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Benefits and Compensation

By Nikkidailey2 Jul 12, 2013 1343 Words
Introduction
Competitive wage and benefits packages can be an important attraction to recruits, new hires and even current employees of any organization. From the time a person begins their hunt for a new career or job position they think of the wage they need in order to fulfill their daily obligations and how the benefits a company may offer can help balance their lives outside and inside the organization. There are so many differing lifestyles and family types that organizations need to be open in their planning and need to ensure equality when creating benefits packages and pay structures. “The organization with effective compensation and benefits drives its personnel costs, manages the performance of employees and rewards the extraordinary performance” (HR Management Guide, 2011). Benefits and Compensation

Equal Pay Act (1963) and Minimum Wage
In 1963, the Equal Pay Act was established in order to assist in the elimination of wage gaps between minority groups, such as women and those of differing ethnic backgrounds. It provides that where workers perform equal work in jobs requiring "equal skill, effort, and responsibility and performed under similar working conditions," they should be provided equal pay (US Legal, 2012). Despite the efforts of many and the Equal Pay Act discrepancies still exist in the workplace when comparing women to their male counterparts. The importance of ensuring equality through human resource administration can be beneficial to both the company and employer, as well as safeguard the organization from any legal proceedings that might occur from such disparate treatment. * Minimum wage, which is governed by the U.S. Department of Labor, was established in order to protect employees and workers from being gouged by employers. It is used as a basis to ensure employees are paid a reasonable wage to avoid poverty and to establish a minimum standard of living for all wage earners. (Fitzpatrick, 2009) In 2007 the Minimum Wage Act was written to include phased increases to the federal minimum wage. This allowed for increases from it starting point in July 2007 at $5.15 to $7.25. Many states have their own minimum wage laws which are upheld as long as the employee is entitled to the higher of the two minimum wages. Incentive Pay

Incentive compensation refers to a host of variable pay schemes designed to tie pay to performance and thereby achieve gains in worker productivity. Incentive pay can be paid on any time schedule as decided by management and employees involved in the program. Incentive compensations can consist of pay in the form of: merit pay, bonuses, profit sharing, gain sharing stock options and commissions.

Incentive pay can be used on targeted individuals, executive, managers or work groups such as sales staff. When in the recruitment and hiring process incentive pay structures can be useful in attracting and maintaining individuals or groups of qualified applicants or employees with critical knowledge, skills, ability and other characteristics (KSAOs) needed to perform the job effectively and efficiently. Benefits

The rapid growth of benefits is ever changing to remain effective for employees and organizations. There are two main requirements a benefits should meet in order to qualify within an organization: there must be employee interest and it must remain cost effective for the employer in order to qualify as part of a benefit package. Plan administrators and benefits managers roles need to expand in order to maintain control of each benefit, its costs and its administration.

Numerous benefits are available depending upon the business and cost of each benefit to the employee and employer alike. Health, dental and vision are the main basis for benefits that should be afforded by organizations on behalf of their employees, even if a fair percentage is to be paid by the employee, pre-tax. Aligning benefits with other packages offered in the marketplace can be beneficial in recruitment and can help provide high morale among employees, current and future. Assurance of mandatory benefits can also be crucial, so employees are aware that they are being covered under workers compensation, unemployment insurance and that social security is being paid on their behalf. * Optional benefits programs can help entice the type of employees that an organization is looking for. The wants and needs of such benefits may differ depending upon age, social status, family and other factors not related to their position within the organization. Take for instance a new parent seeking out a daycare facility for their youngster: an assistance program for searching, dependent care accounts or even on-site daycares might be attractive benefits. Dependent care, child care and elder care can give piece of mind to caregivers of small children or elderly parents. For a single, career-minded male pension plans, 401K, or education reimbursement might be his top choices for benefits. Vacation and paid time off are a benefit that most employees seek when job hunting. Whether they are looking to go to Jamaica, spend quality time at home with kids or just need to refresh their minds time off is a crucial benefit that works for most employees. This can also tie in with holiday pay and sick pay. Flexible schedules can be assistive in the same manner, thus allowing employees a better sense of life/work balance and allowing them a bit of freedom to attend important events or to care for family members. Work-life balance can be assistive in creating loyalty and increased production amongst workers. Allowing them freedom to attend to personal matters can be helpful in relieving stressors that can negatively affect employees and their work ethics.

There are many other unique programs some organizations have created or have used in order to attract or maintain the most successful of employees. Take Google for instance, 25 all gratis cafes company-wide, the Google Plex containing bocce ball, a bowling alley, and the availability of eye brow shaping for a minimal fee. In order to recruit the best of the best Google has gone “way beyond basic” (Emerson, 2012). As executive chairman Eric Schmidt wrote in an explanation of Google's benefits, "The goal is to strip away everything that gets in our employees' way [...] Let's face it: programmers want to program, they don't want to do their laundry. So we make it easy for them to do both." (Emerson, 2012)

Companies such as Google work in effort to assist employees who are beneficial to the company’s survival and growth. Offering benefits such as laundry service, adoption assistance, paid maternity/paternity leaves can offer employees ease of mind and one less stressor in their daily life. This allows the employee to focus on their top priorities with open minds and clear of any distractions. Conclusion

From corporate standpoints in many companies the bottom line is what is seen in the end. The expertise from human resource administrators help them visualize what wages and benefits can help them accomplish and how they can affect the bottom line positively. Less turnover, higher productivity and loyalty from employees begins with their wages and benefits. If you can create the perfect scenario for the employee it makes the position irresistible to the best of the best. Wages and benefits may not be the only factors in securing and maintaining a great staff, but they are high on the list of important features for current and future employees.

References
Emerson, R, (2012). Google’s best benefits: the 7 top perks Google offers employees. The Huffington Post. Retrieved June 18, 2012 from http://www.huffingtonpost.com/2012/01/30/google-benefits-employee-perks_n_1242707.html Fitzpatrick, L. (2009). The minimum wage. Time Magazine U.S. Retrieved May 23, 2012, from

http://www.time.com/time/magazine/article/0,9171,1912408,00.html Heneman, H.G. III, Judge, T.A. & Kammeyer- Mueller, J.D. (2012) Staffing Organizations (7th
Ed.). New York: McGraw-Hill.
HR Management Guide (2011). Compensation and benefits. Retrieved June 18, 2012 from
http://www.simplehrguide.com/compensation-and-benefits.html USLEGAL.COM. (2012). Discrimination Law & Legal Definition. Retrieved May 22, 2012, from http://definitions.uslegal.com/d/discrimination/

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