Compensation and Benefits Strategies Recommendations
Compensation and Benefits – Landslide Limousines
As a team of consultants at Atwood Allen and consulting, we have received a request to develop a compensation and benefits plan to support Bradley Stonefield as he opens up his limousine business in Austin, Texas. In Bradley’s initial request, he requested that his package be similar/comparable to other limousine company’s in the area. Mr. Stonefield still maintains that he will hire twenty-five employees, and projects a first year annual revenue of negative $50,000. Another important note is Mr. Stonefield projects a 5% increase in revenue each year over the next few years. In order to come up with an effective strategy, Team A will have to look at how Landslide Limousines can disrupt the marketplace, repair and maintain the vehicles, and find a cost competitive price for their service. Throughout this paper, Team A will recommend a compensation and benefits strategy for Landslide Limousines, in addition to exploring strategies to obtain top driving talent so Bradley can get off to a good start when Landslide Limousines opens for business. Market Evaluation
Mr. Stonefield will face heavy competition from other limousine companies in the area looking to hire experienced and qualified drivers in the city of Austin, TX. A limousine company doesn’t offer the highest of wags, so high turnover could be an issue for Bradley as he starts up his company. According to the Bureau of Labor Statistics, the median income for a limousine driver in the state of Texas is $25,690.00 (Taxi Drivers and Chauffeurs). With that being said, it will be important for Bradley to find a way to match or beat the salaries offered by his competitors. In addition, Landslide Limousines must take into account the unemployment rate in the state of Texas. As of May 2015, the unemployment rate in Austin, TX specifically is 3.5% with a job growth of 2.2% (Economy of Austin, TX,). In addition, future job growth over the next 10 years is expected to be over 42% (Economy of Austin, TX). These numbers portray an image of a competitive business market, but with a city like Austin, TX with nightlife being a plus and surrounding cities being popular with various sports teams, Mr. Stonefield should find himself a good opportunity to promote his business from the start. With help from our recommendations, Landslide Limousines will need to put together a competitive benefits package and a plan to hire at or above the average median salary for other local limousine drivers. Compensation Structure for Landslide Limousines
Landslide Limousines must implement a compensation structure that is fair and similar so to speak to other limousine company competition in the surrounding area of Austin, TX. According to Cascio (2013), four things are needed when developing a compensation structure: Updated job descriptions, a job evaluation method (one that will rank jobs in terms of the overall worth to the organization, pay surveys, and a pay structure (Cascio, 2013). According to Cascio (2013), this is referred to as a Traditional job-based compensation model. By implementing these four steps, it will allow for increased pay over time, based on merit, inflation, or experience (Cascio, 2013).
Performance incentives will also be of big importance at Landslide Limousines. It plays a big role in being able to attract and keep good employees. All incentive systems depend on performance standards (Cascio, 2013). As Mr. Stonefield plans to hire twenty-five employees, it will be important to incorporate a performance plan that aligns with his company’s strategic goals and objectives, good targets to shoot for, and make it easier for management to assign work equitably (Cascio, 2013). As Landslide Limousines will be a new start-up company in the area, it would be wise to look at a merit pay increase after the first year depending on revenue...
References: Taxi Drivers and Chauffeurs. (n.d.). Retrieved from http://www.bls.gov/oes/current/oes533041.htm
Economy in Austin, Texas. (n.d.). Retrieved from http://www.bestplaces.net/economy/city/texas/austin
Cascio, W. F. (2013). Managing Human Resources (9th ed.). New York, NY: The McGraw- Hill Companies
Cascio 9ed, 9th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781121903814/page/451
Cascio 9ed, 9th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781121903814/page/494
Fair Labors Standards Act (2013) In Encyclopedia Britannica Retrieved from http://www.britannica.com
Texas Administrative Code (2007) Retrieved from http://info.sos.state.tx.us/pls/pub/readtac.
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