firms should integrate performance evaluation system that will help them provide the right incentive. When providing remedies, formulating regulation and laws, or when bargaining agreements for involved parties, the FWC should consider the significance of pay for incentives and apply this accordingly. Also, the FWC can offer advise to involved parties when it comes to setting work place

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