Compensations and Benefits
Compensation and benefits are vital in maintaining morale/satisfaction, encourage performance, and organization loyalty. Furthermore, it helps organization to internal and external equity and reduce turnover. FedEx is an industry leader in US air freight and maintain high revenues growth while controlling market share. As stated in the case, FedEx was changing the traditional pension plan to a cash balance plan due to recent accounting rule changes and employees desired to make pension plan more portable.
Two key problems that FedEx faced pertaining to compensation and benefits: (1) FedEx must determine the best account exclusive compensation plan for the combined of FedEx Express and FedEx Ground services that is in accord with the recent accounting rule changes and (2) FedEx must decide how to appropriately evaluate the understanding and successes of the new cash balance plan along with a positive acceptance from all employees. The new cash balance plan employees’ will receive annual pay credits based on points system and the combination of age and service will can range from five percent to eight percent of the pay. The problem is FedEx will cap their contribution $500 with no inflation protection. To ensure both internal and external equity, FedEx must establish an effective compensation benefits packages by conducting the following: (a) job analysis (carefully analyze and define each job inside the organization), (b) job evaluation (decide what jobs are worth on an absolute basis and relative to other jobs in the organization), and job pricing (establish rate ranges for each labor grade). It can be challenging for FedEx to figure out which type of compensation program provides the most incentive fo...
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...putes. The NRLA protects the right of employees to form, join, and be represented by a union, it is far more difficult for employees to organize under the RLA than it is under the NLRA. With this in mind, only a small segment of FedEx employees are unionized (pilots) while truck drivers, package handlers, dispatchers, and other FedEx ground transportation employees are not unionized. However, in 2009, the Congress passed a Federal Aviation Administration (FAA) that would place all FedEx Express workers, except for pilots and aircraft maintenance employees, under the NLRA. FedEx implies that the provision would affect all express-delivery workers except pilots and mechanics about two-thirds of their employees. Unionizing such a large portion of their work force FedEx says the new law could open it up to strikes and work slowdowns that would threaten its reliability.
In early August of 1997 the United Parcel Service (UPS) had a predicament on its hands, a teamsters strike. UPS, the world’s largest package distribution company was coming off a year [1996] in which they reported sales of $22.4 billion. UPS Employed 75,000 management and non-union employees compared with 185,000 teamsters who are part of the AFL-CIO that were going on strike. The teamsters rejected a contract extension offer from the company leaving the fate of millions of packages carrying everything from lobsters to laser printers up in the air (Johnson).
It is also the one of the hardest components for management to fulfill. GMFC needs to be an industry leader in pay as well as implement a merit pay policy for employees. Leading the industry in pay and awarding employees pay increases equal to or better than what the union can negotiate is instrumental to keeping the plant union-free (Fossum, 2012). Also basing pay increases on performance and skills learned is a great incentive to boost productivity and employee motivation. As an example, Volkswagen starts their employees the base rate the union would be able to negotiate keeping employees content (Greenhouse, 2014).
FedEx’s financial statements shows that its assets have not been utilized as well as other firms in their industry, but their profitability is better than other industry firms. Still they must decrease selling and administrative expenses while increasing sales.
The objective of paying our employees is to increase employee satisfaction and loyalty. Northwestern sends too much on recruiting and education to see a majority of its employee leave before they are able to have a full career as a financial advisor. By paying their employees northwestern is able increase employee productivity, increase the employee’s lifespan at the company, which will increase the number of clients northwestern will have as well.
Offering employee benefits is one way a company must competes in today’s marketplace to retain old employees and attracts new ones. These benefit packages may range from offering basic health insurance to additional discretionary and perk benefits such as vacation and retirement packages. Benefit packages are often a large portion of employee costs and Federal mandates require an employer to carry and offer certain benefits even if they offer nothing else. Federally required employee benefits make up approximately a quarter of the costs associated with employer offered benefit packages. Some of these mandated benefits include Social Security, Worker’s Compensation Insurance, and the Family Medical Leave Act.
The weakness of FedEx is actually its size. The corporation is so large it is costly to run and pay for employee salary and benefits (Ferrell & Hartline, 2011). They have even found themselves in legal trouble because they did not feel they could afford to provide their drivers benefits like all other employees (Ferrell & Hartline, 2011).
UPS and FedEx are the leading parcel carriers in the U.S. FedEx has significantly expanded their capability to compete with UPS’s dominant ground delivery service. UPS has continued its strong marketing efforts in overnight and deferred air services. Both of these carriers have introduced information systems, which include user-friendly Internet interfaces. The carriers have also expanded logistical services and improved integration with customer supply chains.
When American Express first came about, it would fit the assumed picture of a typical call center: a tall building filled with thousands of service agents aligned on every floor. For years, a typical work-day for each employee consisted of repeated, recorded, scripted, and timed phone conversations. Today, though, it is a whole new world. Today, no two conversations are the same. American Express finally realized that opening the gates and allowing employees be themselves would sell more product than ever before.
Many employees when looking for a job or deciding whether to stay with their current employment often considers the employee benefits the company offers.
...r investigate what sort of rewards or fringes would their employee’s desire compared to the old method of monetary incentives for the beneficial for the company”.
The above examples of pay show that the more skills, experience employees are with the organization the more they are compensated. Organizations would benefit by utilizing the same practice’s Disney extends to their workforces. For those businesses whose primary purpose of their plan is to only meet compliance requirements could greatly benefit by developing a comprehensive benefit plan. This could help increase their return on investment. The value I believe a business may gain from Disney’s compensation plan is to appeal to competent workers, to maintain those workers, and to motivate workers to direct their energies towards achieving the goals of the organization. Companies can set up policies to conduct a market study on a regular basis to implement a real performance appraisal system and then work on retaining good employees and elimination of poor performing workers. By following Disney’s lead of in obtaining those who best fit their company’s culture and supporting the company’s Mission. To guarantee that the pay structure is externally competitive, a pay survey should be shown. The results of a survey to be valid, the market pay data must be from the relevant labor market for each benchmark job. I would advise that a survey of regional and global pay data should be collected from the company, because for example, most of the office support, HR and operations jobs will be filled by local applicants. A job analysis is the procedure of reviewing jobs in an alike business. The result of this process is a job description “that includes the job title, a summary of the job tasks, a list of the essential tasks and responsibilities, and a description of the work context “(Burke, 2008). A job description consists of the knowledge, skills and aptitudes necessary to do the job. A job evaluation is the process of adjudicating the comparative value of job within a company
The succeeding paragraphs will explain how innovations in employee benefits can improve the overall competitive compensation strategy of the organization. In order to maintain their competitive edge, companies need to fully understand that as the needs of their employee’s change, so does their benefit plans. Companies need to find innovative ways of engaging employees that encourage and support their commitment and improve their performance.
Remuneration management is defined as the sum received for an employment or service delivered, this includes the money received on a monthly basis as well as benefits given as rewards (investopedia,para.1 ). Individualism need to be taken into account when implementing these remuneration structures or reward schemes, equal pay plays a role in balancing earnings among the diverse workforce (Shen, Chanda, D’Neetto and Monga,2009,p.241). The Woolworth’s Holdings uphold remuneration policies which have the purpose of making sure to attract and hold on to the best talent, that they are congruent with the strategies of the company and are the determinants of performance during the short and long phases. The policy considers the board members and the employees. This policy manages employees of the company by giving...
In 1913, C.J. Tower & Sons, forerunner to FedEx Trade Networks subsidiary FedEx Trade Networks Transport & Brokerage, begins operation as a customs broker in Niagara Falls, N.Y. It was not until 1971 that Federal Express Corporation was founded in Little Rock, Ark. In 1975, FedEx installed the first drop box for the public and since then the company developed and maintained a strategic leadership in managing a broad group of transportation services, e-commerce and other business services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Freight, a leading provider of regional less-than-truckload freight services; FedEx Custom Critical, the world's largest provider of expedited time-critical shipments; and FedEx Trade Networks, a provider of customs brokerage, consulting, information technology and trade facilitation solutions. (www.fedex.com)
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay