Compensation Strategy

ABSTRACT

Compensation and Benefits

Plastec has had several issues associated with retention. Some of these issues as reported by those deciding to leave the organization deals with pay and benefits (health insurance/vacation time) being less than that offered elsewhere (Acme) in the industry. When trying to determine how Plastec compares with other area employers in terms of wages and benefits, it is important that Paul and Plastec’s operating managers find a balance between appropriately rewarding employees sufficiently for their knowledge, skills, and abilities (KSA) all while taking into consideration organizational costs such as expenses and revenue (Mathis, 2011). The following actions and/or recommendations should be considered by Paul and organizational managers in order to determine how Plastec compares with its competitors in the industry in terms of wages and benefits.

Considering some of the employee’s accusations and utilizing current or available metrics regarding pay and benefits, it will be essential that Paul and the organization’s managers start off by internally evaluating the health of the organization in order to understand how the rate of changes in the organization overall may be affected by changes in the rate of compensation (Compensation Metrics). Based upon this information along with external factors as it relates to wages and benefits in the industry, Paul and the managers can assess and develop base pay programs, salary structures and policies in order to advantageously position themselves in the market (Quartile Strategies).

After establishing base pay programs (pay grades/ranges), structures and policies based upon assessing job positions, KSA, and complexity, it will be incumbent upon Paul and others through the use of job evaluations, market pricing, and pay surveys to compare data with benchmarks in the industry, in order to develop effective, efficient and competitive strategies regarding their compensation and benefit...