Case Study:
Part 1.
In an increasingly competitive job market it is important that businesses are equipped to offer the best benefit and compensation packages that they can. In studying strategic compensation, we are afforded the opportunity to learn about compensation and benefit design, as well as the laws and regulations that impact the implementation of benefit and compensation packages. There are several topics that are of particular interest, some of which are discussed below.
One topic that is particularly interesting is retirement plans. The type and availability of various retirement plans has changed dramatically over the past few decades. As our text notes, there has been a fairly substantial decline in defined benefit plan participation, while participation in defined participation plans (Martocchio, 2015). The number of companies that offer employer-sponsored pension plans has also decreased dramatically, with many businesses favoring 401k-type programs, which have favorable tax advantages to both employees and employers. It is important to know the types of retirement plans that are attractive to employees, and manageable for employers. The issue of health insurance, as a part of retirement benefits, is also interesting, and merits additional study.
As someone who has worked for many years in what is considered a flexible job, compensating flexible workers is also of particular interest. One advertised benefit of flexible work is the ability to adapt the work schedule to fit personal needs. Another feature touted by many organizations that use flexible workers, is increased pay in lieu of benefits. Despite the lack benefits such as vacation and sick time, those who use flex employers are required to pay overtime for hours worked greater than 40, as well as paying the premiums for workman's compensation insurance, among other benefits (Martocchio, 2015). It would certainly be beneficial for me to learn additional information about what types of benefits are legally required, and what benefits an employer might consider offering.
The third topic that I would like to learn more about, is building pay structures that reward employee contributions. When considering these types of plans, one would likely think first of the traditional incentive program found in many sales jobs. Indeed, these commission plans are quite popular but they have a number of variations. Martocchio (2015), notes plans such as the salary-plus-bonus plan, which pays a base salary as well as a bonus for achieving a particular goal, as well as commission-plus-draw plans, which allow the worker to "draw" money for sustenance, while encouraging hard work through the use of commissions. Other plans exist as well.
In addition to the topic of commissioning though, reward structures also include the experiential model of promotion. In this system, the employer creates a number of "steps" for each position in the organization. The general work of the position remains the same, from level to level, while additional responsibilities are added to higher levels. This system helps to make clear the expectations that come with each level of a job. Another tool commonly used with the step system is pay ranges within each step. By incorporating pay ranges within steps, the employer can provide additional compensation to employees who perform well, but who are not ready for promotion, or for whom there are no positions available.
This will certainly be an interesting semester, and I am looking forward to learning about the many aspects that comprise strategic compensation.
References
Martocchio, J. J. (2015). Strategic compensation: A human resource management approach (8th ed.). Pearson.
Part 2.
As a Career/Transition Counselor, we often talk to Service Members about making the transition from Military to Civilian and the differences between the two. We spend a good amount of time discussing compensation and benefits. Through this class I would like to learn more about types of performance appraisal plans, flexible work schedules and discretionary benefits in particular paid time off.
Types of performance appraisal plans
Performance appraisals are a company's way of telling employee based on their expectations how they are doing. This process is important because as employees one often does not know much about the rating process including why and how one is being rated. There are four different types of categories for these appraisals: trait systems, comparison systems, behavioral systems and goal-oriented systems. Trait system evaluates the traits or character of an employee to include "quality of work, quantity of work, appearance, dependability, cooperation, initiative, judgement, leadership responsibility, decision-making ability or creativity" (Martocchio, 2015, p. 60). Comparison systems, compare one employee's performance to that of other employees. One type of comparison is forced distribution, where the rater is forced to put a certain amount of employees into performance groups. Behavioral systems, rates the employee based objective job behaviors. Goal-oriented systems, employees are rated based on agreed upon goals set by the rater and employee.
In my job, this new knowledge can be used to explain the rating process to Soldiers, especially the differences in Military and Civilian ratings. Although there is a rating system in the Military it is connected necessarily to a merit pay system.
Flexible work schedules
Increasingly more and more jobs are offering flexible work schedules. These flexible schedules include: flextime, compressed work schedules and telecommuting. Flextime allows the employee the flexibility of hours to work during a certain core time. Compressed work schedules are geared toward less days. Usually these schedules would include 10 or 12 hour days over a shorter number of days. Telecommuting allows employees to work from home, either completely or a certain number of days per week.
Every type of flexible work schedule has it advantages and disadvantages. Through this course I would like to learn about those. This will better help me as I am looking at jobs for myself or as I am working with Soldiers who are looking at jobs with flexible work schedules.
Discretionary Benefits
Discretionary benefits are benefits that are offered at the company's will. These benefits have three categories: protection programs, paid time off and services. Protection programs cover four areas: income protection, life insurance, retirement programs and health protection programs. Income protection programs include disability insurance, which includes short-term and long-term disability. Short-term disability provides benefits for less than 6 months. Long term disability includes a time frame of 6 months to life. Life insurance is usually provided by the employer for the employee. Life insurance is either term life insurance, whole life insurance, or universal life insurance. Term life provides coverage over a certain amount of time based on a set number of years. Whole life provides coverage until the employee is deceased. It covers the whole like of the person. Universal life has features of both term and whole life insurance.
Retirement programs also called pension plans, provide income during retirement to the employee and their beneficiaries. Health protection programs is health insurance.
Paid time off is compensation when the employee is not completing primary work duties. Paid time off includes: "holidays, vacation, sick leave, personal leave, jury duty, funeral leave, military leave, clean-up, preparation or travel time, rest period "break", lunch period, integrated paid time off policies, sabbatical leave and volunteerism" (Martocchio, 2015).
Through studying this concept, I will learn more about the discretionary benefits afforded to me as well as helping Service Members when it comes to them comparing benefits for companies.
References
Martocchio, J. (2015). Strategic Compensation: A Human Resource Management Approach. Upper Saddle River: Pearson Education, Inc.