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Compensation At Lockheed Martin Essay

Compensation Philosophy The current compensation philosophy of Lockheed Martin is based on a pay for performance ideal (Hartung, 2010). However, there is more to the issue than just paying for a person's performance. That performance (and pay) is based on the market, and how well the individual's performance contributed to the overall objectives of the company. Its goals are generally very clear, and those employees who work hard enough to help the company showcase and reach those goals are the ones who are going to be compensated at the highest level (Hartung, 2010). While a lower level of performance may not be enough to have an employee fired or laid off, it can be enough to ensure that the person does not receive as much compensation as other employees who work at higher levels on a consistent basis. Despite the high quality of the compensation plan, there is one flaw in it that can and should be considered and addressed.

This flaw is the time that must elapse before another salary evaluation is conducted for an employee. Evaluations are held once per year, in February (Hartung, 2010). For those employees who have improved their performance in March or April, nearly a year must pass before they are rewarded for this choice to be a bigger, better part of the Lockheed Martin family. While it would not be possible to adjust the employees' salaries up and down with their work level on a rapid basis, it would be possible -- and potentially preferable -- to move to...

That would allow employees with a strong work ethic the opportunity to advance more rapidly, and they could see their salaries increase at a pace that they believed commensurate with the level of work they provide. Helping employees in this way may not only keep them working harder, but it could also bring in more employees who want to give their all to a company that will reward them (SHRM, 2012).
There are several key factors that need to be addressed when it comes to the internal and external environment surrounding Lockheed Martin. Additionally, there are financial and cultural aspects of the organization that will affect the people in it, the compensation philosophy of it, and how those who find the organization significant react to the changes it makes (Hartung, 2010). When people focus on the way in which an organization handles its compensation, there are generally two schools of thought. One of those is focused on simply getting paid, equally, for the work that is done (SHRM, 2012). The other focuses on unequal pay, because there is actually unequal work that is taking place when it comes to what people are doing (SHRM, 2012). With that in mind, of course, making things "equal" should really be focused on how people are paid based on what they do and how well they advance the company for which they work (Hartung, 2010). That is part of the reason that Lockheed Martin has been so successful, because it has offered people the…

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Hartung, W.D. (2010). Prophets of war: Lockheed Martin and the making of the military-industrial complex. NY: Nation Books.

SHRM (2012). Planning and design: What is a compensation philosophy? What should be included in a compensation philosophy? Society for Human Resource Management. Retrieved from http://www.shrm.org/templatestools/hrqa/pages/compensationphilosophy.aspx
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