Abstract This paper addresses the question of whether an organization can identify the compensation strategy that is most effective for it and how it can establish a methodology to ascertain what that compensation strategy might be. The paper includes a completed review of the relevant literature as well as a research design methodology. Finally, the importance of compensation strategies to contemporary organizations is noted and personal reflections of the author's relationship with God are revealed as central to the development of this project.
Outline:
Abstract
Problem Statement
Research Objectives
Literature Review
Importance of Study
Research Design
Budget
Measurement
Reflections
From the Paper "Compensation strategies typically fall within the functional control of human resources (HR) within most organizations. HR management has become one of the last remaining functional areas of an organization where differentiation can be achieved in the marketplace and where competitors might still be appreciably out performed. The reasons for this revolve around the ubiquitous and relative inexpensive character of technology and technological applications that have levelled the competitive field across all industries. Essentially, no matter where a company is located it can access and deploy the very same technological solutions as any other competitor; thus, organizations have determined, and correctly so, that human resources are a vital source of competitive edge if managed properly. "
Abstract Employers are constantly looking for ways to attract qualified employees, and bonusplans have been a driving force in the business world. In recent years, the consequences of such plans have been carefully scrutinized. This paper examines some of the consequences that companies face when they make a decision to implement bonusplans. The discussion focuses on steps that can be taken to avoid the negative consequences of bonusplans, which include animosity among workers, lower productivity, and poor employee loyalty.
From the Paper "The article, "Bonus Plans: Why Most fail" explains that one of the best ways to avoid the negative consequences of bonus plans is to simply offer a fair wage. (Porter 2003) The author argues that the consequences associated with bonus plans could be eliminated if employers offered a living wage that is higher than that of similar companies in the same community. (Porter 2003) The author contends that offering a living wage coupled with holding employees accountable for their performance, will create the benefits that a bonus plan offers while avoiding the consequences that bonus plans present. (Porter 2003)"
Abstract The paper discusses how companies use compensation as a means of employee motivation. The paper examines various methods of worker's compensation, including 'equity-based' compensationplans, wherein ownership of the company is offered to the top workers of the company. The paper further examines incentive plans such as 'profit-sharing', wherein the company will undertake to donate a small percentage of its pre-tax profits to a savings pool, which would later on be divided among deserving employees. The paper concludes that a good compensationplan leads to better employee motivation, and increased efficiency, output and productivity.
Outline:
Definitions of Compensation Goals of compensation Different types of compensationplans generally used by a company
Methods generally used to determine compensation Why do compensation packages differ?
Conclusion
References
From the Paper "As far as human resources are concerned, compensation refers to the pay structures within any particular organization. Some of the primary issues regarding compensation are: how much is a company to pay a worker, in order to attract him, and then keep him, and then keep him completely motivated so that he does not move over to another company. Must the company offer to pay the employee a salary, or rewards? Must the company pay benefits to its workers, and if so, what must be the amount, and how exactly must it be paid? Can there be a distinct difference regarding the pay scale for high performers, as compared to that of lower performers? Would it be a better idea if the company were to provide stock options and stock bonuses for the employees of the company?"
Abstract In this article, the writer looks at the ethical elements of the discussion regarding bonuses and compensation for the CEO of an organization. The writer maintains that it is ethical for CEO's to receive large compensation packages, but only if it is inclusive of benefits for all stakeholders, not at the expense of them. The writer notes that the best way to do this is through long-term compensation packages that focus on long-term commitment and vision. The writer discusses that these packages must also focus on long-term profitability and growth for the organization, job security for employees, and return on investment for shareholders and other investors. The writer concludes that ultimately, CEO compensation should realistically follow measurable performance that benefits all stakeholders, not just a few.
From the Paper "The argument designating increasing CEO pay and decreasing shareholder value as unethical is an easy one to make. There is, however, a case to be made on the other side of the issue. Some argue that increasing CEO compensation is a simple matter of supply and demand and is driven by market forces. Others argue that the transition costs of replacing a CEO could be considerably more than the bonuses they receive. Yet another argument is that market fluctuations are inevitable and increasing bonuses are needed to retain top talent and that the investment will pay off over time. Eamonn Walsh goes as far to say that some CEO's are actually underpaid when comparing CEO compensation to stock value. It should be noted that this article focuses on the European market were CEO compensation is generally lower than in the United States. Research has shown that organizations in which their CEO's are compensated in the top 10% have an 80% percent chance of their stock outperforming their peers. Of this group the gains in market capitalization far exceeded the CEO compensation package about 80 percent of the time. On the other hand, organizations offering the lowest compensation had only a 50-50 chance of outperforming their peers."
Abstract This paper discusses the seemingly ludicrous executive compensation packages. The paper attempts to distinguish the relationship between company success and executives' efforts, claiming this to be an indication of how much an executive should earn. The paper examines the different components of high level executive compensation packages: High salaries, large bonuses, generous perquisites and so-called golden handshakes and parachutes.
From the Paper "Sometimes it seems that the salaries executives make at big corporations are entirely out of proportion with the value added to the firm by their being on the payroll. It makes sense that if someone, anyone, makes a certain wage, then they should be making at least that much money for the company. If someone is pumping gas for $7/hr, then he should be pumping at least $7 worth of gas every hour. If someone else is making $30 million/year at a big corporation, then he should be bringing in at least that much revenue, even if only indirectly. If a $30 million/year executive starts programs at the company that make $100million, then the $30 million the company pays him is well-worth it. The trouble is that it is sometimes hard to decide the degree to which company performance is the result of an exec's contribution."
Abstract This paper explains the executive compensation policy of Rite Aid Corporation, a publicly traded company. The author contrasts the company's executive compensation policy with that of its chief competitor. The paper suggest several ways to enhance a company's policy to minimize agency conflict and maximize shareholder wealth.
From the Paper "Rite Aid Corporation is a drug store chain. The stated objectives of its Compensation Committee are to support the achievement of desired company performance, to provide compensation and benefits that will attract and retain superior talent and reward performance and to fix a portion of executive compensation to the outcome of the Company's performance. The executive compensation program includes a base salary performance bonuses and long-term incentives in the form of stock options. Stock Appreciation Rights known as SARs stock-based awards and restricted stock awards ..."
Tags: executive compensation programs, Longs Drug Stores, Rite Aid Corporation, bonus, salary, short term incentives, long term incentives, compensation committee, variable compensation
Abstract The paper presents an overview of the compensation management program for Hallen Corporation, which employs fifty people. The paper provides a legal analysis of how the compensation program will be implemented and discusses the compensation strategy, inclusive of benefits and other indirect compensation.
From the Paper "To understand compensation management one must first understand what the term compensation refers to, and then decide how to "manage" it. Compensation is largely considered any "reward or payment for services performed" typically offered to employees of a company (Caruth & Handlogten, 2001). Compensation is not limited to financial incentives and direct incentives; rather, compensation may include wages, bonuses, insurance or other "monetary benefits" that the employer provides to the incumbents of a facility (Caruth & Handlogten, 2001). Compensation in a more defined sense is "total reward package offered by an organization to its employees" (Caruth & Handlogten, 2001:2)."
Abstract This paper critically analysis some of the issues and concerns of the compensation and the benefit models used in the IT industry. Many similarities as well as differences are observed based on the job scope, the nature of the core business and the location of the business. The effort of this study is to ensure that the best possible model is introduced.
Table of Contents
Introduction
Discussion
The Pay Model
Strategic Perspectives
Internal Alignment
Job Analysis and Evaluation
Person-Based Structures
Competitiveness and Pay
Pay for Performance and Performance Appraisals
Benefits Determination and Benefit Options
Extending the Compensation System - Special Groups
Managing the System - Government & Legal Issues
Conclusion
From the Paper "IT encompasses design, installation and maintenance of computer hardware, software, and a forum for collection, processing, storage, presentation, archiving and retrieval of information. The concepts of processing information collected using all the capabilities of a computer (hardware, software, databases and storage technology) and the networks linking the components of computers together to share information as and when needed is referred to as Information Technology. It is clear therefore, that IT industry employs individuals within a wide range of job scopes. As a consequence, the motivating factors that are required differ considerably. Compensation and benefits are an important factor in the motivational theory models used in organization."
Abstract This paper examines three different types of compensation and rewards programs that can be useful to a company- merit pay rises, skill-based pay and sharing. It shows how, in order to make a comfortable environment for every employee, the human resources department needs to take more than one compensation and rewards program into consideration.
From the Paper "Another type of reward and compensation program is called a profit sharing plan. A profit sharing plan is when a company "rewards employees based on the entire organization's performance." (Schermerhorn, Hunt, Osborne p.179) While working for Ridgefield Bank I received a couple of "bonuses" based on a percentage of the company's profits. This is a bad type of compensation and rewards program because "it tends to use a mechanistic formula for profits allocation and does not utilize employee participation." (Schermerhorn, Hunt, Osborne p.179) In this profit sharing plan the company did not use it as an employee retirement plan they used it as a reward to their employees."
Abstract This paper presents a brief case analysis involving the comparison of two incentive compensationplans for the company Houston Fearless 76, Inc. The paper focuses on four issues centering on compensations incentive plans.
From the Paper "This case analysis focuses on four issues. The first issue is the extent to which there exist any significant impediments to the implementation of a proposed new compensation incentive plan for the company. The second issue is the appropriateness of the focus of the new compensation inventive plan on outcome performance levels below the gross margin line. The third issue is the need, if any, for modifications to the proposed new compensation incentive plan. The fourth issue is the structure of compensation incentives for..."
Abstract This paper examines the major benefit and compensationplans in the United States. It includes a discussion of health care, stock options, and other benefits. It discusses compensation including hourly wages, salaries and commissions.
From the Paper "A comprehensive benefit program for employees of a company would include all of the following elements: A choice of health care options for employees and their family members. This would include access to one or more Health Maintenance or Preferred Provider Organization programs; An option under which an employee that opted out of the company's health care program would be given a monthly cash incentive instead; A dental care program for the employee and family members..."
Abstract This paper examines the viable options for personal retirement saving: Individual Retirement Arrangement (IRA) and the Roth-IRA. The paper describes the tax benefits of the funds and the annual contribution limits. It provides complex information on stock option plans and stock ownership plans. The paper is packed with statistics and charts on the financial benefits for these plans.
Table of Contents
1. Individual Retirement Arrangement (IRA) and Roth-IRA
2. Traditional and Roth IRA
3. Annual Contribution Limits
4. Employee Stock Ownership Plan (ESOP) and 401(k) Plan 5. Incentive Stock Option Plan 6. References
From the Paper "Generally called an Individual Retirement Account is a personal retirement savings plan that is available to anyone during the year who receives taxable compensation. For contribution purposes of IRA, compensation includes salaries, alimony, fees, wages, bonuses, commissions, tips, taxable and separate maintenance payments (Quinn. 1998)."
Abstract This paper explains that employee compensation is not only a basic requirement of a business but also a powerful motivational tool. The paper describes the way that remuneration activities are supervised and regulated by the Association of Workers' Compensation Boards of Canada. The paper then relates and evaluates three available compensation systems from which the owner of The Fit Shop must choose. These systems are a basic pre-established payment per hour with no additional payments or remunerations, a basic pre-established payment per hour with a supplementary performances reward, or an incentive scheme similar to the basic rate schemes but with an incentive to stimulate performance.
From the Paper "The Fit Stop is a new store that will open and activate in the sporting industry selling fitness equipment to a wide variety of customers. The store will also offer complementary services, most often materialized in specialized assistance with the purchase of the most suitable equipments that fit the unique needs of all customers, such as certain neck or back pains. The specialized consultancy will come from a physiotherapist and a bachelor in kinesiology and the idea came to founder Susan Superfit while she herself was suffering from pains related to sporting activities and when she would have needed such assistance."
Abstract This paper is a sales organization plan for a new sales organization within an already established company. The paper focuses on the new product, TrashWagon, within Trash to Transportation Technologies. The plan addresses supply problems, quality control issues, and customer service shortcomings, in order to ensure a successful product launch.
Table of Contents:
Introduction
Product
Target Markets
Channels Of Distribution
Sales Organization
Territory Management
Internal Sales Organization
External Sales Organization
Budget Plan Year One Sales Forecast
Budget Administration
Sales Associate Staffing
Training
Motivation/Incentives/Compensation Customer Service/Satisfaction
E-Business
Code of Ethics
Administration and Account Management
Forecasting Utilizing Market Research and Technology
Conclusion
From the Paper "Trash to Transportation Technologies is a developing a new organization to sell the TrashWagon, a hybrid vehicle that operates on trash-based fuel in urban areas where such fuel exists. Not restricted to urban use, the TrashWagon can also operate on traditional fossil fuels, so despite its unique features it can operate virtually anywhere a conventional vehicle can.
Since Trash to Transportation Technologies has been driven by research and development until this point, the implementation of a sales department is the next step for the company before beginning to conduct business. Rather than develop the product to sell through distributors or wholesalers, Trash to Transportation Technologies has decided to sell the product through TrashWagon retail outlets using its own sales force. Management staff that has previously concerned itself with raising capital for research and organizational funding, will now be developing the sales organization."
Abstract This paper details the history of compensating employees for work, including various approaches used today. The author details sales compensation as compared to different methods of paying employees. The writer states that different methods of compensation depend on the actual work being performed. The paper concludes by citing the important connection between employee compensation and employee motivation.
From the Paper "Although archaelogists do not know the first time that humans worked for compensation, the first salaried work necessitated an advanced society that had some type of barter system in place that allowed work to be exchanged for goods and services. In addition, the society needed to have organized employers that agreed on how much should be given for how much work. From this, most infer that the first salary would have been paid in a village or city during the Neolithic Revolution, sometime between 10,000 BC and 1,000 BC (Wikipedia)."
