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Compensation And Benefits Plan: Human Resource Management Essay

Crafting a Compensation and Benefits Plan Description

Fishers is a mid-sized manufacturing company out to maintain market leadership through the development and implementation of a compensation plan that meets the needs of the owners, clients, as well as employees. Compensation programs are critical to the effectiveness of the organization as they play a fundamental role in employee motivation, satisfaction, and productivity. The company seeks to achieve two crucial objectives from the implementation of this compensation and benefits plan; i) to reduce turnover, which has been an imminent problem over the last couple of years; and ii) to attract new talent, while retaining and improving the existing one.

Executive Summary

The company is at a critical juncture; it can no longer offer the perks of a small entrepreneurial enterprise since it has exceeded the employee threshold for such categorization. Employees have been complaining over what they think is below-market compensation, and noticeably, their morale appears to be diminishing. Sales have been on a consistent downward trend since the beginning of the year; and with the employee turnover rate hitting double-digits for the first time since the company's inception, it is becoming evident that we will need to upgrade our benefit plan to the corporate scale. Through its mission statement, the company has committed itself to satisfying employee and consumer needs; and it understands that satisfied employees will be crucial to the actualization of this, as well as other corporate goals.

Market-Based Pricing Strategy

One of the objectives that this compensation plan is to attract new employees while retaining the existing ones. We intend to achieve this by staying a step ahead of those companies that we compete with for talent. Cappelli (2012) expresses that companies are finding it increasingly difficult to fill their skilled job positions due to a lack of qualified applicants. To avoid such a scenario, and stay atop of the market, we will require a clear understanding of the compensation and benefit programs common to this...

We do not intend to make any changes to our basic pay structures; we seek to achieve the aforementioned objectives by upgrading our benefit packages to reflect our new trade level. Some of the most significant employee benefits offered by other comparable firms are;
Paid time off: there is an array of options for paid time off work, from which employers can choose. Bereavement or funeral leaves, paid personal days, and paid sick days are the more common forms of paid-time off. Such breaks are aimed at getting employees to unwind and respond to non-work issues (Beam & McFadden, 2001).

Health Insurance: the employee assistance counseling service program (EAP), the disability coverage, prescription drug plans, vision and dental insurance, and medical coverage are the most common options. Health insurance is considered the most important employee benefit (Beam & McFadden, 2001).

Retirement Plans: pension, 403(b), and 401(k) retirement plans are offered as vehicles for investment, allowing employees to defer taxes, and save a proportion of their incomes for the future. Most employers match 25 cents to every dollar that an employee puts aside for retirement (Beam & McFadden, 2001).

Finance-Safeguarding Insurance: Long-term care insurance, long-time disability insurance and short-term disability insurance are some of the common benefits offered to provide financial cushioning in case of emergency (Beam & McFadden, 2001).

Training: employee training benefits both employers and employees. It improves employees' on-the-job skills, increasing their earning potential and job worth. On the other hand, the employer benefits from improved output quality and employee retention, as well as increased corporate performance (Beam & McFadden, 2001).

Lifestyle Benefits: these are offered to relieve employees of stress, and ensure that they stay happy and contented (Beam & McFadden, 2001).

The Benefit Gap: What the 21st Century Employee Needs

We reckon that in addition to the core benefits such as disability and health, employees…

Sources used in this document:
References

Basset-Jones, N. & Lloyd, G.C. (2005). Does Herzberg's Motivation Theory have Staying Power? Journal of Management Development, 24(10), 929-943.

Beam, B.T. & McFadden, J.J. (2012). Employee Benefits (6th ed.). Chicago, IL: Dearborn Trade Publishing.

Cappelli, P. (2011). Why Good People can't Get Jobs: the Skills Gap and What Companies do about It. Pennsylvania, PA: Wharton Digital Press.

Miner, J.B. (2007). Organizational Behavior 4: From Theory to Practice. New York M.E. Sharpe.
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