Compensation Philosophy : Employee Compensation Essay

Compensation Philosophy : Employee Compensation Essay

Length: 782 words (2.2 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Compensation philosophy is basically official statement recording the organization position about employee compensation. This explains the “why” of employee pay and produces a framework for stability. Employers can benefit from this if open about their compensation philosophy and having a proper pay strategy (SHRM, 2015).
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 ...


... middle of paper ...


...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).



References
CITI’S


Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Effects Of Compensation On Non Monetary Compensation Essay

- Compensation “Extinguishing intrinsic motivation, diminishing performance, crushing creativity, encouraging unethical behavior and fostering short-term thinking” are accidental results of focusing on monetary over non-monetary compensation (Delves, 2011, para. 5). Ellard Williams, Incorporated (EWI) is victim to most of these attributes without understanding the cause. Compensation affects motivation and corresponds to production and turnover (Aguinis, 2013). EWI requires motivational influences and a compensation plan inspiring employees to improve their performance and remain with the organization....   [tags: Motivation, Reward system, Quality management]

Better Essays
1061 words (3 pages)

Compensation and Benefit System Proposal Essay examples

- Holland Enterprises is on a new strategic direction, to attract and retain the most talented employees and to reduce turn over. Human resource department has came up with a new compensation plan. In the propose compensation and benefits system plan , I will explain a new compensation plan for Holland Enterprises, also I will explain the components of the compensation and benefit system plan in order to attract and motivate employees to be productive . In order for the compensation and benefits system plan to be operational, the package should include a necessary level of compensations to fulfill basic needs, equity with the external labor market, equity within the organization (Henderson...   [tags: Business Proposal ]

Better Essays
1078 words (3.1 pages)

Compensation and Cost Cutting: An Example of the BP Company Essay

- This form of compensation encourages and is encouraged by the “glorification of self-interest” or the “selfish syndrome” (Mintzberg, Simons & Basu, 2002, p. 67). Mintzberg et al. (2002) criticize Jensen and Meckling’s (1976) narrow view of economic man or homo-economicus, where everyone and everything has a price and corporations exist to maximize shareholder value achieved ostensibly by the ‘CEO as hero’. This pervasive “glorification of self-interest” and ‘CEO as hero’ are examples of extreme individualism that have resulted in senior executive pay and conditions exploding since the 1990’s, which continues today even after recent asset bubble crashes have left a trail of economic and socia...   [tags: Contracts, Employees, Management]

Better Essays
1009 words (2.9 pages)

Case Study Regarding Compensation / Discrimination At R & S Electronic Service Company

- Many businesses, employers, and employees are often faced with tough decision within the workplace that could forced them to make decision based on legal decision, moral decisions, and ethical decision. After reading the case study regarding compensation/discrimination at R&S Electronic Service Company, I have determined that all parties within this case scenario of stakeholders. Stakeholders are defined as any person with an interest or concern of a business. As we begin to identify the key stakeholders and their specific interest in the Family Business we must break down each individual and the role they play in the business....   [tags: Ethics, Immanuel Kant, Employment, Philosophy]

Better Essays
863 words (2.5 pages)

The Associate Director-Customer Service Position Essay

- The Associate Director-Customer Service position is responsible for the leadership of a work group and development of broad programs or projects in support of organizational or area strategies. Manage, communicates & translates functional/operational goals into team goals through professionals and supervisors the activities of a department. The Associate Director shall manage implementation of policies & procedures as well as maintaining results for costs, methods & employees. 1. Responsible for leading a team of supervisors with various experience levels....   [tags: Policy Implementation, Indirect Compensation]

Better Essays
1296 words (3.7 pages)

Performance Management and Employee Satisfaction, by Milica and Milos Jaksic.

- The study of PERFORMANCE MANAGEMENT AND EMPLOYEE SATISFACTION is written by Milica and Milos Jaksic. In this paper they trying to relate human resource management practices on performance management that help to satisfaction of employee. HRM measuring employee performance and having valuable feedback helps to get higher achievement and better performance within the organisation. Moreover trying to focus on managerial effort that will improve the employee performance as well there satisfaction on work and matching the overall organisational achievement....   [tags: organizations, achievements, workplace]

Better Essays
800 words (2.3 pages)

Essay about Relationship Between American Express And Employee Engagement

- Relationship Care Strategy American Express has taken steps to provide employees with objectives that reward the employees with exemplarily service records. This type of compensation known as “pay for performance, ties incentives to customer satisfaction surveys” (Colquitt, LePine & Wesson, 2013). In terms of pay for performance, is this technique really any different than an annual performance review. Does compensation given at more frequent intervals promote higher motivation levels compared to an annual compensation....   [tags: Motivation, Expectancy theory, Reward system]

Better Essays
724 words (2.1 pages)

Employee Incentives Essay

- Employee Incentives With today's workforce becoming increasingly diverse and organisations doing more to maximise the benefits of the differences in employees, Human Resource managers are evolving from the "old school" sideline player to the front-line fighters. Organisations are relying on managers to get the people who get the job done, and of course, make the company money. People have always been central to organisations, but their strategic importance is growing in today's knowledge-based business world like never before....   [tags: Papers]

Better Essays
2084 words (6 pages)

Benefits Of Compensation For Employee Compensation Essays

- In today’s society, there are a number of ways that compensation can be determine and there are a few salary trends that employers should be aware of in order to accurately pay employees based off his/ her qualifications and performance. Compensation has a very large impact on retaining and attracting employees and it takes a toll on the organizations profits (Mello, 2015). When an organization does not have a consistent pay scale and it not fair about how employee raises are given, it can really affect the attitudes and performance of their employers....   [tags: Employment, Employee benefit, Salary]

Better Essays
742 words (2.1 pages)

Employee Motivation : An Inner State That Arouses, Directs, And Maintains Behavior

- Workplace Motivation Motivation has been defined as “an inner state that arouses, directs, and maintains behavior” (Seifert & Hart, 2014, p. 328). “Motivation affects behavior by directing it towards the goal, increasing effort, energy, and persistence, and improving performance” (Seifert & Hart, 2014, p. 328). It has been said that work motivation “originates both within as well as beyond an individual’s being, to initiate work-related behavior, and to determine its form, direction, intensity, and duration” (Chuang, 2011, p....   [tags: Motivation, Maslow's hierarchy of needs]

Better Essays
1431 words (4.1 pages)