Answer to Question #315378 in Management for Mixit

Question

Togo Motors is a top automotive manufacturing company and has just completed wage

negotiations with the union representatives of their staff. The company employs HR staff,

machine operators, technicians and engineers. The management and unions agreed on a basic

salary of R60 000 and an across-the-board increase of 8.36% with effect from the following

month of that year. However, the employees are dissatisfied with the across-the-board increase

and the implementation of team-based incentives.

Outline the reasons why Togo Motors needs a favourable compensation system to

accomplish its goals and create a stable work environment.

Answer 1

Attracting Top Talent

People are always looking to put themselves in the best possible position financially

Increased Employee Motivation

Properly compensating employees shows you value them as workers and as human beings

Boost Employee Loyalty

When employees are being paid well and are happy, they're likely to stay with the company

Increased Productivity and Profitability

Happy employees are productive employees. Productivity in relation to compensation starts with employees feeling valued which increases motivation and loyalty

Job Satisfaction So People Stay

Creating the right compensation plan leads to stronger job satisfaction