More on Compensation

Compensation needs to be based on more human aspects like fairness, purpose, transparency, emotional intelligence, etc.; at the same time, base pay is still important.
Most employees like working for organisations that have an ethical corporate culture that has a meaningful purpose like support for corporate socially responsibility, etc. Other factors of importance include
    - displaying transparent leadership
    - fairness in compensation
    - flexibility in the workplace
    - offers of lifestyle incentives
    - interest in stakeholders' well-being (physical, emotional and mental)
    - lifestyle balance, etc.

NB There is a limited shift in compensation based on team performance rather than just individual, ie
"... A team's success can be measured by qualitative performance, such as how effectively it works together, how it lives the companies values as well as qualitative performance in terms of market penetration achieved, financial targets hit, etc..."
PWC as quoted by Enrico Mestieri, 2021

Co-operative compensation systems work well when people are working dependently, while competitive compensation systems work well when people are working independently.
With a team-base performance, you need to be careful of competitive behaviour amongst the teams that could negatively impact the overall performance of the organisation, ie competing teams could put their own goals ahead of organisational interests.
Businesses and governments need to develop a better understanding of their stakeholders', (especially employees'), lives and needs.
Recently it has been established that
"... Direct bonuses and incentives are no longer the best solution to increase employees determination, involvement and dedication..."
Enrico Mestieri, 2021

Hiring on attitude rather than academic skills

Bias
- illusionary superiority (people with no knowledge of the topic will tend to overestimate their capabilities to handle it, whereas those who have limited knowledge will be more realistic in evaluating their capabilities.
- individual attractiveness (senior management members' facial attractiveness can have a positive impact on compensation)
NB There are many conscious and unconscious biases, especially around gender and race (ethnicity, religion, etc)
Around gender, there are 3 factors that especially emerge
i) female executives receive a lower share of incentive pay in total compensation, relative to males
ii) the compensation of female executives displays lower paid performance sensitivity, relative to males
iii) compensation of female executives is more exposed to declines in firm value and less exposed to increases in firm value, than that of males
(main source; World Economic Forum as quoted by Enrico Mestieri, 2021)
"...as for racial pay gaps, studies have found that black workers earn just 75% of white workers compensation in the United States, with the Hispanic female population being in the last percentile..."
Pew Research Centre as quoted by Enrico Mestieri, 2021

NB Issues not taken into account in payment disparities include over-qualification for positions, historic opportunities in restricting promotion, etc.
There should be more focus on the value candidates bring to the organisation and less on using salary history in the hiring process.
Compensation-related biases
Inability of compensation systems to handle bias: be aware of incompetents and their modus operandi in the working environment. Many will
    - exploit the good work of others
    - take credit for other's good work.