The executive team and the human resources department are the ones that usually develop the compensation philosophy’s. The compensation plan is based on different factors, for example, the organizations financial position, the salary information, the size of the company, and the level complexity in discovering qualified people based on the economy. The compensation philosophy has to be evaluated on a regular basis, to see if any modifications are needed. For example, it may be difficult to find qualified people in a certain field, and the employer may have to up their pay scale to gain the employees that are needed. A strong compensation philosophy reinforces the company’s strategic plan and proposals, operating objectives, business goals, competitive position, and compensation and all reward strategies (SHRM 2015).
Compensation philosophy that I would use for a fortune 500 company would include these compensation objectives: plan that will reinforce the link between pay and performance this happens when you use a balanced scorecard approach with monetary metrics and non-monetary objectives in sequence that would improve risk-adjusted returns to shareholders. The company should offer incentive compensation that would be in the form of equity that employees could have owner-ship and to coordinate employee interests so that it aligns with the stakeholder and shareholders. (CITI’S, nd)
Maintaining strong capital ...
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...ompensation could be incentives that an employer chooses to give their employees, which are not legally required to give. For example, paid time off vacation, sick, personal and bereavement time. And employer can also offer medical, dental, accidental, disability insurance, a company cell phone, educational assistance, company car, retirement plans and other benefits (Ferguson, 2016).
The mandatory benefits that an employer is required to give are Medicare taxes, Social Security, these are paid for retirement purposes, or disabilities. Most business pay federal and state unemployment insurance. All business should carry worker’s compensation insurance for employees that may become hurt on the job and can’t work. Some states require you to carry disability insurance coverage for non-job-related illnesses or injuries (Ferguson, 2016).
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