Strategic Compensation

A strategic compensation plan is necessary for any company to attract good employees. At Plastec, this can happen by examining the competition and making use of variable pay and benefits. Employees will want to work at and stay with Plastec if they feel valued. Plastec can make this happen with the right amount of planning.

When most people think of compensation the thing that comes to mind is pay rather than the form of wages or a salary. Compensation includes any benefits that a company may offer in addition to monetary funds and is often referred to as total compensation (Mathis and Jackson, p. 426). In order for Paul to determine how Plastec compares with other employers in the area in terms of wages and benefits he must first choose companies that have similar positions as Plastec with similar job descriptions. He should research these companies to determine what types of benefits they offer including base pay or salary and incentives and review comments left by present or former employees. Sites such as Glassdoor would be beneficial to Paul’s comparison and research.

Another area for Paul to examine is time off benefits. Other than government mandated benefits, Paul should specifically examine the areas in which Plastec falls short compared to other companies in the area. In addition to this, Paul must consider the size of the organizations and number of employees these organizations have. As we previously discovered, many of the employees that were terminated or were looking to terminate their employment with Plastec were doing so due to opportunities to make more money or have better health benefits at other companies. In order to effectively compete to retain employees, Plastec must provide different levels of base and variable pay and benefits.

Acme is Plastec’s biggest competition; so it is important for them to provide similar if not better pay and benefits. Perhaps, the solution would even be to offer things that Acme may not offer such as...