Compensation And Benefits Strategies Recommendations Essay

Compensation And Benefits Strategies Recommendations Essay

1360 WordsFeb 7th, 20156 Pages

Benefits and Compensation Strategies Recommendations
TEAM B: Ben F. Soares, Thomas Manning, Zoua Yang, Ziad Shamma
HRM 531 David John Stocker
Benefits and Compensation Strategies Recommendations
Introduction:

Market Evaluation:
When constructing a benefits and compensation strategy, it is important to understand what companies in comparable markets are providing to their employees. For our company, Clayton Commercial Construction, who wants to open up operations in Arizona, it means looking at what other construction companies in and around the state of Arizona are providing as compensation and benefits. Clayton currently employees 650 people in the state of Michigan and is looking to add 130 people (20% increase in headcount)…show more content…

Rewarding performance will motivate employees to continue their good performance or adjust bad performance.
Correlating performance with pay ensures that rewards are only given to employees who operate at a high level
Since this structure encourages employees to perform at the best of their abilities, management will get the most out of its resources. This becomes doubly important in the construction industry where resources, including budgets, materials, and timeframes are limited.
A skilled-based pay structure would be less beneficial because it makes it difficult to do market comparisons, and it would also require the company to keep track of all the skills that every employee has. This in turn would increase cost in the long run, complicated and not time effective (Hausser & Lebing, 1996). Time-Based pay structure promotes loyalty to the organization since promotions and increases in pay are based on the length of times the employee is with the organization, but the disadvantages outweigh the positive. For example, this compensation structure sends a message that performance does not matter, which in turn, will cause top performing employees to seek employment in other companies that will recognize their contributions (Hausser & Lebing, 1996).
Position in the Market:
Considering that Clayton has 650 employees and wants to add another 20% in the state of Arizona, and with net income at $10 million, this would put Clayton as a

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Strategic Compensation Plan Essay

There is a clear business case for strategic compensation. Well managed rethinking of performance management, rewards and benefits leads to better business results, stronger capability, higher staff retention levels, heightened motivation and employee satisfaction. The success stories of organizations leading the field in strategic compensation prove that how employees are motivated, rewarded, recognized, fulfilled and challenged to perform better is a key differentiator between excellence and plain mediocrity.

One of the best ways to keep employees from walking out the door is to pay a higher salary. Paying employees more in salary, however, won't necessarily align them with the company's priorities. In order to do that, companies need to adopt a compensation program that gives employees incentives to achieve the company's goals. The challenge is designing a plan that will accomplish the desired result (Designing, 2007).

From top executives to entry-level employees, compensation plans are integral to attracting, motivating and retaining employees. It's often a factor that sets a company apart from its competitors. While most businesses understand the benefits of a well-designed compensation plan, the development of a successful program can be a daunting and complex task. Several recommendations for an updated compensation and benefits program for Plastec will be discussed.

Paul should begin by updating the company's job descriptions and job specifications. After this initial step, his next move should be to value his jobs. This can be completed through a job evaluation, which is a formal, systematic means to identify the relative worth of jobs within an organization. Since he is creating this compensation plan for one type of job, the machine workers in the company, he should focus on the knowledge and experience it takes to perform the job. Other factors that should be considered are the safety and hazards of using the machinery, whether or not specialized equipment requiring special training will be used, and the working environment of the employees using the machinery.

Next, Paul will need to conduct a pay survey for this particular position or positions if different machinery is sued and different levels of knowledge or experience are needed. At the same time he can also complete a private survey to determine what types of benefits other employers in the same industry are offering and to find out what types of benefits are attracting and retaining employees. The surveys will give him the information on compensation rates and benefits for workers performing similar jobs for other companies. Using the information from his pay survey, Paul can create his pay structure. During this process, he may find it easy to establish pay grades to those jobs having...

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