Free Essay

Organizational Objectives and Total Compensation

In: Business and Management

Submitted By sheilaokane
Words 476
Pages 2
Organizational Objectives and Total Compensation in Different Markets
Sheila E. O'Kane
March 25, 2013
Ken Zula

Organizational Objectives and Total Compensation in Different Markets
An analysis of current laws and regulations on organizational objectives and total compensation is the purpose of this paper. As a Human Resource consultant the primary objective is to provide the client’s organization with the information knowledge of the laws and regulations that impact compensation. Armed with this knowledge the organization is able to develop a total compensation plan that is in alignment with the firm’s strategic plan. The laws that influence compensation practices are designed to help “ensure that pursuit of goals by any one group does not undermine others’ goals” (Martocchio, 2009, p. 49). These laws make sure that the employees who have the “least amount of power” (Martocchio, 2009, p. 49), are protected.
The client organization has 200 employees and provides goods and services to the federal government under contract. There are several laws that the organization must adhere to as a federal contractor that affect total compensation.
The most prevalent affect comes from laws surrounding wages. These laws fall under the heading of Prevailing Wage Laws. One such law that applies to the client organization is the McNamara-O’Hara Service Contract Act of 1965. Contractors who employ service workers such as plumbers and electricians must pay “at least the minimum wage specified in FLSA” (Martocchio, 2009, p. 55). If the firm’s contract with the government is valued at $2,500 or more the firm must also pay the prevailing wages of the area, and fringe compensation that is “equal to the local prevailing benefits” (Martocchio, 2009, p. 55). Another law that the firm must be aware of is the Walsh-Healey Public Contracts Act of 1936. This act covers “all of the contractors’ employees except office, supervisory, custodial, and maintenance workers who do any work in preparation for the performance of the contract” (Martocchio, 2009, p. 62). If the value of the firm’s contract with the government is $10,000 or more the organization must adhere to the guidelines that address “wages, hours, child labor, convict labor, and hazardous working conditions” (Martocchio, 2009, p. 62). Organizations in the same industry but not engaged in a government contract are not subject to these regulations.
Based on these two laws alone total compensation for two organizations in the same industry, employing the same number of people, could differ greatly. Firms that pursue and engage in government contract work must be keenly aware of these and other employment laws that they are subject to by virtue of the contract. Failure to conform to these regulation can result in the losing the contract which can seriously cripple a company.

Martocchio, J. J. (2009). Strategic compensation: A human resource management approach (5th ed.). Upper Saddle River, NJ: Pearson Education.

Similar Documents

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

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” (, 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

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


...         Identify advantages and disadvantages of internal and external equity for the organizations.                     Explain how each plan supports that organization’s total compensation objective and the relationship of the organization’s financial situation to its plan. Format your paper consistent with APA guidelines. Introduction All organizations value the compensation as a vital factor when trying to recruit and retain the appropriate staff. This will also help reduce turnovers within a company. The importances of external and internal equity are highly recommended. This paper will illustrate the total compensation plan for an organization focused on external equity and internal equity. This paper will also identify the advantages and disadvantages of internal and external equity for the organizations. By doing this I will explain how each plan supports the organizations total compensation objectives as well as the relationships of the organization’s financial situation to its plan. Internal and external equity Intel is an organization that practices using internal equity. Internal Equity method undertakes the job position in the organisational hierarchy (2007 This process aims to help balance the compensation provided to a job profile. This helps ensure that there is fairness between job rankings, job classifications, and level of management. Intel using this to ensure that their employees are being compensated......

Words: 890 - 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

Free Essay

Human Resource Research Paper Aflac

...Mauricia Thomas-Francis …………………………………………………………………………………………………. Course Name: Human Resource Management Course Number & Section #: MG211-201 Submitted By: Nita D. Pascal Student ID#: 0156616 Date of Course: Spring 2014 Semester: August 2, 2014 Title of Assignment: Case Analysis: AFLAC Insurance Table of Contents Executive Summary In light of the current economic situation, employee benefits have become a major concern and are surfacing in many conversations of HR professionals. Human capital is by far an organization’s most valuable asset and at that a huge expense. In an attempt to keep cost low, to remain competitive, many organizations are forced to either reduce or completely disregard certain elements of their total rewards programs. This has not always been an easy decision, because on the flip side of the coin, the availability and quality of a company's benefits remains one of the major factors affecting an employee's morale, influences their decision to remain in the business and more so can determine whether or not a qualified employee accepts a job in the first place. What if a certain organization offered rewards that incurs next to nothing or absolutely no costs at all for the employees, and allows them to receive a benefit which cost couple of hundreds of dollars a year? At Aflac insurance company, the reality of this is attainable. Aflac has long understood the importance of rewarding employees with meaningful benefits, handsomely pays......

Words: 3438 - Pages: 14

Premium Essay

Performance Management System and Total Rewards Plan for Weavertech

...Performance Management System and Total Rewards Plan for WeaverTech Southern New Hampshire University OL 600 Strategic Human Resource Management INTRODUCTION Due to the acquisition of WeaverTech formally known as Johnson-Ware an apparel company by CVX Partners, a private equity firm, there arose a need for the company to change its line of business to high-end segment of the apparel industry (Beer & Swier, 2015). Before the acquisition of the company by the new owners, WeaverTech was a closely owned family entity that had been formed in 1905. Before the proposal to change the company customer base, the company exclusively relied on the military (70%) and security (30%) as the only customers for the company products. The need to change the company customer base from military and security to high-end performance clothing market apparently arose from the allure of the later market segment and the dwindling growth of the military and security market (Beer & Swier, 2015). In fact, at the end of the 2012 WeaverTech fiscal year, the company had dropped 12 places among the top 30 privately owned American entities. In addition, the departure of Jack Davidson a retired US Navy rear admiral, WeaverTech CEO from 1983 to 2012 as well as the end of the Afghanistan and Iraq wars meant that the traditional, market was no longer going to be reliable. Consequently, there was need to redesign the company customer base and take advantage of the high-end......

Words: 1743 - Pages: 7

Free Essay

Riordan Manufactoring

...accompanied alternative solutions that have a long-term focus. An optimal solution will be identified along with an implementation plan with meaningful end-state goals that support the vision of the organization. Situation Analysis Issue and Opportunity Identification Riordan Manufacturing has developed various processes and procedures to manage the business. The organization maintains a heavy focus on research and development with a strong sales force to help distribute the various products. Manufacturing plants are situated in Pontiac, Michigan; Albany, Georgia; and Hangzhou, China with the corporate headquarters in San Jose, California. With rapid growth and expansion Riordan Manufacturing has begun to experience issues that will impact organizational goals and strategic plans. The key issues affecting the organization center on employee motivation, employee...

Words: 4698 - Pages: 19

Premium Essay

Activate Your Network

...Organizational objective and total compensation in different markets Yolanda Merritt HRM 324 Organizational objective and total compensation in different markets While compensation laws are characterized in order to create non-discrimination in the compensation provided to employees in the organizations. However, depending on the industry that the company is working in the way employees are compensated may be different. Nevertheless, compensation laws and regulations are just about the same regardless to the industry However, if employees are working the area of biotechnology the employer would be required take special care concerning the compensation plan. It is believed that employees that work in the biotechnology industry are exposed regularly to health and security hazards. The biotechnology industry is also believed to involve in world shattering implications that may consist of moral and ethical issues. I have listed some of the laws relating to the compensation plan in the Biotechnology Industry that will assist with the identifying the different The following are some of the laws relating to compensation plan in the industry that helps in identifying the different aspects of pay; For example the Fair Labor Standards Act (FLSA) consist of five major compensation laws that regulates minimum wage, overtime pay, equal pay, recordkeeping requirement, and child labor. For the most part the FLSA regulations impact non-exempt employees.......

Words: 358 - Pages: 2

Premium Essay


...Muhammed Mughni Atique (Hons), Business Administration Gift University Gujranwala IMPACT OF HUMAN RESOURCE PRACTICES ONORGANIZATIONAL PERFORMANCE: A STUDY OF BANKING SECTOR OF GUJRANWALA Keywords: Organizational Performance, Employee Satisfaction, Recruitment &Selection, Training & Development, Performance Appraisal and Compensation Abstract: The purpose of this study is to evaluate HRM practices and their impact on organizational performance in banking sector. People believe that HR is not important it’s just a sunk cost and have no significant positive effect on org. performance. The aim of this study was to check the impact between Human resource management and organizational performance. The research was conducted in banking sector of Gujranwala .We have evaluated the impact of functions of HR like Selection, Training, Appraisal and Compensation (as Independent Variables) on Organizational Performance (Dependent Variables). We have done research with the help of questionnaires. The conclusion and results are presented at the end of this paper. The analysis showed the positive relation between the dependent and independent variables. Introduction: Our financial sector evolved very differently from banks in the developed world. For nearly a year after partition, Pakistan had no central bank. Habib Bank – established in 1941 – filled this gap initially, until the State Bank of Pakistan (SBP) was set up in 1948 under quasi-government ownership.......

Words: 3415 - Pages: 14

Premium Essay

Course Syllabus

... |School of Business | | |MGT/431 | | |Human Resource Management | Course Description This course focuses on the strategic role of human resource management, personnel planning and job analysis, personnel selection, performance appraisal, compensation, training, and development from the vantage point of the manager. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality. Course Materials Noe, R. A., Hollenbeck,......

Words: 2432 - Pages: 10

Premium Essay

Role of Compensation

...Role of Compensation Paper Beverly L. Clanton University of Phoenix HRM 424 Will Dorrieu 05/27/09 Role of Compensation Paper Explain the role compensation plays in the achievement of organizational goals. To any successful organizations a solid compensation system is critical. In order to attract qualified applicants to an organization and retain them, one must first provide mechanisms. Compensation plays a very important role in attracting the best talent in the organization as well as retaining them for a long time. It thus helps in creating a solid human resource responsibility in the organization which enhances the productivity, efficiency as well overall quality in the organization. A sound human resource infrastructure with the appropriate set of employees possessing the proper set of skills for the right job is critical to the success of any organization, which is perfectly achieved via a suitable compensation plan. Further, in order to avoid high attrition levels, compensation plays a key role in retaining the top talent in the organization. To maintain high standards of productivity and service, the organization must motivate employees. A suitable compensation, incentives and rewards program is the key motivator in any organization today. In order to motivate employees and boost their morale to achieve desired performance levels and goals, compensation plays a key role as in order to achieve more incentives and compensation, employees raise their......

Words: 721 - Pages: 3

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 430 Course Project

...Compensation and Benefit Strategy of an Organization Jane Q. Student DeVry University Professor Dibenedetto June 23, 2013 Abstract: The aim of this paper is to examine the compensation challenges within Owens & Minor and create a compensation strategy that will benefit not only the company, but the employee. With the constant change in today’s business world, to have a competitive advantage makes it difficult for employers to attract and retain the most talented employees. Identifying the company’s compensation strategy ensures the organization offers the right pay and manages the pay increases to retain top talents. When we hear the word compensation we think about compensating an employee for their work performed, but there is much more to compensation and a company’s strategy than what a person is paid. Compensation and benefits, “includes not only salary, but also the direct and indirect rewards and benefits the employee is provided with in return for their contribution to the organization. To determine compensation, organizations should develop a compensation and rewards program that outlines an equitable process for compensating employees” (“Compensation and Benefits,” n.d.). This plan is an extremely important piece of the overall HR approach to keep the company competitive and successful in the global market. Throughout this paper we will discuss the compensation and benefits strategy of the organization and recommendations on how to create a......

Words: 2720 - Pages: 11