Plastec Compensation Benefits

Plastec is a company that can be considered a small business, with only one location. Their success have been varied, with it experiencing layoffs and now experiencing a “growth spurt”. The company employs semi skilled workers on an assembly line whose mean age is about 40. Some of the employees have families while others are single. One of the most significant complaints of the workers is the lack of competitive benefits that the company offers. To create a strategic compensation plan for machine operators at Plastec Company Paul must do an internal analysis of the company’s current strategic compensation. Paul has to determine if current compensation plans reflect the organization strategic goals. If a high production rate is a goal, then a there should be compensation for exceeding production rates. If quality is a goal, then compensation should be given for staying under a certain percentage of errors. Paul then needs to determine how competitive the organization’s compensation plan is compared to similar organizations within the driving range of the company’s employees. Paul should compare what level of pay: base, benefits, incentives, and perquisites, should be offered relative to competitors? What mix of base pay, flexible benefits, stock options, cash bonuses, stock appreciation rights, etc. should be offered? What should the proportion of guaranteed compensation (base, benefits) relative to riskier returns (incentives) be (Milkovich & Broderick 1989, p4)? Analyzing these factors should help Paul to develop a strategic compensation plan that facilitates meeting Plasetec’s organizational goals and attracting quality employees.

Beyond analysis of factual company comparison, Paul also needs to take into account employee perceptions of Plasetec’s strategic compensation compared to competing companies. Paul may find that employee’s perceptions may be true, false, or misled. In addition, Paul needs to determine if what the company is offering for...