Compensation is one of the most important aspects of business. It attracts, motivates, and retains skilled employees; therefore, evaluating compensation correctly to meet the needs of the business and satisfy the wants of the employee is also extremely important. The aspects that Echo Inc. should consider when evaluating their compensation practices are the different limitations placed on pay, the benefits that are required by the government, optional benefits, and the different pay for performance plans.
When considering how to pay employees, a business must factor in the legal requirements of pay placed by the government. Government regulations affect pay by implementing the equal employment opportunity, minimum wage, overtime pay, and
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Although, company’s do not have to pay salary workers for over time. Two additional federal laws, the Davis- Bacon Act of 1931 and the Walsh-Healy Public Contracts Act of 1936, govern how much federal contractors are paid. The calculation of prevailing wages at which federal contractors must be paid is thirty percent of the local labor force. These regulations must be taken into consideration when deciding an employee’s base pay. There are various pay level strategies to choose from including: lead the market, match the market, lag the market, hybrid, employer of choice, or cafeteria plan. Setting higher wages than competitors helps attract quality applicants in larger quantities. It also increases employee’s work efforts, reduce turnover, and lower monitoring costs. While high wages are beneficial to the employees a business determine if they can afford to pay a higher wage, or if the money could be better used somewhere else within the company.
The government not only places certain limitations on pay they also require employers to provide certain benefits. These required benefits are social security, unemployment insurance, workers’ compensation, unpaid family and medical leave, and health care benefits. The Social Security Act of 1935 provides that if a worker meets certain requirements they will receive retirement benefits that are based off their age and earning history. Over 90% of U.S. employees are covered under this program. The Social Security Act also
Several factors should be considered when determining a fair and equal wage across the labor force. Preservation of the existing labor force, while minimizing the impacts on a business being able to maintain their competiveness is a critical
In the case presented both AFLAC and L.L. Bean had their own distinctive ways of utilizing their products in order to enhance the total compensation for its employees. The factor that has deterred more employees away from their current employer is that of benefit packages, and reward systems. As stated by () “compensation affects a person economically, sociologically, and psychologically. For this reason, mishandling compensation issues is likely to have a strong negative impact on employees and, ultimately, on the firm’s performance” (p.313). Many felt just a bump in pay wasn’t enough to substantiate their hard work or the efforts that the performance efforts provided to their organization. As stated by () “the right total rewards system a blend of monetary and non-monetary
Compensation systems can take on many forms, all of which have positives and negatives related to it. However, certain components are noted to be determinants of solid compensation plans. One agreement of a solid compensation system is the use of incentives. “Clearly a successful companies set objectives that will provide incentives to increase profitability” (Needles & Powers, 2011). Incentive bonuses should be measures that the company finds important to long-term growth. According to Needles & Powers (2011) the most successful companies long term focused on profitability measures. For large for-profit firms, compensation programs should offer stock options. The interweaving between the market value of a company’s stock and company’s performance both motivate and increase compensation to employees As the market value of the stock goes up, the difference between the option price and the market price grows, which increases the amount of compensation” (Needles & Powers, 2011). Conclusively, a compensation plan should serve all stakeholders, be simple, group employees properly, reflect company culture and values, and be flexible (Davis & Hardy, 1999; The Basics of a Compensation Program).
The Davis-Bacon Act was enacted in 1931 as a means to protect construction workers from being underpaid by establishing a prevailing wage (or minimum wage) for publically-funded construction contracts. Construction contracting under the Act includes construction, alteration, or repair of public buildings or works in excess of $2,000 to which the United States is a party or shares financing. The prevailing wage, which includes fringe benefits, is determined by the Secretary of Labor
11. Federal legislation has been enacted to protect workers against wage discrimination (e.g., Equal Pay Act of 1963, Civil Rights Acts of 1964and 1991, and the Age Discrimination in Employment Act of 1967). These laws prohibit paying male employees more than female employees unless the wage difference is justified on the basis of:
carefully planned out and considered, the total closure or failure of the organization could be at hand in the near future. In our modern age, employers know that salary is not the only factor that should be considered and that salary alone will not lead to better or more highly profitable workers alone. This is why compensation planning is important and why pay should have some connection between performance and compensation. This is why the human resources department should consider many monetary and non-monetary factors when considering how to properly compensate and motivate employees (Dessler, 2013).
Purpose: In Weeks 3 and 5, you submitted information to help you in completing the final project. Feedback was provided to assist you in maximizing points earned on this final paper. To properly complete this final project, you must include the feedback provided to apply to this final paper. The purpose of this assignment is to apply your critical thinking skills in completing the employee process from job analysis to compensation based on performance. You are now going to
The challenges of an organization can influence the performance of an organization from a satisfaction with pay (Gomez-Mejia, Balkin, & Cardy, 2016, p. 296). The employee salary within an organization is a huge cause for turnover of employees (p. 296). First, the topic of employee salary is of great importance for the current and potential workforce (Lee & Lin, 2014, p. 1577). In addition, employees that have the perception on receiving lower compensation that others within their market will lack in performance and have a desire to leave the organization (p. 1577). In retrospect, the regular evaluation of compensation within the organization is vital to the reduction of employee turnover (p. 1577).
Over the next four years Bacon introduced thirteen more bills to establish regulation of labor on federal public works projects.[10] Finally, a bill submitted by Bacon and Senator James J. Davis, with the support of the American Federation of Labor,[11] passed in 1931. The law provided that all federal construction contractors with contracts in excess of $5,000 or more must pay their workers the "prevailing wage," which in practice meant the wages of unionized labor.
1. Which Act sets the minimum wage , and what is the current wage rate?
The conflict to make sure your business continues to grow and provide positive revenue while providing a fair wage to your employees begins with the desire to become wealthy. Retaining the majority of the profits while providing minimal wages to your employees typically results in high employment turnover and unhappy employees. On the other hand, if you were to pay your employees more than your revenue allows remaining profitable the business will likely
The reading course material required for this class, and the information reviewed throughout the course are the foundation for the content of this Guide. Each of the five key compensation processes will be reviewed in the context of:
Some organizations are unwilling to show their reward systems and pay policies (Lawler, 1995). Many Human Resources professionals believe gender pay gaps to be resolvable through the monitoring of pay levels and communication (Report on Salary Surveys).Greater pay transparency has been a great benefit to the board, employees and managers as they now know what is happening across the business and they are able to confidently justify their actions (Commission Policy Report).All market-related supplements are recorded and reviewed separately from basic salary to ensure openness and transparency. Regular research market rates within the various labor markets in which they operate is undertaken improving transparency would also help to improve talent development, as employees would be able to see what they could earn if they wanted to move to another division and upgrade their skill set. (Commission Policy Report).
The organization for which I am designing the compensation package is a company that offers internet solution to customers in the domestic US market and the global market. The position that I am hiring is that of a company secretary. The secretary will be required to work in the office of the human resource manager and will handle all the papered and paperless documentation. The position comes with numerous benefits and packages as outlined herein.
Today, competition between the businesses is extremely high thus companies need to find ways to be competitive. Organizations prepare the best market strategy to increase the company performance and the ways to keep their employee motivation on the highest level to perform well within the competition. At that time, several incentive pay programs play an important role for every organization to perform well within the competition.