Total Compensation Benefits

Employees are driven by a numerous motivators to stay in the company, but the biggest is simply getting a regular paycheck. Ensuring that the compensation system is effective is not just important but critical. A few organizations evaluate their compensation system to identify any shortcomings. It is always important to look at how the organization can improve its compensation strategy to attract the best candidates who can innovate and lead the company in the industry. In order to retain high performing employees, the compensation plan should offer more than just a competitive salary. A good example is Costco and Walmart, on the benefits side, 82% of Costco employees have health-insurance coverage, compared with less than half at Wal-Mart.

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

2) An inappropriate way to assess the acceptability of a job evaluation plan and its

In a free market, such as the one used in the United States of America, competition between companies is cutthroat as businesses look for every possible way to have the edge over competitors. One of the major ways that businesses stay ahead of the competition is attracting and retaining the most talented employees. It is common practice for companies in the United States of America to provide several non-wage compensations to employees with the aim of sweetening the employment and reducing turnover (entrepreneur.com, n.d). Employees have come to appreciate the benefits offered by companies and consider benefits just as important as their salary.

Compensation strategies within a company are very important. Companies need to invest in offering compensation benefits to their employees because they enhance an employee’s wiliness to stay long term with the company. They also provide a positive foundation between the employee and employer. If an employee is happy and content with the company they work for then this will benefit the company and the employee. The employee will be motivated to do a good job for the company and in the long run the extra money and work that the employer puts in for the added benefits will pay off. In this report you will see how Paid Time off (PTO) , bonuses and merit pay increases will benefit not only the employee but the business.

It is believed that compensation plans are a legitimate way to express appreciation in employee’s productivity and efforts and an excellent way to retain employment. Some of the main reasons to institute a compensation plan are (Vivekanand, p.2):

The objective of any compensation system is to attract, motivate and retain good employees. The most common bases for pay used in most companies are; Seniority or Longevity Pay and Merit Pay. Seniority and Longevity reward employees with periodic additions to base pay according to employee’s length of service in performing their jobs. There are differences between these two pay systems. For example, seniority rewards employees’ for the amount of time working with the company. In contrast, longevity pay rewards employees who have reached pay grade and who are not likely to move up in the company. Merit pay rewards employees with incentive increases according to their job performance. Rewarding employees for their job performance will motivate them to keep performing at high level and will help employers retain its best employees to a successful company. Campbell soup uses both pay systems. Campbell Soup strives to keep their employee’s; they reward them according to their contributions and job performance giving to the company. For example, employees were rewarded for helping build Soupy Park made of recycled materials. Being a large manufacturer Campbell Soup has several components to its compensation program. These components are as follow; Base salary, performance- based annual incentive compensation, long term equity incentive compensation, pension and

Despite the importance of benefits to the compensation area, there has been relatively little empirical research on employee attitudes concerning benefits. For example, it appears that employees tend to undervalue their benefit packages and to underestimate the costs incurred by employers (Wilson, Northcraft and Neale

Compensation is a form of pay and rewards received by employees on the basis of their performance. Compensation divides into two parts: direct and indirect compensation. Direct compensation includes employee wages and salaries, incentives, bonuses, and commission. Indirect compensation includes employee recognition programs, rewarding jobs, organizational support, work environment and flexible work hours to accommodate personal needs (Belcourt et.al, 370). “Wal-Mart” is the biggest retail and grocery chain in the world. Currently,

Employee benefits are seen as values incentives that will retain their employees (Ambrose, 2012). If employees are willing to accept a reduced salary, they must be rewarded with additional benefits to help them save money (Ambrose, 2012). Some organizations, like for-profit organization, believe in reward top managers for their hard work and intentionally forget about the larger group of individuals who help administer the organization (Ambrose, 2012). Like any employer, employees are interested in making a good salary and saving money on expenses that could be reduced through employee benefits (Samuel,

According to WorldatWork, the key elements to Total Rewards are compensation, benefits, Work-Life effectiveness recognition, performance management and talent development. All of these elements are key to the success of an organization because if the employees are engaged, they are willing to work hard and put their efforts and talent towards the overall success of the company in which they work. Total Rewards should be used as a strategy of any company to generate a strong workforce of the right people, in the right jobs, at the right time, who are loyal and motivated and want to do the right things in order to contribute to the success of the organization,

* It enables the organisation to attract and retain the individuals. Most of the time organisations use a total reward approach: attractive basic or contingent pay, attractive benefits such as holiday, healthcare, shares… and non-financial rewards such

Practitioner’s Guide to Total Rewards and Compensation By: Alix Echeverri April 2013   Table of Contents Executive Summary 5 1. Job Analysis 6 1.1 Definition of the key ingredient/activity 6 1.2 Rationale of its importance 6 1.3 Potential impact on organizational outcomes 7 1.4 Organizational symptoms that suggest that the function is not being performed correctly 7 1.5 Key descriptive models 8 Figure 1.1 – Decisions in Designing Job Analysis 9 1.6 Key steps in executing the prescribed models, processes or techniques 9 Figure 1.2 – Start of a Job Analysis 11 1.7 Issues that could prevent this function from being successfully executed 11 1.8 Critical success factors/activities that must be completed in order to

Most companies offer compensation plans to attract and retain the best employees resulting in high level of performance to make a strong and positive work environment. The largest expense for most companies in today’s competitive market, it’s the payroll and any other costs related to rewarding the employees. A well-structured compensation plan consists of, pay scale; how much they want to pay their employees and most important, what type of employees the company wants to attract? Reward programs (incentives and bonus pay), benefit packages (health insurance, 401k plans and paid time off), and company perks such as; wellness programs, tuition reimbursement, and child care services. The company needs to be competitive both in the labor market

The total compensation and benefits strategy of the company should place an emphasis on compensation through incentives with a reduced fixed labor cost. If the company is successful, employees receive additional compensation and if the company is experiencing difficulty gaining a market share or if there is an economic downturn, the company has a reduced labor cost (Cascio, 2013, p. 420). The company should not use pay grades because of hybrid positions and maintaining the flexibility to modify job descriptions to fit the needs of the