PTO: Too Little or Too Much? You just finished analyzing information for the cur
ID: 369416 • Letter: P
Question
PTO: Too Little or Too Much?
You just finished analyzing information for the current compensation and benefits program. You find that some changes should be made, as the majority of employees (you have 120 employees) are not happy with what is being offered. In fact, the plan had not been revised in over fifteen years, making it dated and definitely ready for some changes.
One of the major points of contention is the PTO the organization offers. Employees feel the current system of sick time and vacation time offers too few options. For example, one employee says, “I often come to work sick, so I can still have my vacation time for my vacation.” Another employee says, “I have given nine years to this organization, but I receive only three days more than someone who has just started.” Here is the current PTO offering:
1+ year 7 days
5+years 10 days
10+ years 14 day
1.What cost considerations would you take into account when revising this part of your compensation plan?
2.Propose a new plan and estimate the cost of your plan on an Excel spreadsheet. Be prepared to present to the board of directors.
Explanation / Answer
1. there should be some variable incentive plans for this firm. similarly employees who have more seniority in the firm should give little benefit than new hires. in this regards, it is better start with payment of wages to the work to offering special leaves, perks, incentives and other benefits.
to the long serving people, the benefits would be more, some additional leaves without loss of pay, some vacation leaves with their family, some sick leaves etc. when it comes to new comers, the kind of proposal must link with their productivity levels. if they reach a benchmark production level, they will be provided some benefits, and if the out performed, they must provide some additional perks than others.
one thing is clear, performance based incentive is acceptable in the firm, here performance only speaks not seniority or not other factors.
2. when the incentives are higher, the cost to the firm also higher. as already told that the performance incetive system is appropriate here. the additional costs includes extra leave facilities to employees, additional incentives to benchmark employees, additional perks in terms of food coupouns, small surprise gifts to the extraordinary employees etc.
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