BA 2650 Compensation Management- COURSE PROJECT Overall Guidelines: This project
ID: 382991 • Letter: B
Question
BA 2650 Compensation Management- COURSE PROJECT Overall Guidelines: This project is designed to be a comprehensive learning experience for students. The final outcome of the project will be an overall compensation program for an organization including both direct and indirect compensation. For purposes of this project, you are the Compensation Director of the organization. The Organization: For purposes of this project, you will use a fictitious organization but will provide details about the organization as listed in the "Plan Guidelines" outlined here. Assume that the organization is two (2) years old and currently has seventy (70) employees. The organization is in a growth stage and plans on expanding. Within the next year, the staffing plan calls for as many as 200 total employees. any assumptions you need to about the organization; for example, you will need to decide the industry, the company philosophy, the mission/vision, the top management leadership style, the location, organization. T should be aligned with the organization's strategies. It should be designed in a way that solves business problems (or prevents potential problems) for the organization. Part of the evaluation of your plan will focus creative you are in solving current and potential business problems. the demographics. You may have other assumptions you want to make about the he assumptions you make are critical -remember, your compensation plan on how well the plan aligns with the organization's strategies and howExplanation / Answer
Introduction:
Compensation policy is a critical and crucial part which decides the reputation of a company in terms of recruitment and employee satisfaction. A good compensation policy gives a good reputation to the company such that people will be wanting to get an opportunity to work in that company. When the compensation policy is bad, even the employees will be wanting to leave the company. So branding of any company is also decided by the policy it follows with regards to compensation given to their employees. Similarly recruiting is affected by this policy as people should be willing to take up the job. Employee retention will demand changes in the compensation policy and the company might have to oblige to it. So compensation policy is a very important factor in deciding reputation of a company.
A compensation philosophy impacts employer branding in the following ways:
1.For a customer, the more the retained employees, the more they are satisfied, hence the customers can expect better service due to experienced/ talented employees and hence the employer is a good one
2.For a competitor, it is difficult for them to get employees from this company, because they are valued more by their current company. So the employer is a great one.
For e.g: The compensation philosophy of Facebook is as such that very few employees leave their organization. This also suggests that the company is a good one for employees.
A compensation philosophy affects recruiting in the following ways:
1.More employees would like to join you, given a strong compensation philosophy.
2.They may prefer to join you with fewer benefits allotted to them.
3.You will have more and talented options to choose from.
A compensation philosophy affects retention in the following ways:
1.Lesser attrition rate with good compensation philosophy.
2.More stable workforce.
3.Employee development can be planned more effectively.
In Performance Appraisals and Compensation, the Scope of survey refers to the set of the target audience who evaluates organizations performance on various categories like People, Performance, Process, Stakeholders etc., The compensation & benefits covers both direct and indirect benefits. The factors that affect the scope of the survey are as follows:
Employee Satisfaction: This is also referred as ESAT which is one of the significant factors for organizations having highly talented and productive workforce. Staff who are stressed, will not be productive and they are likely to be unhealthy and their motivation levels are low.
360 Degree Feedback: Performance evaluation of an individual from his/her supervisor, peers, cross-functional managers, team members, functional staff etc., Such feedback gives holistic picture and development of staff.
Talent Development & Training: Providing ongoing training, refresher training, need-based training, job enriching training are some of the key factors of developing talents through training.
The salary, wage, reward or compensation agreement is based on the key business levers which are also called the key performance indicators (KPI’s) of the business. It covers major elements linked to performance and the corresponding merit, pays for performance, contingent pay, staff compensation, and benefits, initiatives on employee engagement towards rewards mechanism.
Reward process also focuses on the pay scale, normalizing pay, approach towards pay increase, evaluation of job code in line with the job description and providing flexible benefits option for the employees. Some of the methods for adjustment for wages while providing the compensation offer are as follows…
Base pay administration: This is the process of decision making on employee pay scales with fairness approach and grading mechanism. This involves compensation market study, which comprises of categorizing employees under below market range, on par and above market range.
Variable or Contingent components: This is also called variable pay component which is composed of performance, ranking, qualitative and quantitative metrics, individual competence, individual and team contribution, knowledge, skill, attitude, initiatives, vintage details etc., The contingent pay enables progressiveness by adding them to the base pay range. Mostly Contingent pay rewards as a quarterly or annual bonus as a component of Incentive. Seldom it is also used as a retention strategy in some organizations.
Employee benefits: This includes other flexibilities like paid leaves, sick leaves with pay, insurance coverage, flexible benefits like leave travel allowance, car fuel, and maintenance allowance, medical allowance, Education and Professional development schemes, food coupons, conveyance, house rent allowance, telephone reimbursement, children education allowance, pension schemes etc.,
I would like to throw couple of examples pertaining to Incentives and Compensation Management study that will be useful for this case requirement.
Incentive Management:
Description:
Suggestion:
Compensation Review:
Description:
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