Assignment 3—Choosing Practice from a Range Choose the practice (from a range of ‘best practice’ models) that is the most relevant to the HRM issue you have identified. (It can be the same as...

Running Head: CHOOSING PRACTICE FROM A RANGE    1
CHOOSING PRACTICE FROM A RANGE         6
HUMAN RESOURCE MANAGEMENT
ASSIGNMENT 3—CHOOSING PRACTICE FROM A RANGE
TOPIC: ROLE OF COMPENSATION STRATEGIES IN EMPLOYEE RETENTION: WITH REFERENCE TO THE COMMONWEALTH BANK OF AUSTRALIA (CBA)
Table of Contents
Introduction    3
The HRM Practice of Compensation Strategies in Organisations, such as CBA    3
Implementation of Policies and Practices in CBA    4
Enactment of These Policies for Enhancing Retention Levels and Collective Performance to Eliminate Compensation Strategies Issues    6

Contribution of Compensation Strategies in Evaluating the Issue of Employee Retention and Framing New Ways in this Context    7
Reviewing and Critiquing the Prevailing Compensation Strategies in context of CBA with Justifications    8
Conclusion    9
References    11
Introduction
The Commonwealth Bank of Australia (CBA) currently stands among the top companies and it is one of the top “four pillars” of the Australian banking system. The assignment discusses some of the key instances relating to employee compensation at various levels in human resource management (HRM), which led to several problems such as low retention, shareholders discordance, customer dissatisfaction and ultimately lower brand value due to the mass effect of these issues. The issues include executive level pay disparity, withholding compensation of part time employees and compensating a particular set of employees unfairly at the expense of customers’ money.
The HRM Practice of Compensation Strategies in Organisations, such as CBA
As stated by Pepper and Gore (2015), with increased say of the shareholders in matters such as top executive pay, firms are in need to revamp their compensation structures with respect to the changing business scenario. The shareholders of CBA, in late 2016 voted down the company’s remuneration report over perceived undue bonuses passed on to its senior executives amid the various scandals and controversies it was already involved in. This represents a classic case of top executive bonuses disbursement disparity when the company faces a crisis. This move by the shareholders holds a serious affair because of the “two strikes” law, which clearly states that if more than 25% of the company’s shareholders vote for no in two consecutive annual general meetings of the company against the remuneration report presented by the management, all the board members have to be re-elected with the accused members not accountable to vote (The Conversation, 2016).
As mentioned by Moghimi, Zacher, Scheibe and Van Yperen (2017), having strong and transparent compensation structures is imperative for an organisation in order to achieve employee retention, customer loyalty and evade unnecessary problems in terms of regulatory compliances. The company found itself in the middle of a scandal accused of charging its customers for services for the services, which were not delivered. A big gap here lied on the part of the company’s human resource practices where the compensation of certain advisors did not specify their job responsibilities. The company was directed to pay $105 billion in total to its customers, which was immediately followed by the executive bonus issue. Among all the banks accused, CBA is particularly lagging in the payments until date, shows the amount of turbulence it is facing due to the incorrect compensation practice (ABC News, 2016).
As stated by Chen and Jermias (2014), contractual workforce in an organisation must be treated with equal importance as the permanent employee base when it comes to deciding the compensation structure. The company just after the above-mentioned two controversies was accused to rip off close to 7000 of its contractual workforce of its superannuation stipend for around eight long years. The company faced widespread backlash, as majority of this workforce constitutes women, who even did overtimes and extra days to cover for inadequate staffing in various departments across the company. Superannuation entitlements enable an employee to ensure financial stability post retirement, along with several other incentives. These were completely ignored, which was later admitted by the bank. This represents a clear negligence of regulatory compliances with respect to the compensation structures for a particular set of employees and how it could be detrimental for a company (Business First, 2017).
Implementation of Policies and Practices in CBA
A well-crafted senior executive compensation plan not only ensures talent attraction and retention but also links the pay and bonuses to long-term goals of the company, which is always welcomed by the shareholders and investors as well. CBA must have adapted certain precautions in its approach starting with using performance metrics linking the bonuses. As supported by Darma and Supriyanto (2017), for this, SMART approach, which stands for specific, measurable, attainable, relevant and time-bound, must be followed, which would have avoided any disagreeable instances. These key performance indicators must have been clearly communicated to the shareholders in the annual remuneration report, along with advance intimation, to the concerned executives. The compensation plan must be made with respect to benchmarking with similar job roles in the United Stated since the bank is competing on a global scale and hence take into account both long term and short-term incentives, in line with the globally followed practices.
All the companies must recognise the need to review their employee benefit policies regularly at all levels in order to ensure maximum employee satisfaction and adherence to regulatory compliances...