Use of compensation and incentives is an importance practice in HRM as it has the following advantages. First, to many employees, the basic purpose for joining an organization is to secure a pay. The value placed in such a pay and not necessarily the amount/size motivates the employees more, and as result higher productivity levels are reported. Second, compensation facilitates hiring, retention, promotion and evaluation of the workforce. Without mentioning aspects of compensation, the HRM office might find it impossible to convince people to join the organization to work or even the existing employees to assume higher responsibilities (Armstrong, 2006). Third, compensation displays legality of a contract/employment. For a contract to be valid there has to be a consideration, which is partly what a pay or remuneration package serves. Compensation, especially bonuses, which practice sharing of profits with the employees, creates a sense of belonging to the employees. This is extremely important in securing employees’ loyalty during hard times in managerial practices.

In addition, compensation assists in valuing an organization as well as determining its future. Once the HRM office is capable of properly remunerating workforce, the employees are almost assured of their organization’s survival. Usually, when an organization is going under receivership, employees are the first victim as there is reduced employee compensation, which may in acute scenarios deny them their basic livelihood. Finally, compensation and incentives are the easiest motivational practices available for use by the HRM. This is because compensation is directly linked to employee’s welfare more than the improvement of working conditions (McCoy, 1999).

HRM at Coca Cola Company

Coca Cola Company is one of the leading beverage production companies. The firm that traces back its existence in 1886 ascribes to the philosophy that, it is people and not technology cre