Compensation Strategies Essay

Executive SummaryThis report result look at 3 different remuneration systems that our company atomic number 50 develop and roll out within our company for our employees and prospective employees. allowance is one of the about definitive and recognise factors for our employees. Employees rely on their compensation to pay their rent or mortgage, food for their family, vacations, education for their children, and prepare for their solitude life. How compensation is paid merchant ship determine the tone of employee you obtain and how yen you retain them. This report provides information on different compensation strategies to collect/recruit good talent, improve employee production and retain comfortd employees. Annual deservingness join ons help companies to continue being competitive in the work force. search targets employees want to work for employers that are competitive with salaries. By lamentable to an one-year merit increase system employees will continue t o increase production and receive business objectives to cope with more compensation. Employees look at merit increases as entitlement and production crapper remain flat. Our company can increase productivity crosswise the board by tying business name and addresss to merit increases.In lodge to get the production ingested, communication from recognisement will need to take mystify to set expectations of achieving goals and what the possible merit increase the employee can receive by hitting those goals. health care benefits can be a deciding factor for many people on whether or not they count functional for our company or if they decide to leave our company. Health benefits provided by the employer shows they careabout the employee and it helps get the employee back to work quicker which helps to be more productive. Healthcare is not only a benefit to the employee but to a fault part of their compensation. Communication and training by management should be conducted annua lly to go everywhere the employees full world-wide Compensation Package to show the bring monetary amount received by the employee from the employer. The last type of compensation we will consider for the employees as a company is a 401(k) plan. 401(k) plans are growing with the number of employers that are providing options for their employees.As the explore shows, the cost of losing an employee in the long run due to not providing a 401(k) plan can create utmoster turnover and training costs. We want to recruit and keep top employees and based on the research shown, providing a 401(k) plan will do what we need. My recommendation is to implement the annual merit system, health care benefits and a 401(k) plan. For the compensation packages to be a achiever we will create compensation statements for every employee to review and train all managers with direct reports so they can deliver the great message we require to share. Also, goals and expectations will be implemented as early as possible during the year to establish a strong foundation for performance. Our compensation plan is intended to disembowel key talent, increase employee engagement, incent and retain high-performing managers who will enhance the profitability of our company and create value for our shareowners.IntroductionCompensation is an important element of our company. Employees rely on their compensation to pay their rent or mortgage, food for their family, vacations, education for their children, and prepare for their retirement life. How compensation is paid can determine the tint of employee you obtain and how long you retain them. This report provides information on different compensation strategies to attract/recruit good talent, improve employee production and retain valued employees. Also, with sales saturation goals to increase, technology and innovation changing so quickly, and the quality of service customers are expecting, employers have to come up with ways to be melio rate than their competition. The way to be break dance than your competition is through the people who work for the company.And one the best(p)ways to attract those employees are to have a better compensation packages for your employees. The goal for this research will show you the positive impacts to the company by offering Annual deserve Increases, Healthcare Benefits, and 401k plans to the employees. These compensation benefits are important to high quality employees our companys trying recruit, retaining high producing employees, as well as, increasing motivation and production with all other(a) employees. By implementing these actions our company will be able to show our employees our commitment to be the best company to work for and to show how valuable our employees are to the company. search FindingsMerit Pay Increase agree to Towers Perrins Global workforce study, competitive base pay is the most important factor that attracts UK workers to an employer, with almost six- out-ten (59%) respondents stating that this would influence their decision (Competitive base pay, 2007, p.16). non only is it important to attract workers but retaining high performing employees and keeping them motivated to increase and maintain productivity to compete in the marketplace is vital. angiotensin-converting enzyme way to retain and motivate employees is through annual merit increases. If a merit pay system succeeds, it motivates employees to work harder and achieve more (Mack, 2014). In order for the merit pay system to succeed it will need to be tied in with the business strategy of the organization and not viewed as an entitlement. Merit increases can motivate employees to achieve whatever goal the company sets. For example, by finishing projects timely with high quality or rolling out newfound operational procedures for the company. Employees often fail to see a link between merit pay and the accomplishment of business goals because no link is being make (Heneman , 2002, p.382).In a Supervisory case is important direct reports understand how their individual goals align to organizational priorities and how merit increases are earned based on exceeding their given goals. Planning and Goal Setting is the foundation for performance management and execution of our strategies. It focuses on ensuring employees have a fair understanding of annual organizationalpriorities, and defining individual employee goals aligned to their descent role and those priorities. Finally, it is important that effective communication exists between employees and management and that managers have the requisite tools for administering rewards (Leritz Ph.D., 2012, p.1).Analysis Research shows employees want to work for employers that are competitive with salaries. By moving to an annual merit increase system employees will continue to increase production and meet business objectives to receive more compensation. Employees look at merit increases as entitlement and pro duction can remain flat. Our company can increase productivity across the board by tying business goals to merit increases. In order to get the production needed, communication from management will need to take place to set expectations of achieving goals and what the potential merit increase the employee can receive by hitting those goals.Healthcare BenefitsAccording to Competitive base pay most important for recruitment (2007), almost two thirds (59%) of staff would consider leaving their job if their employer failed to address health and wellbeing in the workplace. Business in the Communitys Business action on health campaign shows that 83% of staff considers the way that an employer looks after the health and wellbeing of staff is important when choosing a job (p.16). Effective communication from employers about the compensation plans has a major influence on the turnover rate of the top performing employees. Because one companies benefits are better than the other doesnt mean e mployees will stay. Based on the surveys conducted, companies with better communication strategies and lesser benefits had only 12% turnover compared to 17% turnover with companies that offered better benefits. Companies with excellent benefits and effective communications had only an 8% turnover of top-performing employees. Also, when employees were surveyed on how satisfied they were with their benefits, only 22% were satisfied with the better benefits from employers with poor communications. On the other hand, 76% of employees with lesser benefits and effective communication from the employers were satisfied with their benefits (Better benefitscommunications, 2005, p.9).Companies essential show the employees that healthcare benefits are a part of total compensation because companies that jadet effectively communicate the value have higher turnover rates for top performers. According to Kathryn Yates, global director of communication consulting at Watson Wyatt, Employers can spe nd huge sums of money on benefits, but if their employees arent aware of the cost or dont appreciate the value of the benefits, they arent tone ending to see a return on their investment. (Better benefits communications, 2005, p.9).Analysis Research shows the enormousness of health benefits to employees and what it takes to retain those employees. Health benefits provided by the employer shows they care about the employee as well as it helps get the employee back to work quicker which helps to be more productive. Healthcare is not only a benefit to the employee but also part of their compensation. Communication and training by management should be conducted annually to go over the employees full Comprehensive Compensation Package to show the total monetary amount received by the employee from the employer. This communication and training on healthcare benefits are vital to keeping our top performers.401(k) PlanThe increase of matching contribution for 401(k) plans through employe rs has risen from 68 percent to 73 percent over the last couple of years (Plenda, 2013, p.31). In a recent survey, if other employer offered a similar job with a 401(k) plan, 40 percent of employees said they would pursue other opportunities with the new employer. It was also determined when a 401(k) plan is presented most employees work harder and stay on the job longer (Lamont, 2014, p.10). People who save money are good workers because they place greater value on future outcomes. These types of employees work more and are more conscientious of how they treat employer assets because they understand their reputations will be hurt by careless actions they take. Not only do employees stay on the job longer but companies can use 401(k) plans to attract workers that are more conscientious and productive on the job (Munnell & Sunden, 2004 pp. 3-20).Research by Bank of America MerrillLynch shows higher turnover rates, increase in training costs, and lower productivity and sales as a pot ential consequence for not offering a competitive benefits package to its employees. Employers should look at benefits as one of the most important investments they can make. These investments will attract top talent and show they are invested in their employees professional growth, as well as, their financial well-being to give them a competitive advantage over other employers (Brooks, 2012).Analysis 401(k) plans are growing with the number of employers that are providing options for their employees. As the research shows, companys not providing a 401(k) plan can lose employees to competitors, lose productivity and sales. We want to recruit and keep top employees and based on the research shown, providing a 401(k) plan will do what we need to help increase our advantage of attracting and keeping top talent over our competitors. testimonialsOur companys compensation plan is intended to attract key talent, increase employee engagement, incent and retain high-performing employees who will enhance the profitability of our company and create value for our shareowners. Below are the recommendations to begin implementing merit increases, healthcare plans, and 401(k) plans to our employees. These actions will align particular proposition goals to our organizations priorities and enables us to execute its strategies to deliver exceptional compensation packages to our employees.Recommendation It is recommended to establish goals and expectations every year to ensure employees have a clear understanding of annual organizational priorities and their defined individual employee goals are aligned to their job role and those priorities. Managers will meet with each of their respective employees to communicate their goals and expectations and have the employees sign and approve understanding. On February 15th, annually, managers will meet with each employee to discuss results and give feedback on achievements, strengths, areas of opportunities, and merit increase theemploye e will be receiving on their work 1st paycheck. By implementing a merit increase we will increase employee engagement, incent and retain high-performing employees who will enhance the profitability of our company and create value for our shareowners.Recommendation My recommendation is to set up health care benefits with United Health Care and contribute $500 per month towards employees costs. Additionally, implement a Comprehensive Compensation Package to be presented and reviewed by the manager to the employees at their annual merit increase to show them the rich compensation they have with the company. The Comprehensive Compensation package will give a personalized overview of all components of the employees compensation and cash value of the benefits available. By communicating with the employees, we will see an increase in retention and satisfaction that will decrease our company costs and increase profitability.Recommendation My final recommendation is to set up Fidelity to ma nage the employees 401(k) accounts. In addition, the company will match 3% of the employees contributions and will schedule yearly financial seminars with Fidelity for financial guidance and retirement advice. During yearly reviews, managers will be present the Comprehensive Compensation Package to give an overview of all components of the employees compensation and cash value of the company matching. By providing a 401(k) plan and financial guidance we will attract top recruits, as well as, retain top employees.ConclusionMy goal for this research is to show you the positive impacts to the company by offering annual merit increases, healthcare benefits, and 401k plans to the employees. These compensation benefits are important to recruit high quality employees, retain high producing employees, and increasing motivation and production with all other employees. By creating annual merit increases, employees are more productive and try to reach the highest increase they can get to add t o their salary. Adding the companys business objectives to the merit increases for the employees to reach will addincreased productivity to the company. Adding healthcare coverage for employees and communicating with them the value added to their compensation is important to retaining employees. Employees with healthcare also go to the doctor more often and come back to work quicker which means less waste time and higher production.Lastly, introducing a 401(k) plan to the employees creates long lasting and loyal employees that are vested in the companys success. The findings show the importance of pay to employees and the importance of attracting employees to a company. Also, employees work harder which will make the company more profitable. Planning, goal setting, communication. The importance of the findings for healthcare is employees are will to leave their company if employers dont provide healthcare benefits. Shows communication is very important in making sure employees unde rstand the benefits to make sure they dont leave. Shows increase in businesses providing 401k plans and attracting hard workers.shows how important benefits are in keeping and attracting employees. Work harder and stay on the job longer How important it is to show benefits are part of compensation to show the value and keep top performers.Communication is going to be the fundamental key to getting the buy in and positive reactions to implementing these compensation benefits. The best merit increase plan, healthcare plan, and 401(k) plan can generate positive employee reactions or a negative employee reaction. The actual effect depends on whether these plans are mum and accepted and whether employees perceptions of the facts are positive. Finally, it is important to make sure we keep pace and understand what other organizations benefits are to their employees and we stay competitive to them, we also remember the employees must understand the benefits and buy in to them to be success ful.ReferencesBetter benefits communications can help to improve retention. (2005, April). Managing Benefits Plans, 5(4), 9. Retrieved from http//eds.b.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=5&sid=09c97eff-2de5-4526-9558-66dcdfc85554%40sessionmgr114&hid=110 Brooks, C. (2012). Monetary benefits play increasing role in luring workers. BusinessNewsDaily, Retrieved from