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Compensation And Benefits Plan Business Plan

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Compensation Strategy for a Limo Service The compensation strategy and benefits strategy for a limousine service in Austin, Texas will represent an essential component to the overall business strategy. The projected annual net revenue for the first years of the business is a negative fifty thousand dollars. Therefore any potential savings in employee compensation might represent something that could reduce this financial burden. Furthermore, any amount of compensation that would go beyond the planned amount would increase the company's loss. Creating an efficient strategy for compensation and benefits will be exceedingly important in the company's first year because it is expected to operate at a loss.

The compensation and benefits strategy will also be important because it will largely influence the quality of the candidate pool that the company will have to select its employees from. Higher wages will draw more qualified candidates and a lower compensation package might reduce the amount of qualified individuals that will apply for the job. The limousine industry will operate slightly different than other industries because part of the compensation that an employee will receive will be based off of tips. Some companies allow their employees to keep all of the tips that they receive, while...

Therefore it is also necessary to consider the amount of tips that an employee will receive when determining potential salaries.
To determine a starting point for a compensation and benefit strategy, the national averages in salary for this position were identified. Although the compensation strategy will have to be tailored to the local conditions, the national averages can help provide insights to the salary ranges.

Figure 1 - National Salary Averages (Pay Scale, 2015)

The average median salary for similar positions nationwide is about eleven dollars an hour plus tips. Similar positions in the Austin area were identified to pay $15 dollars an hour with only a portion of the tips being paid to the drivers (CCLAustin.com, 2015).

Fair and equitable compensation has many advantages for both employees and employers and determining a fair salary for the limousine company should be one of its primary objectives. If a worker perceives that their compensation is both fair and equitable then they are likely not have intentions to quit which will lead to high turnover rates, and provide higher levels of customer service. If the drivers put forth their best effort this will equate into higher organizational performances…

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References

CCLAustin.com. (2015, July 25). Limousine Driver. Retrieved from Indeed: http://www.indeed.com/cmp/1821,-LLC/jobs/Limousine-Driver-caa563266df09236?sjdu=QwrRXKrqZ3CNX5W-O9jEvc_0arWZVL8kBZq_BJ55IeacX4zQS5v9EEfHtSBIrvbSgRNqfatL5qHmPK9ugjQ-5w

Pay Scale. (2015, July 2). Limousine Driver Salary. Retrieved from Pay Scale: http://www.payscale.com/research/U.S./Job=Limousine_Driver/Hourly_Rate
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