Employee Compensation and Benefits Abstract

EmployeeCompensation and Benefits

Abstract

Employeecompensation and benefits is one of the most complex undertaking inany organization. A well-structured plan should be fair to all theemployees as well as the institution. As such, many organizationsconstruct the plan based on the working hours, level of experience,educational background, and geographical location. Additionalincentives are also based on the above factors. Therefore, this paperelucidates on the various elements to be considered whileconstructing an effective compensation and benefits plan. Theexternal factors include budget allocation, organizational structure,working hours and experience, and the productivity as well as skillslevel. From this elements, there are a few which are important andless vital.

EmployeeCompensation and Benefits

Thehuman resource department is tasked with addressing various needs ofemployees. One of its well-known tasks is hiring and designing acompensation and benefits plan. The practice is quite intricate sinceit involves several factors. In that regard, creating a packagerequires one to be cautious so as to achieve the right balance. Anemployee must not be underpaid or overpaid. Many structures considerthe type of work, working hours, educational background, experiencein the particular occupation and geographical location among others.This paper will expound on both the internal and external factorsneeded to develop and plan employee benefits. It will also entail themost important to the planning process as well as the leastsignificant.

Internaland External Information to Consider

BudgetAllocation

Itis one of the most vital elements when constructing an employeecompensation and benefits plan. Some posts are demand-sensitive likewarehousing, shipping, and customer service. Cash is required to fillsuch positions. However, some posts generate less revenue, yet theyneed sufficient money to hold [ CITATION Hav12 l 1033 ].It is, therefore, important to stretch the budget and provide a smallbase pay. Voluntary benefits are then added. For instance, what isthe total compensation budget will be utilized for salaries and theamounts spent on benefits as well as other incentives. In otherwords, it is vital to consider how the allocation system will bestructured. If 90 percent is spent on salaries, then 10 percent ofbenefits. How is the 10 percent reimbursed? Another perspective ofbudget allocation entails the company’s income.An organization ought to pay the employees according to the revenuesthey make. For instance, corporations set aside a particular amountof cash to cater for salaries and benefits [CITATION Lle12 l 1033 ].

OrganizationalStructure

Developinga comprehensive organization chart is important when structuring theemployee compensation and benefits plan. This is because, for one tomaximize the efficiency of the human resource functions, it isparamount to establish the optimal staffing needs. Therefore, anorganization chart with all the rankings and posts are created andtasks alienated appropriately [CITATION Placeholder16 l 1033 ].A job description is then derived from aligning each task to therespectivepost. A job description is an essential element while designing thesalary structure. A good example can be drawn from a secretary’swage structure. He/she is mostly working with chancellors,vice-chancellors, and other communities that run the institution.Therefore, they have to be highly qualified to partake these dutieseffectively. Since they attend council meetings, they ought to behighly knowledgeable to advise them when the need arises. Secretariesare not just passive members of a committee where they only recordthe events [CITATION Jen151 l 1033 ].Instead, they are active contributors who help out in decisionmaking. Therefore, the structure must consider the tasks allocatedto each profession.

WorkingHours and Experience

Theaverage working hours are eight in a day. As such, the salary scaleis structured in line with the number of hours earned on a dailybasis. Extra hours are also compensated accordingly [ CITATION Sam16 l 1033 ].All organizations consider the number of hours worked. In someinstances, absenteeism is also punished depending on the number oftimesskipped. An excellent compensation plan must be considerate of bothnegative and positive aspects of working hours [CITATION Cor14 l 1033 ].

Experienceis another factor used by companies to construct a worker’s benefitchart. In that regard, the number of years one stays in theorganization are vital in structuring the program. Apart from that,the educational background plays a significant role in the salarystructure. A typical example of how expertise in respective fields isused to make the structure is elaborated below.

0– 5 years – entry level – range of $24,996 to $40,008 /year

6– 11 years – mid-career level – range of $27,000 to$57,996/year

12years and above – experienced level – range of $45,000 to$67,008/year [ CITATION Adm16 l 1033 ].

Productivityand Skills Level

Apositively focused compensation plan motivates the workers to performtheir tasks diligently. A good example can be drawn from Starbucks.The company lets the employees own shares and treat them as partners[ CITATION Str13 l 1033 ].Therefore, they share the company’s profits. In that regard, theywork harder so as to ensure the company obtains significant profitswhich they share as partners. Employee productivity and level ofskills is a prominent tool in many organization’s compensationplans [CITATION Sta15 l 1033 ].

Atypical example of how the educational background is used to make asalary structure can be illustrated from the secretary’s salaryscale.

Degreeonly – normal salary as per the levels of experience – 9.6%

Degree+ a professional course especially secretariat

TheMost Important Information

Theorganizational structure, as well as budgetary information, goeshand-in-hand as the most crucial elements. The structure defines theroles of each personnel and the tasks allocated. It also has all thedockets within the corporation, whether filled or empty. Therefore,it is a mandatory requirement that organizations cannot survivewithout them. The salaries are also given according to the companyearnings. In other words, it is unlikely that a company would paymore than they earn.

LeastImportant Consideration

Ageand sex should be the least significant factors to consider whileconstructing the compensation and benefits plan. In the contemporaryglobe, calls for gender equality have risen with many corporationsapplying gender sensitive measures even in the payment plans.However, some places still suffer from gender stereotypes that regardsome tasks as feminine or meant for men. For example, secretarialjobs are predominantly considered as feminine jobs, hence have acertain salary structure to suit them. Such issues can be avoided byembracing a comprehensive approach when structuring the compensationplan [CITATION Placeholder17 l 1033 ].

Generaloutlook of a compensation plan based on a secretary’s salarystructure

Entry level secretary

Working hours (8)

$12.5 per hour

Qualifications

9.6 % of the monthly salary as per normal working hours

Over time

$15 per hour

Bonuses as per performance

$21 per month

Medium level secretary

Working hours (8)

$13.5 per hour

Qualifications

9.6 % of the monthly salary as per normal working hours

Over time

$17 per hour

Bonuses as per performance

$21 per month

Experienced secretary

Working hours (8)

$21.3 per hour

Qualifications

9.6 % of the monthly salary as per normal working hours

Over time

$20 per hour

Bonuses as per performance

$21 per month

References

Ashe-Edmunds, S. (2016). Internal Factors to Consider in Human Resource Planning. Retrieved from http://smallbusiness.chron.com/internal-factors-consider-human-resource-planning-60960.html

Geereddy, N. (2013). Strategic Analysis of Starbucks Corporation. 1-17.

Gregory, H. (2014, December 12). Corporate governance issues. Retrieved from http://corpgov.law.harvard.edu/2014/12/12/corporate-governance-issues-for-2015/

Havard University. (2012). GSD Faculty Handbook. Graduate school of Design.

Jensen, A. (2015, November 14). Holding Employees Accountable for Performance. Retrieved from http://www.andrewjensen.net/holding-employees-accountable-for-performance/

Llewellyn, D. (2012). The Role and Influence of the Secretary in UK Higher Education Governing Bodies. Leadership Foundation for Higher Education.

Meyer, P. (2015, September 13). Starbuck`s Coffee Company Organizational Structure. Retrieved from http://panmore.com/starbucks-coffee-company-organizational-structure

Miller, M. S. (2012). A Guide for New Clerks and Secretaries of Governing Bodies of Higher Education Institutions in the UK.

PayScale. (2016). Administrative Secretary in New York Salary. Retrieved from http://www.payscale.com/research/US/Job=Administrative_Secretary/Salary/1e2bd512/New-York-NY

Rujitha. (2012). Challenges to corporate governance: Issues and concerns. 1-6.