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Strayer University
BUS 409: Compensation Management
Assignment #2- Evaluate Compensation Plans of Company

In evaluating Booz Allen’s compensation plans, it became obvious that I must first understand the nature and vision of the company in order to have a clear and realistic critique of the company’s pay plans. Internal and external analysis of the characteristics of the company and the things that make it unique among competitors and the strategic business plan objective were taken into consideration. A closer at the company’s history, current culture, organizational structure and practices, strategic hiring practices, promotions and rewards and the regulatory environment in which the company operates were all taken into consideration.

1. Evaluate the existing compensation plan to determine if it is the most appropriate for your company.
Booz Allen Company Booz takes proactive steps in creating conditions that offers its employee the ability to succeed and achieve their career goals and family balance. The company operates on the “Total Rewards Program” which main purpose is to provide “not only competitive compensation, retirement benefits, health benefits, and work-life and wellness programs, but also flexible work arrangements, leave programs, career growth opportunities, and much more” (Booz Allen Careers, 2012)
The company is $5billion a year service and technology business with varying range of clients from the Federal government and private commercial entities within the United States and several nations around the globe. Their compensation package reflects the company’s strategic need to attracts, motivates, and retains the best people in the industry with highly competitive compensation and annual merit increase opportunities. 2. Determine the most beneficial ratio of internally consistent and market consistent compensations systems for the company.
Booz Allen Hamilton recognize the influence of compensation practices on recruitment, whether they stay if hired or become productive on the job and as such takes proactive steps in ensuring that both applicants and employees view their compensation on a positive note. They emphasize the equity theory which implies that “that people form equity beliefs based on two factors: inputs and outcomes. Inputs (I) refer to the perceptions that people have concerning what they contribute to the job (e.g., skill and effort). Outcomes (O) refer to the perceptions that people have regarding the returns they get (e.g., pay) for the work they perform” (Fox Lawson & Associate, 2010)
The company maintains a strategic compensation mechanism that takes into consideration the dynamics of the ever changing compensation benefits with the organization and external forces in the industry globally. This allows them to stay competitive and attract the best employees in the industry. 3. Evaluate the current pay structure used by your company and assess the recognition of employee contributions
Booz Allen Hamilton’s company pay is very unique in the sense that several factors play a role in designing compensation packages within the organization. They utilize mix blend of pay structures because of the organizational size, number of clients diverse needs. The statement of work from their clients and the skill set determines the pay structure and compensation package that will attract the best and brightest to perform the job. They utilized person focused pay which takes into account competency, knowledge and skill needed and also job based pay structures when appropriate.
The company has a comprehensive awards program for its employees and encourages philanthropic work among employees to participate in programs within their communities. Booz Allen honors “the contributions of its employees by offering service anniversary and recognition award programs” (Booz Allen Careers, 2012) 4. Make two (2) recommendations for improving the effectiveness of the discretionary benefits provided by the company you selected.
Booz Allen provides flexible working environment that integrates employee’s work life balance that allows workers to manage their professional as well as individual responsibilities. They also provide opportunities for learning, networking, camaraderie, and community involvement. Some of the discretionary benefits includes but not limited to the following, •Flexible work arrangements, such as flexible scheduling and teleworking
•Life Works, a free, confidential resource and referral program
•Employee Assistance Program (EAP) for confidential clinical counseling and crisis intervention services
•Dependent Care Flexible Spending Account, dependent care plans, and nationwide discounted child care
•Adoption and advanced infertility treatment benefits
•Career Mobility program for internal job transfers
•Health and wellness programs (Booz Allen Careers, 2012)
Though the company goes to great length in providing the best compensation package for its employees, there are distinction between interns and part time worker in the application of discretionary benefits. I would recommend that discretionary benefits should be applied to any employee who contributes to the organization regardless of their capacity and status. 5. Evaluate the types of employer-sponsored retirement plans and health insurance programs provided by the company you selected and compare them to that company’s major competitors.
Unlike SAIC, a technology and service development firm in the same industry as Booz Allen Hamilton company, which provides its employees with diverse forms of retirement plans such as 401(k) plans and some ownership interest in the organization upon retirement. Booz Allen by far is the number one company within the industry that provides long term financial security by providing annual profit sharing and opportunities to save through a pretax Roth IRA 401(K) and other types of financial instruments to each workers investment needs. The company also provides Employee Stock Purchase Plans that allows workers to purchase stocks at 5% discount through deductions from their payroll. SAIC only offers stocks to its employees at 3% discount with no profit sharing plans as compared Booz Allen Hamilton.
In conclusion Booz Allen Hamilton has the “best employer sponsored retirement plans and health insurance programs within the industry which is why they able to recruit and retain the best and brightest work force within the industry and remain competitive 10 years in a role” (Best Company to Work For, 2012)

Best Company to Work For. (2012). Forbes Magazine, 16-17.
Booz Allen Careers. (2012, December 10). Retrieved from Booz Allen Hamilton Company:
Fox Lawson & Associate. (2010, July 22). Retrieved from Business Reference Website:

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