Premium Essay

Compensation Strategy Options

In: Business and Management

Submitted By jmpinoy13
Words 2629
Pages 11
A. Scenario

As a member of the human resources department in a manufacturing organization with 120 employees, you have been asked to evaluate different compensation strategies that are available for adoption within your organization. Compare and contrast at least three compensation strategies and determine recommendations for how they may be implemented within your organization.

Name: Henry Rivera
I.D. #: 000318961
Reference Title
Finding #1
Godfrey, W. (2013, January). Compensation Strategy for Success. Prezi. Retrieved from http://prezi.com/j9k9_m_2qiwn/compensation-strategies-for-success/
Sager, Suzanne. (2011, September). Merit Pay Most Often Used in Compensation in Public and Academic Librarians. Library Worklife. Retrieved from http://ala-apa.org/newsletter/2011/09/01/merit-pay-most-often-used-in-compensation-for-public-and-academic-librarians/
Ojimba, E. (2004, November 15). Salary Basics – Developing a Strong Compensation Strategy. Salary.com for Business. Retrieved from http://www.salary.com/Small-Business-Advice/advice.asp?part=par410

Finding #2
McGladrey. (2011). Lessons from Recession Increasing Focus on Incentive Compensation Programs. Retrieved from http://mcgladrey.com/Perspective/Lessons-from-recession-increasing-focus-on-incentive-compensation-programs
University of Wisconsin – Green Bay. (2013, April 9). Compensation Philosophy. Retrieved from http://www.uwgb.edu/hr/documents/CompPhilosophy0401.pdf

Finding #3
Gerhart, B., Milkovich, G.T., & Newman, J.M. (n.d.). Compensation Strategy. Answer, McGraw Hill. Retrieved from http://mhanswers-auth.mhhe.com/management/compensation/compensation-strategy
Fogleman, S. (2004, November 15). Creative Compensation. WesternDairy Business Magazine. Retrieved from http://nature.berkeley.edu/ucce50/ag-labor/7article/article33.htm
Hausser, D. & Lebing, K. (1996, April)....

Similar Documents

Free Essay

Option Strategies

...Option Trading Strategies and Their Effectiveness in the Indian Market The project starts with introduction to: * Overview of Derivatives and mainly Options. * The working and mechanics of options and how they help in hedging and trading. * History of Options with respect to Global & Indian Markets. * The advantages of Options The project mainly aims to cover the conceptual and theoretical background of the study including option terminology, option payoffs, payoff profiles of long & short underlying & long and short call and put options followed by options theory, knowledge and outline of the various possible trading and hedging strategies with options that are widely known including : * When to use the strategy * Basic legs involved * Other derivatives/underlying used with the strategy * The payoff profile of the strategy * The risk and reward * Breakeven points and profit and loss analysis Some of the strategies intended to be covered are: Long Call, Short Call, Synthetic Long Call, Long Put, Short Put, Covered Call, Straddles, Strangles, Collars, Spreads, Butterflies and Condors The various strategies are individually analysed with the help of detailed examples and then further studied taking real life examples of hypothetical positions from past data of Indian Derivatives market, mainly from the historical data archives of NSE as given on website of NSE. (Preferably recent month expiry contracts) Drawing......

Words: 285 - Pages: 2

Free Essay

Human Resource Management Case Study

...1-1-2003 Strategic Compensation: Does Business Strategy Influence Compensation in High-Technology Firms? Yoshio Yanadori Cornell University Janet H. Marler University at Albany - S.U.N.Y, marler@albany.edu Follow this and additional works at: http://digitalcommons.ilr.cornell.edu/cahrswp Part of the Human Resources Management Commons This Article is brought to you for free and open access by the Center for Advanced Human Resource Studies (CAHRS) at DigitalCommons@ILR. It has been accepted for inclusion in CAHRS Working Paper Series by an authorized administrator of DigitalCommons@ILR. For more information, please contact hlmdigital@cornell.edu. Strategic Compensation: Does Business Strategy Influence Compensation in High-Technology Firms? Abstract This study examined whether a firm's business strategy influences the firm's compensation systems in hightechnology firms. For the firm strategy variable, we used innovation strategy, which is one of the most critical business strategies in the high-technology industry. Our analysis showed that a firm's emphasis on innovation is positively related to the firm's employee pay level, both short-term pay and long-term pay. Moreover, a firm's emphasis on innovation has significant influence on several other aspects of employee compensation management. Innovation is positively associated with the difference in pay level between R&D employees and other employees, time orientation of employee compensation (the relative......

Words: 8518 - Pages: 35

Premium Essay

Wgu-Rwt1 Compensation Report

...Business Research Report Compensation Strategy Presented to: Assessment Code: RWT1 Table of Contents Executive Summary 3 Introduction 4 Research Findings 4 Finding Number 1 4 Finding Number 2 5 Finding Number 3 5 Recommendations 6 Conclusion 7 References 8 Executive Summary This report provides an analysis and evaluation of three different compensation strategies for potential implementation into our firm. Performance based, skill based, and piece rate pay plans are defined and analyzed. The focus of the topics included in the analysis includes employee retention, recruitment, morale, and productivity The performance based compensation considered is individual and team based bonus programs. This seems to be the most common form of incentive based compensation and has shown to be effective in many cases. This is also a relatively easy strategy to implement. Skill based pay is a strategy that puts emphasis on developing employees into skilled workers, as well as recruiting skilled workers. Employees are paid based on their skills rather than on the job that they fill. Its goal is to garner a quality producing team. This strategy is a bit more difficult to enact as the technical skills required in our industry are ever changing. Piece rate pay is a pay structure that offers a set amount of compensation per item produced. It has been shown to dramatically increase production while......

Words: 2147 - Pages: 9

Free Essay

Home Work

...UNIT 1 Deadline as Apr 6 Question 1 Son, Ha, MA __________ compensation is the psychological mindset of performing a job. Son Answer | | Extrinsic | | | Intrinsic | | | Base pay | | | Discretionary | Question 2 Which of the following stakeholders requires that companies comply with all employment legislation? Son Answer | | Employees | | | Line managers | | | Executives | | | U. S. Government | Question 3 COLA (Cost of Living adjustments): Ha Answer | | are tied to changes in the price of consumer goods. | | | are part of seniority pay systems. | | | reward employees based upon the achievement of individual goals. | | | are offered as a type of merit pay. | Question 4 __________ is the term used to describe both the monetary and nonmonetary rewards an employee receives. Ha Answer | | Extrinsic compensation | | | Salary | | | Discretionary benefits | | | Strategic compensation | | | | Question 5 __________ focuses on gaining competitive advantage by being the lowest-cost producer of a good or service within the market place. MA Answer | | Differentiation strategy | | | Cost leadership strategy | | | Competitive strategy | | | Core compensation | Question 6 List and explain the five different stakeholders of a company’s compensation system. Son There are five different stakeholders of a company compensation system and the human resource department provides them within and......

Words: 1715 - Pages: 7

Premium Essay

Doc, Docx, Pdf, Wps, Rtf, Odt

...Assignment on HR Manager Compensation Strategy Prepared to: Abdullah Iftikhar Prepared by: NAZIM (123051053) Compensation Management Course Code: 508 Deadline: 22 8th 2014 OBJECTIVE OF COMPENSATION: Acquire qualified personnel: compensation needs to high enough to attract applicant. Pay level must respond to the supply and demand of worker in the labor market. Retain current employee: employee must quit when compensation levels are not competitive, resulting in high turnover Reward desired behavior: pay should reinforce desired Control cost: a rational compensation system helps an organization obtain and retain worker at a reasonable cost. With effective compensation management workers might be over paid or under paid. Comply with legal regulation: A sound wages and salary system consider the legal challenges imposed by the government and ensure the employee compliance. Further Administrative Efficiency: Wages and salary should be properly designed to be managed efficiency PRINCIPLES OF COMPENSATION FORMULATION: Main factors affecting wage or compensation levels within an organization 1) Externals relatives 2) Salary 3) Individual worth REWARD VS RECOGNITION Employee reward system refers to programs set up by a company to reward performance and motives employees on individual and group levels. Employee recognition programs are often combined with reward programs the retain a different purpose altogether. DESIGNING A REWARD PROGRAN:...

Words: 1614 - Pages: 7

Free Essay

Rwt1

...Business Research Report Compensation Strategies Assessment Code: RWT1 Student Name: Jeannie Altmaier Student ID: 000284655 Date: 04/20/2014 Mentor Name: Kathy Huffman Contents Executive Summary 3 Introduction 4 Research Findings 5 Stock Options 5 Tuition Reimbursement 6 Merit Plans 7 Conclusion 8 References 10 Executive Summary In a business the main focus is become as successful as possible. In order to gain success and maintain the success a business must have a reliable and dependable staff. With this being said it is important to compensate employees to maintain and develop the best work performance possible. The success of the business is depended on the employees. Research has been done on three compensation strategies that benefit the employees and company, those three compensation strategies are implementing stock options, tuition reimbursement, and merit plans. Stock options benefits have been known as an attractive way to reward employee performance. It is important for the organization to claim the stock options to be capitalized on the balance sheet so shareholders can track EPS, which in return is beneficial to the organization as well. This compensation benefit has been around for decades and continued to grow until the increase in accounting rules in 2001. With more rules implemented it allows for the companies to maintain a fairness in the workplace. This option should be offered to all employees but is not...

Words: 3261 - Pages: 14

Free Essay

Ethics of Compensation

...hold CEOs and management responsible for all fraudulent acts committed by an organization. The ethical spotlight has now turned to CEO compensation due to the recent decline in the economy. The focus point of those public discussions has been to try and get a better position to influence CEO compensation packages. Determining a CEO compensation package and commitment that does not place undue pressure on the CEO to taint financial statements, provide excessive perks, approve stock option scandals to occur, and let outrageous severance packages could be a giant step in the right direction toward an ethical foundation in the business community. Perhaps CEO compensation packages are not the cause of corporate scandals, but sometimes they do push CEOs into making improper and unethical decisions. The relationship between CEO compensation is parallel to being an ethical company, and having long term success Executive compensation has risen significantly in past ten years. These increases are difficult to comprehend considering profits and stock prices of the only increased by 11% and 23% respectively as of 2008. Although the increase in market value created an environment for increasing compensation without much criticism from outsiders, are these levels ethical? The economic principle of supply and demand offers an explanation of the compensation market equilibrium. A job has economic value to the employer that created the position. The price to fill the position is......

Words: 668 - Pages: 3

Premium Essay

Executive Compensation

...Session 9 Samstag, 6. September 2014 13:30 Session 9 Prep Topic: CEO compensation Reading • Résumé Pedro Matos, Darden Professor • Chapter 7 in Corporate Governance • Chapter 7 in Boards That Deliver • Bargain Bosses, American chief executives are not overpaid, The Economist • How to get paid like a U.S. CEO, Fortune • Executive Compensation Corporate Governance: Chapter 7 - CEO Compensation • Norms for CEO compensation ○ Proxy statements provide information on executive compensation and are distributed ahead of shareholder meetings ○ There is a positive correlation between firm size and total CEO compensation ○ The higher the CEO total compensation, the larger the percentage of non-cash compensation (bonus) • The Goal of executive compensation • What is good performance? ○ Current circumstances, its goals and the execution of its strategies ○ Compensation should include short- and long-term plans ○ Long-term: achieving strategic goals (e.g. financial) ○ Compensation/performance should be benchmarked against peers • Building a compensation plan ○ Peer comparison is the beginning, but should not be the only determinant of CEO compensation ○ Gradual rise of CEO compensation is due to the matching with competitive compensation as soon as one competitor increases compensation • Compensation mix ○ Base salary  Have average base salaries with at-risk copmensation when performance is superior ○ Fringe Benefits  30-50% of base salary  Medical and life insurance premiums,...

Words: 822 - Pages: 4

Premium Essay

Sears and Total Rewards Approach

...employees. When designing an aggressive total rewards approach a mixture of five key elements are used to tailor a program that reinforces the overall business strategy of a company while ensuring organizational success for the future. These five key elements are: compensation, benefits, work life, performance and recognition, and finally development and career opportunities. The application of one or the combination of several is an effective way to assist Sears with acquiring a stronger presence in the retail industry. In an effort to be more competitive Sears implemented a new compensation system and revised their archaic performance management system. The new compensation system embraces the total rewards approach as it integrates three of the five key elements: compensation, performance, and career development. Under the new system employees are rewarded for performance. Providing rewards based on performance is an effective way to attract new hires as well as motivate and retain current employees. Performance is a factor that employees can control on a daily basis. By basing rewards on performance rather than tenure employees are empowered with the sense that they can determine their pay and navigate their career development within the organization. Previously, Sears endorsed a compensation system that emphasized a more traditional and paternalistic approach whereas employees’ rewards were based heavily on their length of service with the......

Words: 1138 - Pages: 5

Premium Essay

Compensation Strategies

...Compensation Strategies Table of Contents Executive Summary 3 Introduction 5 Research Findings 6 Health Benefits 6 Retirement Planning 7 Employee Rewards and Incentives 8 Recommendations 10 Conclusion 11 References 12 Executive Summary We need to re-evaluate our current employee package. Our compensation strategy needs an entire tune-up. We do not offer competitive benefits that will entice the type of employees we want working for our company on a long-term basis. A new, improved, and luring employee benefit package will help set us apart from our competition. Our current benefits policy includes: Paid vacation for salaried employees only after 1 full year of continuous service, paid sick days for salaried employees only after 1 full year of continuous service, medical and dental only to all employees after 6 months of continuous service, holiday dinner for corporate employees and their spouse/domestic partner. We can improve these areas and add some other options to our current employee package, Our current health benefits are through an HMO, which is the best option at this time. Perhaps in the future when we have become a 500+ employee company we can look at the other option, a PPO coverage with an additional option to include an HSA account. Our current HMO plan provides coverage with a small co-payment and a 20/80 % coverage with a $1000 annual deductible. The only way I can see right now......

Words: 3032 - Pages: 13

Premium Essay

Mfs Case Analysis

...Massachusetts Financial services Case Analysis (A) Position Statement: Massachusetts Financial Services is an investment management company started in the year 1924. The creation of the Massachusetts Investors' Trust in Boston now known as Massachusetts Financial Services(MFS) heralded the arrival of the modern mutual fund in 1924. The case describes the compensation and performance management system at MFS. The company follows a subjective based compensation system for its employee. The senior management team introduced hedge funds at the firm, and it is a great opportunity to bring higher revenue. On introduction of hedge fund, the key problem management is facing is -How to compensate the Hedge fund manager. The question arises, will the typical hedge fund manager pay which is 20% of the upside harm the MFS culture of camaraderie. Also if they pay hedge fund manager on a prevalent subjective system, can they retain the hedge fund managers especially after an incident where 2 top performers in hedge fund left the company to start their own firm, in less than year the fund was made available to public. The company has closed down the hedge fund available to domestic institutional investment as it saw half of its hedge fund outflow with the exit of Stack and his former MFS Colleague. Mark Regan MFS veteran employee is chosen as the new manager and is heading current hedge fund which is available for offshore investors (B)Problem Essay: In 1924 the firm introduced......

Words: 1673 - Pages: 7

Premium Essay

Course Project Week 7

...Johnson and Kenna Grace and Tonnet Slan Presented to Dr. Glenn Palmer Compensation and Benefits |Bank of America: |April 20, 2014 | What is Compensation? “Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs.” Martocchio, J.J. (2013) A Human Resource Management Approach. Compensation as most know is the hourly or annually paid. Compensation consist more of just hourly or annually pay. Organizations create monetary compensation process to reward their employees for their job performance. Monetary compensation is the core of compensation. A nonmonetary reward includes benefits such as medical insurance, paid time off and other services. Employees receive a base pay for performing their jobs. Base pay is recurring based on the company pay schedule. Companies distribute base pay to their employees in one of two forms: hourly pay or as salary. Employees earn hourly pay for every hour worked and salaries regardless of the number of hours worked. Understanding compensation’s goal in an organization takes understanding the role of HR and how compensation function fits into HR. Compensation Philosophy A compensation philosophy is a formal statement providing information on the company’s position about employee compensation. Compensation philosophies are usually created by the human resources department......

Words: 1947 - Pages: 8

Premium Essay

Rwt1

...Business Research Report Compensation Strategies for 2014 Assessment Code: RWT1 Student Name:  Student ID:  Date: 9/15/13 Table of Contents Executive Summary Introduction Research Findings Salaried/Hourly Compensation Commission/Productivity-Based Compensation Longevity Compensation Recommendations6 Conclusion7 References8 Executive Summary This report reviews three different compensation strategies PepsiCo can develop and implement within all of our PepsiCo. Brands and businesses for our employees. Compensation is one of the most important and rewarding factors for our employees based on our organizational health survey conducted in 2011, so a thoughtful and thorough approach should be taken as we think about changing the way in which our companies reward our employees for the work they perform on a daily basis. Salary and hourly compensations are easy and constant ways of paying the employees of our companies. Salary and hourly compensation can be a set wages employees will earn based on their job description. This wage will not change based on seniority or merit. The stability of this type of compensation system is appealing to employees as they are aware of how much income they will receive on a regular basis. Hourly based pay has very little room for opportunity of growth for the employees. Commission/productivity based pay also known asperformance based pay is a relatively common and popular approach to compensation where the employee is paid by...

Words: 6394 - Pages: 26

Free Essay

Compensation & Benefits

...HRM430: Compensation & Benefits Chassity K. Moody DeVry University Online In a job market like the current one, attracting and retaining the best help is challenging. The key to finding and keeping good employees is creating an environment in which they would want to work. We have all heard about surveys that demonstrate that it is far more than mere compensation that motivates employees to stay where they are.   It is the same when potential candidates are assessing their options and choosing which opportunity they will accept. The current competitive conditions in the business world make it difficult to acquire and retain the top talents. Once the organization is able to identify, it can be unable to offer the right pay and to manage the pay increases to retain top talents. The compensation strategy is the extremely important piece of the overall HR Strategy to keep the company competitive and successful. On the other hand, the compensation strategy is important to keep the personnel budget under the control and to manage the jobs in the right salary (pay) brackets. (Ulich, D, 2011) The focus on compensation is most often the most important source of the job. It is taken for granted because of the amount of salary that is received. In non-profit organizations there are obvious challenges when it comes to providing competitive salary and benefits to attract and keep the best staff. If Family Christian Health Center could market their strengths, it would......

Words: 1408 - Pages: 6

Premium Essay

Research Paper Rwt

...The Human Resources Department was recently tasked with researching, analyzing and recommending one or more new compensation programs for 3W Manufacturing, Inc. Compensation is a key driver in employee satisfaction and performance in any industry, but is fundamentally important within our manufacturing niche, as competition for top level employees is fierce. With compensation being such an important aspect of employee benefits, hiring and retention, Human Resources took considerable time to research numerous compensation strategies that could be implemented at 3W Manufacturing. After considerable deliberation, Human Resources determined the top three options for compensation at the company going forward: Base Salary (Only); Pay for Performance; and Longevity Pay. It is the belief of the department that the business will require a combination of these pay structures to maintain a healthy workforce and continue to recruit new talent into the organization. Introduction The purpose of this report is clearly explain the research the Human Resources Department conducted to definitively recommend a compensation strategy to move forward with at 3W Manufacturing. It is important to understand the broad scope of compensation programs that exist, not only in the manufacturing industry but also in the global business world. Compensation is a key driver in employee motivation, performance and satisfaction. It is also plays a key role in the recruitment of top level talent......

Words: 2114 - Pages: 9