Compensation and Benefits Strategies

Topics: Employment, Salary, Fair Labor Standards Act Pages: 9 (1642 words) Published: May 27, 2014


Compensation and Benefits Strategies Recommendations
HRM-531
December 16, 2013
Karin M.L. Wagner
Compensation and Benefits Strategies Recommendations
A strategic plan for employee compensation determines how much you want to pay employees and what type of employees you want to attract. Your compensation plan entails a variety of aspects including pay scales, reward programs, benefits packages and company perks. A successful strategic compensation plan allows your business to compete in the market for the best employees in your industry (Lister, 2013). In order for this medium sized construction business to structure itself and be market competitive then research around benefits, compensation, merits, and the laws related to benefits and pay programs needs to be conducted. The success of the business will rely on the research put into it. Construction Market Evaluation

When looking at the relevant labor markets the task was difficult due to the slowing and sluggish construction economy from 2007 to 2012. Demand in this industry depends heavily on the health of the economy. A midsize company’s profitability and efficient operations require the skills of experienced employees you will be able to work efficiently with available resources because they will not have the advantage of larger commercial construction companies with multiple projects simultaneously in various types of construction. The company’s annual net revenue is $10,000,000 and will need to use their resources wisely to attract and retain talent in the present market and in future expanded markets. When researching labor markets according to (Cascio, 2013), “This can often be a complex task because employers must pay attention not only to labor markets but also to product markets (e.g., level of demand and degree of competition). Pay practices must be designed not only to attract and retain employees but also to ensure that labor costs (as part of the overall costs of production) do not become excessive in relation to those of competing employers.” The job surveyed for this market evaluation was Corporate Construction Manager on a national level for companies with 800 to 3,000 employees. The present workforce in this midsized business is 650 employees and they are looking to add over an additional 20% to the current workforce or an additional 130 employees.

The company wants to be comparable to other commercial construction businesses as they expand in Arizona while being conscious of the compensation used currently in Detroit, Michigan. The median annual income for a Corporate Construction Manager in Detroit, Michigan is $104,626.00. The core compensation package is based on averages, not personal factors and will be different from those in Arizona. Here is the breakdown of the benefit package for a Corporate Construction Manager in Detroit; Core Compensation

Median
% of Total
Base Salary
$104,626
69.4%

Bonuses
$5,607
3.7%

Value of Benefits
Social Security
$8,433
5.6%

401K/403B
$4,189
2.8%

Disability
$772
0.5%

Healthcare
$6,507
4.3%

Pension
$7,055
4.7%

Time Off
$13,567
9.0%

Total Compensation
$150,755
100%

Expanding into Arizona, the median annual income for a Corporate Construction Manager is above average at $120,601. Here is a breakdown of what makes up the compensation benefits in Arizona; Core Compensation

Median
% of Total
Base Salary
$120,601
65.9%

Bonuses
$15,405
8.4%

Value of Benefits
Social Security
$9,021
4.9%

401K/403B
$5,168
2.8%

Disability
$952
0.5%

Healthcare
$6,507
3.6%

Pension
$8,704
4.8%

Time Off
$16,739
9.1%

Total Compensation
$183,099
100%

The level of knowledge and skill requires 10-15 years of experience in the industry with a bachelor level degree. According to (Duchon, 2007), “ When construction is booming in a region, and strong able-bodied workers are in short supply, hourly wages can escalate to...

References: Arizona New Hire Reporting Center. (2009-2013). New Hire Reporting Law. Retrieved 12 07, 2013, from Arizona New Hire Reporting Center: https://az-newhire.com/law
Arizona Senate Research Staf
Bureau of Labor Statistics. (2013, December). http://www.bls.gov/oes/current/oes119021.htm#st. Retrieved from www.bls.gov.
Cascio, W. (2013). Managing Human Resources; Productivity,Quality of Work Life, Profits. New York:McGraw-Hill.
Deloitte Consulting LLP. (2012). Salary structure policies and procedures. Retrieved from
http://www.worldatwork.org/waw/adimLink?id=65885
Duchon, M. (2007, June 1). Compensation; Total Reward Plans that Attrack, Retain, and Motivate.Construction Business Owner .
Henderson, R. (2012, January). Employment outlook:2010-2020 -Industry employment and output projections to 2020. Monthly Labor Review , p.65-83.
HRHELP. (2011). HR & employment Law Compliance Guide for Arizona Employers. HRHELP.
Lister, J. (2013). Strategic Plan for Employee Compensation and Benefits. Retrieved from http://smallbusiness.chron.com/strategic-plan-employee-compensation-benefits- 15613.html
National Right to Work Legal Defense and Education Foundation, Inc
Saari, L. M., & Judge, T. A. (2004, Winter). Employee Attitudes and Job Satisfaction. Human Resource Management , pp. 395-407.
Salary.com. (2013, December 14). http://swz.salary.com/SalaryWizard/Construction- Management- Director-Salary-Details-Phoenix AZ.aspx?&fromevent=swz.comparejobs.freepop. Retrieved from www.salary.com.
U.S. Department of Labor. (n.d.). Wages. Retrieved December 13, 2013, from U.S. Separtment of Labor: http://www.dol.gov/dol/topic/wages/govtcontracts.htm
WageWatch.com
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