Premium Essay

Hrm/324

In: Business and Management

Submitted By melissaj411
Words 310
Pages 2
Internal and External Equity Comparison
Internal and External Equity Comparison Edgar Martinez HRM/324 September 10, 2012 Annette Clark Davis

Internal and External Equity Comparison In today’s competitive globalized economy, an organization’s approach to equity and its perception of equity can affect an organization’s ability to captivate, retain, and motivate its employees. Therefore, external as well as internal equity play an important role in an organization’s design of its compensation structure. In this essay, it shall examine the total compensation plans for the Home Depot Corporation and IBM Global Services, focusing on internal as well as external equity. Additionally, it shall also review the various advantages as well as disadvantages of internal and external equity for both organizations. Finally, it will provide an explanation to how each plan supports each organization total compensation objectives as well as the relationship of the organization’s financial situation to its plan (University of Phoenix, 2009). Internal and external equity An Organization that notably uses internal equity to form its pay structure is the Home Depot. The Home Depot’s internal equity exist because of its pays wages and hiring processes designed to fit each store budget, instead of hiring people with the skills to do the job at a market rate pay. The Home Depot’s decentralized stores use an elitist compensation system with different compensation plans by organization level and incentives offered only to specific employees or units. The Home Depot’s internal equity compares each pay level to other employees and business units in the company’s hierarchy. This process exists to balance the compensation structure appropriate to a job profile in comparison to the pay wages of its senior and junior level executives in the company. However,...

Similar Documents

Premium Essay

Hrm 324

...Retirement Plan Communication Total Compensation HRM/324 Types of Available Retirement Plans As a Human Resources manager of a newly formed organization, I would first consider the two types of retirement plans, which I could make available to the employees; as well as how each plan works. The first plan to consider is the Defined benefit plan, where the amount of benefits to be paid at the time of the retirement are calculated using the formulas. It is usually paid each month. The second plan is the defined contribution plan, where the amount of future benefits available to the employee are based upon the amounts contributed to the plan by the employee and the employer. It is also based on the interest that is earned over time. The “Defined Contribution plans” include the plans like the “Profit Sharing,” “Employee Stock Ownership plans(ESOPs),” “Savings Incentive Match plans for the Employees(SIMPLE),” “Simplified Employee Pension plans (SEPs),” and the series “401(k)s, 403(b)s and 457s.” Communication Methods and Frequency In order to ensure that the plan is successful, employee participation is very important, and clear communication is crucial. A qualified consultant or broker, should be hired to design the plan, and then explain the benefits of the plan to the employees in groups. The employee’s need to be educated and informed regarding the nature and the benefits of the plan, and this should be on a continual basis. Updates to the plan need to be made......

Words: 854 - Pages: 4

Free Essay

Hrm 324

...FEDERAL CONTRACTOR COMPENSATION PLAN LAWS PERTAINING TO COMPENSATION PLAN UNIVERSITY OF PHOENIX Biotech is a federal contractor that employs 200 employees and serves as the government leader in bioresearch. Creating a compensation plan Biotech must ensure that all laws and regulations pertain to them are being followed, since Biotech works for the government there are many laws that they must abide by such as; Title VII of the Civil Rights Act of 1964, American with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA) as well as Executive Order 11246. Amongst the following law that has a direct impact with the compensation plan of Biotech, Executive Order 11246, covers a broad array of regulation that is covered by OFCCP (Office of Federal Contract Compliance Programs). Under the Executive Order 11246, federal contractors such as Biotech, must subject to a compliance review to which an examiner to reviews their affirmative action program. The compliance review is an investigation that evaluates possible discrimination within Biotech if one exists. Biotech’s compensation plan must be outlined to the regulation of Executive Order 11246, by ensuring that all employees are free from discrimination. If a compensation plan is to be establish it should be aligned with Biotech’s affirmative action plan. The affirmative action plan of Biotech’s must have all the efforts to prevent the......

Words: 366 - Pages: 2

Premium Essay

Week 1 Hrm/324

...Organizational Objectives and Total Compensation in Different markets Sergio Herrera HRM/324 July 3, 2013 Dr. Donald Duvall Organizational Objectives and Total Compensation in Different markets In an attempt to attract and retain good employees, companies may offer the benefit of retirement savings options. Employers have the option of sponsoring benefit and contribution plans to eligible employees. It will also discuss how beneficial the plans may be for participants. Some Federal and State laws are valid and do have an impact on compensation inside an establishment and taxes that are applicable on income. The method which an organization uses to fix the salaries and benefit plan of employees depends on the outline that is provided by some federal and state laws. The Equal Pay Act of 1963 is directly linked with The Fair Labor Standards Act and it forbids dissimilarity between salaries of male and female employees employed at an identical position (U.S. Equal Employment). Employee Retirement Income Security Act of 1974 is another law which controls issues like pension benefits, retirement plans, disability, and health insurance schemes (U.S. Department of Labor). Defined benefit plans is a fixed amount set up for eligible employees for retirement. This plan consists of employer contributions either quarterly or annually. With these plans the employer decides to pay a secure quantity to the worker's pension account every year “When markets rise, the employer will......

Words: 439 - Pages: 2

Free Essay

Hrm 324 Final Exam Guide

...HRM 324 Final Exam Guide To Buy This material Click below link http://www.uoptutors.com/HRM-324/HRM-324-Final-Exam-Guide Base pay defined is? Pay by the drink Hourly or annual salary Service fees A fee that is paid per project How is base pay adjusted over time? Cost of living adjustments Seniority pay, merit pay Incentive pay, person focused pay All of the above Extrinsic compensation includes? Base salaries and bonuses Jobs that provide autonomy Both monetary and nonmonetary rewards Traditional pay 4) Competency based can be defined as? Two basic types of focused pay programs, pay for knowledge and skill base pay Compensation for longevity Phased wage approach Retirement compensation 5) Pay for knowledge can be defined as? a) Rewards for managerial, service, or professional workers for successfully learning specific curricula b) Consultant fees c) Measures labor productivity 6) Skill-based pay defined is? a) Employees who work on computers b) A term used mostly for employees who do physical work c) Trade that deals mainly with the restaurants industry d) Skills considered supervisory 7) Incentive pay defined is? Augments employees base pay Appears as a one-time payment Employees usually receive a combination of recurring base pay and incentive pay All of the above 8) Incentive pay plans can be broadly classified into what 3 categories. a) Store sales, profit levels, customer quality b) Cost savings, reduction, services c) Individual......

Words: 451 - Pages: 2

Premium Essay

Human Resource Management

...(Byars & rue 2006). According to Stone (2005) HRM is important to determine the effective and efficient use of people in achieving the organization’s strategic, business objectives and the satisfaction of individual employee needs. In order to have a successful HRM it is important to have a strategic HRM, strategic HRM is the process of interconnecting the HR purpose with the strategic objectives of the organization in order to increase performance (Bratton 2013). There is several importance of strategic HRM which is to focus on performance and consistency of its business, bridge between business strategies and human resources practices, identifying and analyzing the external opportunities and threats may impact to the organization, and help companies work harder to meet the needs of their employees (Mathanas 2011). SWOT analysis is part of strategic HRM due to SWOT can determine the future of an organization that are referred to strategic factors. SWOT analysis in HRM is defined as a tool that helps organization assist issues within external which includes assessment of strength, weaknesses, external opportunities and threats, and provides an outline for strategic decision making in HRM (Colbert 2013). According to Chen & Brunenski (2013, p.3-4) SWOT has a several advantages which is simplicity means SWOT analysis requires neither technical skills not training and it can be performed by anyone with knowledge about HRM, another advantages is low cost due to......

Words: 2431 - Pages: 10

Free Essay

Doc, Docx, Pdf, Wps, Rtf, Od

...February 04, 2015 IUBAT–International University of Business Agriculture and Technology Spring Semester January 05-April 08, 2015 Day Section Class Schedule 8:30-9:30 CSC 103 (Sec-A) SM #402 CSC 103 (Sec-B) MSS #407 CSC 103 (Sec-C) KD #408 CSC 103 (Sec-D) GM #421 CSC 103 (Sec-E) DAS #501 CSC 103 (Sec-F) PB #502 CSC 103 (Sec-G) DMAH #503 09:3510:35am CSC 103 (Sec-B) MSS #407 CSC 103 (Sec-C) KD #408 CSC 103 (Sec-D) GM #421 CSC 103 (Sec-E) DAS #501 CSC 103 (Sec-F) PB #502 CSC 103 (Sec-G) DMAH #503 CSC 103 (Sec-H) HR #606 ENG 101 (Sec-A) SR #607 ENG 101 (Sec-I) NZM #504 ENG 101 (Sec-J) ENG 101 (Sec-I) NZM #504 ENG 101 (Sec-J) ART 102 (Sec-N) KK #506 ART 102 (Sec-S) MAH #507 ART 102 (Sec-O) SAC #508 ART 102 (Sec-U) NKD #402 CSC 103 (Sec-H) HR #606 ENG 101 (Sec-B) SR #607 ENG 101 (Sec-D) ATMSA #405 ENG 101 (Sec-H) NF #603 ENG 101 (Sec-G) SR #607 ENG 101 (Sec-C) LAM#604 ENG 101 (Sec-D) ENG 101 (Sec-F) JU 10:40-1 ll:45l:40am 12:45pm CSC 103 CSC 103 (Sec-A) SM (Sec-I) #323 MSS#402 CSC 103 (Sec-J) MMR #520 CSC 103 (Sec-K) PB #521 CSC 103 (Sec-U) PPP #601 CSC 103 (Sec-T) DAS #602 2:00-3: 00pm CSC 103 (Sec-I) MSS #402 CSC 103 (Sec-J) MMR #520 CSC 103 (Sec-K) PB #521 CSC 103 (Sec-U) PPP #601 CSC 103 (Sec-T) DAS #602 ART 102 (Sec-H) MMI #403 ENG 101 (Sec-H) NF #603 ENG 101 (Sec-C) LAM #604 3:05-4: 05 pm ART 102 (Sec-A) NKD #403 ART 102 (Sec-B) KK #401 ART 102 (Sec-C) MMI #507 ART 102 (Sec-T) SAC #508 ENG 101 (Sec-N) SI #621 4:105:10pm CSC 103 (Sec-L) MAH #502 CSC 103 (Sec-M) MAB#503 CSC......

Words: 19305 - Pages: 78

Free Essay

Timetable

...minutes of the reporting time. INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE POST GRADUATE PROGRAMME OFFICE End-Term Examinations (PGP 17, Term-III, 2013-15) Seating Plan Course Venue C2 C3 C4 FM-II OM-II CC1 CC2 C1 A1 A2 Section-A 01-15 16-27 28-38 39-62, D/205,219 Section-B 63-77 78-87 88-97 98-125 D/180,238 Roll Numbers Section-C Section-D 126-139 140-149 150-160 161-188 D/324 189-209 210-224 225-238 239-250 357-359 Section-E Section-F 251-270 271-284 285-298 299-304 360-361 FPM 2-5 305-324 325-338 339-352 353-356 362-364 FPM 8-11 Venue CC2 C3 EM MM-II IE C4 A1 A2 C1 C2 CC1 Section-A 01-33 34-48 49-62 D/205, 219 Section-B 63-95 96-111 112-125 D/180 Roll Numbers Section-C Section-D Section-E Section-F 126-146 147-167 168-188 D/111 189-210 212-232 233-250 357-359 251-271 272-304 360-361 FPM 2-5 305-325 326-356 362-364 FPM 8-11 Venue CC1 C4 C3 HRM C2 C1 A2 A1 CC2 Section-A 01-30 31-41 42-51 52-62 D/205,219 Section-B 63-91 92-101 102-111 112-125 D/180 Roll Numbers Section-C Section-D 126-153 154-163 164-175 176-188 D/324 189-203 204-218 219-232 233-250 357-359 Section-E Section-F 251-264 265-278 279-292 293-304 360-361 FPM 2-5 305-318 319-332 333-346 347-356 362-364 FPM 8-11 Course Venue A1 A2 C1 Section-A 01-15 16-30 31-44 45-62 D/219...

Words: 1153 - Pages: 5

Premium Essay

File

...Tokyo Preface XXII Acknowledgments xxv Strategic Human Resource Management: An Overview 3 Chapter Objectives 2 HRM in Action: Not HR Branding, Employer Branding 3 Human Resource Management 4 Human Resource Management Functions 5 Staffing 5 • Trends if Innovations: Measuring Quality of Hire in Today's Environment 6 Human Resource Development 6 Compensation 7 / Safety and Health 7 Employee and Labor Relations 7 Human Resource Research 8 Interrelationships of HRM Functions 8 Dynamic Human Resource Management Environment 8 Legal Considerations 8 Labor Market 9 Society 9 Unions 10 Shareholders 10 Competition 10 Customers 10 Technology 10 Economy 11 Unanticipated Events 11 How Human Resource Management Is Practiced in the Real World 11 HR's Changing Strategic Role: Who Performs the Human Resource Management Tasks? 11 Human Resource Manager 12 HR Outsourcing 12 HR Shared Service Centers 13 Professional Employer Organizations (Employee Leasing) 13 Line Managers 14 HR as a Strategic Partner 14 A Strategic HR Example 16 A Strategic HR Audit 16 Human Capital Metrics 17 Human Resource Designations 18 Evolution of Human Resource Management: Moving into Strategic HR 18 Evolving HR Organizations 19 Scope of This Book 20 • A Global Perspective: Cultural Differences in Global HR 22 SUMMARY 23 KEY TERMS 24 QUESTIONS FOR REVIEW 24 HRM INCIDENT 1: HR AFTER A DISASTER 24 HRM INCIDENT 2: DOWNSIZING 25 NOTES 25 PART TWO: ETHICAL, SOCIAL, AND LEGAL CONSIDERATIONS 28 Business Ethics and......

Words: 4146 - Pages: 17

Free Essay

Internal and External Equity Comparison

...Organizational Objectives and Total Compensation in Different Markets Lynette Gill HRM/324 December 10, 2012 Jocelyn Freimark Organizational Objectives and Total Compensation in Different Markets One of the fastest growing fields in Human Resources is compensation. The main motivator for employees is compensation; potential employees are searching for jobs that fit their area of specialty. A company’s human resources team is constantly looking for ways to compensate employees for job performance. When analyzing organizational objectives and total compensation packages in the various markets, it is important for small companies to know the differences in wages and salaries. Wages are paid to hourly employees based on the number of hours worked in a week while salaries are paid to exempt employees, executives, and those defined by the Fair Labor Standards Act of 1938. Deciding an employee’s level of monetary compensation depends on various factors. The wage should be high enough to attract qualified potential employees; the wage should in competitive with similar jobs performed in similar companies. Other considerations include: * The number of other employees capable of fulfilling the job responsibilities * The demand within the community and/or industry * Cost of living There are laws which have an impact on compensation that small companies should be aware of. The Fair Labor Standards Act (FLSA) has been amended over the years and now includes five......

Words: 560 - Pages: 3

Premium Essay

Comp

...Organizational Objectives and Total Compensation in Different Markets Juan Holguin University of Phoenix HRM/324, Total Compensation. September, 14 2015 Rebekah Benson Human resources (HR) consultant. The factors that will have an effect on the organization are particularly the federal contractor. The areas of compensation are well regulated it, and they have established controls parameters that will have a final effect in the organization production. The McNamara service contract Act requires contractors that have contracts over $2500 to pay more than the prevailing wage (United States Department of Labor, 2009). In contrast, all contractors that aren’t part of the Federal Reserve will have a fair payment over the minimum wage, adding over time and benefits. As we all know, it is necessary to name the Davis Bacon Act as the one that would have an effect over the contractor legislation. Davis Bacon Act would have an effect on contracts of repair and alteration on public buildings and places that belong to the city. As the Act has been applied to the contractor, the organization will be forced to adjust its compensation, having to safety secure each individual by making sure the wages keeps over the base paid, and the benefits will remain active as the organization makes sure every employee have the same treatment. (Department of Labor, 2009). Davis-Bacon will ensure every employee gets corporate benefits, as they keep the......

Words: 548 - Pages: 3

Premium Essay

Organizational Objectives and Total Compensation in Different Markets

...Organizational Objectives and Total Compensation in Different Markets HRM/324 University of Phoenix Compensation laws are defined to create nondiscrimination in the compensation provided to employees in the organizations. This paper will help in explaining the laws and regulations, along with the similarities and differences influencing compensation for a biotechnology company and the companies in other markets. The compensation laws and regulations are almost the same in the industries. In the case of a company that works in the biotechnology industry, special care concerning the compensation plan is required. This industry is believed to be involved in special hazards to health and security and is also inclusive of some revolutionary implications, moral, and ethical issues. The following are some of the laws relating to compensation plan in the industry that helps in identifying the different aspects of pay: The Fair Labor Standards Act: This Act is important because it involves legislations concerning the total compensation plan for the small business owners and companies. “This law involves five major compensation laws that administer minimum wage, equal pay, overtime pay, child labor, and record keeping requirements” (Cahn & Donald, 2010, p. 25). The Equal Pay Act (1963): This law is an amendment to the FLSA and restricts any kind of discrimination based on sex for men and women working at similar jobs and in the same workplace. “This law does not limit the......

Words: 652 - Pages: 3

Free Essay

Organizational Objectives and Total Compensation in Different Markets

...Organizational Objectives and Total Compensation in Different Markets NAME September 8, 2014 HRM 324 INSTRUCTOR Organizational Objectives and Total Compensation in Different Markets Total compensation is an important piece of the human resource puzzle. It is the thread that can tie valuable employees to the company and its overall success. The laws and regulations are significant in knowing and understanding in an attempt to apply that knowledge to the overall design of the total compensation package a company offers. Working as a federally contracted employer for more than 200 employees, certain laws and regulations will affect the total compensation package within the organization. One in particular is the Affordable Healthcare Act. Two biotech organizations and their total compensation package will be discussed. The Affordable Health Care Act The Affordable Health Care Act was designed to help all people obtain and maintain their healthcare coverage even in the event of loss of employment. The creation of the Afforadble Health Care Act allows insurance companies “from discriminating against anyone with a pre-existing condition, dropping your coverage if you get sick, billing you into bankruptcy because of an illness or injury, and limiting your annual or lifetime benefits” (www.whitehouse.gov, 2013). The Affordable Health Care Act was not received well from some of the population. It seemed to be not quite so......

Words: 645 - Pages: 3

Premium Essay

Organizational Objectives and Total Compensations

...Organizational Objectives and Total Compensation in Different Markets HRM/324 Haleigh Phillips Organizational Objectives and Total Compensation in Different Markets Most employees do not realize that their salary in not the only means of compensation from their employer. Companies utilize intrinsic and extrinsic compensation to offer their employees the total package and encourage them to be hardworking, dedicated, and loyal staff. Extrinsic compensation is rewards such as pay raises, paid vacation, paid sick leave, and insurance benefits. Intrinsic compensation is non-monetary rewards such as a promotion without pay as a team leader, or giving the employee a new job that puts trust in them to make the decisions without the help of a superior. Intrinsic is designed to help make the employee feel they are needed and encourage them. Human resource managers use compensation as means to get hard working staff that will remain with the company long term. Unfortunately, we have had to legislate laws and regulations because of how employees once were treated. (Martocchio, 2015,). Workers were underpaid, overworked, and were given reduced benefits if offered any at all. Luckily, we have come far in regards to this type of treatment. Employees now are rewarded with total compensation packages that promote employee loyalty to the organization they are employed. Laws and Regulations The Fair Labor Standards Act was established to set what minimum wage would be and other......

Words: 726 - Pages: 3

Premium Essay

Internal Equity Comparison

...Internal and External Equity Comparison HRM / 324 Recruitment, retention and reduction of staff turnover are some of the key things that many organizations focus on when they begin to put together the “fundamental glue” of the company, the Compensation Plan. Those things in mind, both the internal and external equity considerations, and how they effect an organization should not be dismissed. Compensation packages are arguably the most valuable piece of information to an organization as it begins to draw up a package geared at attracting and retaining suitable employees. A well-constructed compensation package has the ability to ensure that employees are not only attracted to the job in question, but are also willing to stay with the organization for an extended period of time after the job is secured. Proven to be highly beneficial to an organization especially by way of cost effectiveness is the ability to recruit effectively, higher the appropriate candidate, maintain a high retention rate for employees, and increase productivity. In this paper, internal and external equity is explored, including the advantages and disadvantages of both, an explanation of how the plans support an organizations total compensation objective and how they relate to the organization’s financial situation. Internal equity refers to the Employees' perception of their responsibilities, rewards, and work conditions as compared with those of other employees in similar......

Words: 832 - Pages: 4

Free Essay

Legal Issues in Compensation

...Organizational Objectives and Total Compensation in Different Markets Keith Hammond HRM/324 December 09, 2013 Professor Sharon Fletcher Organizational Objectives and Total Compensation in Different Markets There are a number of applicable Federal and State laws that have an effect on compensation within an organization, along with taxes paid on income. The way an organization determines the benefit plans and salaries of its employees are directly related to the guidelines that are produced from certain Federal and State laws. A well known law and one that is at the top of the priority list for organizations to adhere to is the Fair Labor Standard Act. Business organizations should be very familiar with this law. The law deals with the five major laws of compensation. They include minimum wage levels overtime pay, record keeping responsibility and the child labor act (Martocchio, Joseph J (2009). Through the years there have been adjustments made to the laws. Another law closely related to the Fair Labor Standard Act is the Equal Pay Act of 1963. This act restricts the difference in the salaries given to make and also female employees in the same position (Martocchio, Joseph J (2009). The act does not however restrict the system of seniority, the system merit and the system that rewards for performance. The act also does not pay attention to the exempt and non-exempt status of the employees. The laws that exist to protect employee is known as the consumer......

Words: 809 - Pages: 4