BUS434: Compensation & Benefits Management (BWO1312A
HOLLAND ENTERPRISES: COMPENSATION & BENEFITS
With the changing economy it is important that Holland Enterprises improves their benefits and compensation plans for their employees. Holland Enterprises employs 3,500 employees, but since 2007 has lost 25% of its staff. Exit interviews indicate the primary reason a majority of these employees have resigned is because of a compensation and benefit system that is perceived to be unfair and uncompetitive in the marketplace. The reason why an analysis must be done is to attract and to retain employees. This paper will include the current status of Holland Enterprises benefit programs that will include compensation and benefit philosophy, pay structure architecture (pay grades, pay ranges, and pay width), ratio of base pay to incentive (bonus) pay, emphases on external equity or internal equity, principle type of benefits, and how effective compensation and benefit system contributes to organizational effectiveness. As stated before Holland Enterprises currently employs 3,500 employees, however, since 2007 the company has lost 25% of their staff. When employees decided to leave, they all went through exit interviews. When the exit interviews were done, the company was able to figure out way employees were leaving. The main reason why employees were leaving Holland Enterprises was because the compensation and benefit system was perceived to be unfair and uncompetitive in the marketplace. So when it comes down to attracting new employees Holland Enterprises must evaluate and change the compensation and benefits packages accordingly because in today’s economy organizations are becoming more competitive with each other, Which means the compensation and benefits packages are becoming a huge factor. When employees feel as though the benefit and compensation system is to be unjust and uncompetitive, then employees will just look for work elsewhere, just like the employees have done at Holland Enterprises. Compensation and benefit system contributes to organizational effectiveness. However, the systems are progressively becoming expensive and compound, even for smaller organizations. Organizations should cautiously reflect both the organizations financial requirements and the needs of the employees when planning and implementing the compensation and benefit systems. Typically, organizations benefits may include the following: paid time off, medical insurance, dental insurance, retirement plans, disability, vision plans, and sick days. Compensation packages may include motivation tools such as bonuses, incentive systems, and profit sharing (Henderson, 2006). However, several employees may agree to lower compensation packages for the sake of better benefits, while other employees will agree to higher compensation packages for the chance to choose the best benefits that suit their own needs. In some circumstance, several employees are more concerned with benefits than they are with their wages due to things like family needs or the employee is at a different point in their life like thinking about retirement. Just like Holland Enterprises, for some business owners their compensation and benefit systems may be the reason that a person may or may not accept the position. In order to stay competitive with other companies and attract higher qualified applicants, organizations must offer a benefit system that cannot be ignored. Having a compensation package that cannot be ignored is an important part of the planning process, especially if the organization wants to keep the remaining employees as will has recruit and keep new employees. The pay range will have a smallest and a highest pay depending on knowledge and capabilities. However, bonuses would exceed the employees pay and would be constructed on accomplishments.
Incentives would be received by all employees....