Abstract
Due to the entrepreneurship of Taiwanese, there are large number of SMEs are established in Taiwan. SMEs accounts for up to 98 percent of total number of enterprises in Taiwan. When we talk about machine industry in Taiwan which contribute large number of GDP and export value are composed of many SMEs. We must mention hundreds of satellite factories which interact together to form the value chain network. To analyze those who work in satellite factories, we can discover that most of them pay their labor force and work in poor environment. So there are many young workers work for a short time and then leave. That lead to some satellite factories always lack of manpower and face high turnover costs. Compensation design is the other issue deserve to discuss of satellite factories. Most of these satellite factories design their compensation depend on years of work experience. That would lead to workers lack of motivation at work. The incentive effects occur only at the moment when salary increase due to worker work to a certain year. After a short time, the effects disappear. In order to solve two problems mentioned above, this paper use the method of case study to deeply explore recruitment and selection and compensation design about a machining firm which is located in Taoyuan. I make the following conclusions: 1. I suggest that if firm L want to recruit workers who have no related working experience by using newspaper as recruiting channels, it can use realistic job preview in newspaper advertising and introduce the candidate real factory working environment in the meeting. 2. About recruiting channels, I suggest that firm L can rehire formal employees. 3. About recruitment timing, I suggest firm L to select the year which receive lowest revenue in every five years a circle and do recruitment activity in the first six month, especially in February, to increase the number of candidates and enhance candidate quality. 4. About compensation design, I suggest firm L to take more communication with employees. 5. I suggest firm L to design compensation base on employee performance. Keywords: Recruitment and Selection, Compensation Design, Recruitment Channel, Recruitment Timing, Rehire