Art Hallen Corporation Compensation Management Program Compensation Management 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)
Employees will also be subject to pay that is performance related. This means employees may have the same skill set, but the employee that provides the company with outstanding performance daily is more likely to receive pay incentives including corporate bonuses at Hallen Corporation than an employee that performs "average" on any given day (Martin, Bartol & Kehoe, 2000)
This occurs after five years of service, although employees are 20% vested after two years and 20% more for each year after (Caruth & Handlotgen, 2001). There are also legal requirements that will govern other areas of benefits including COBRA (White & Druker, 2000)
Compensation Management What changes are occurring in the workforce relative to the kinds of work employees are performing? Employers are more apt to bestow performance-based pay because of the greater competition in the global marketplace, the greater need for skilled employees, and the shift to more service-based and knowledge-based work (Henderson, 2005, p
If firms are less competitive, they will ultimately be forced to reduce the size of their workforces, so the minimum wage will cost the economy jobs (Saxton, 1996). Some would argue that the jobs lost were not good jobs anyway (Landsburg, 2004), but this argument disguises the fact that job losses are a symptom of a decline in the nation's economic performance
From the company's perspective, these cost increases also make the firm less competitive against foreign competition not subject to the same cost increases. If firms are less competitive, they will ultimately be forced to reduce the size of their workforces, so the minimum wage will cost the economy jobs (Saxton, 1996)
Reducing expat costs can be done by attacking the largest sources of expat costs. These most significant costs are assignment allowances, which can be up to 35% of costs, property costs (35%) and relocation costs (15%) (Friedman, 2010)
Therefore, a human resources department committed to reducing expat costs should consider focusing expat recruitment efforts on employees without families. Another factor affecting early returns is local language skills (Selmer, 1995)
This pitfall can be alleviated with better goal-setting on the part of the management. When all workers are treated as average by the compensation system, they will only strive for average results (Zenger, 1992)
In order to control these costs, employers must first understand the nature of these costs. The most obvious solutions -- to not offer health care -- is a non-starter, since almost every company over 200 people offers health care benefits (Christianson & Trude, 2003)
Employers believe that one of the keys to containing health care costs is in to change employee health care usage patterns -- in other words to reduce demand created by employees for health care that is paid for by the employers. One of the major obstacles to changing usage patterns is that employees typically feel that they are "effective healthcare consumers" and that addressing the issue of rising health care costs is the responsibility of the company (Davis, 2003)
HSAa and HRAs can be offered in conjunction with a modified insurance plan that covers more extreme circumstances. Such a plan can be low-premium and high-deductible in nature (Zirkelbach, 2007)
A high level of seniority in a workforce can be expected to have a number of positive outcomes. Workforces with a long average tenure tend to have higher productivity, better congruence with organizational values and culture, a shorter learning curve, fewer accidents and higher overall quality (Auer, Berg & Coulibaly, 2005)
Under such a scenario, compensation-based pay's tenure incentives are ineffective with the best workers and only truly effective with the least productive and least desirable members of the workforce. Also, seniority-based pay has the macroeconomic effect of reducing flexibility in times of change in an industry (Bejaoui & Montmarquette, 2008)
Another response is to utilize only numeric measures, effectively eliminating subjectivity and allowing all employees to know ahead of time on what they will be measured. Another key success factor in the development of a merit-based system is that the employee should be involved (Cohen & Murnane, 1985)
Such a system can especially be perceived as unfair by older employees, who grew up in an era when seniority-based systems were the norm and may even have started their career under such a system and see the present day as their payoff for years of working hard for little pay when they were younger. There is also a greater risk of perceived unfairness in merit-based systems when a significant component of the employees' performance evaluation is based on qualitative outputs, which tend to be evaluated at the discretion of the manager (Heneman & Werner, 2005)
A prime example of a poorly-designed merit-based pay system comes in discussions of executive pay. Executive compensation is a relevant way to articulate some of the issues associated with merit pay because so-called "exempt" employees are the most common recipients of merit-based pay (Petty, 2002)
If an employee receives all allowances that would minimize the difference in living conditions in host and home country then it will definitely bring positive change in the motivation among the employees for foreign assignments. (Atchison, Belcher & Thomsen, 2000) 14A
Different survey analysis techniques can be used like cohort analysis and cross classification analysis to rightly assess the collected data. (Chromy & Abeyasekara, 2005, pp
Generally there are three forms of profit sharing plans that are cash plans, deferred plans and third one is the mix of both cash and deferred plans. (Coates, 1991, p