Compensation and Benifits Strategies Recommendations Wk3 Team A

Topics: Health Insurance Portability and Accountability Act, Health insurance, Strategy Pages: 10 (2233 words) Published: February 14, 2015

Compensation and Benefits Strategies Recommendations
Angela Garrett, Bessie Fuller, Catherine Spivey, Chandell Tyghter, Janell Jernigan HRM/531 Human Capital Management
December 8, 2014
Doreen Lawrence

Compensation and Benefits Strategies Recommendations
In this scenario, Team A has agreed to work with a small business, Landslide Limousine. Bradley Stonefield is our client whom we must develop some compensation and benefit recommendations. Landslide Limousine is a small business with approximately 25 employees that is located in Austin, Texas. First, Team A will conduct a market evaluation by researching what companies in the relevant market are providing to employees from a total compensation perspective. Second, recommend a compensation structure. Third, recommend the position in the market. Fourth, create a total compensation and benefits strategy. Fifth, consider the use of performance incentives and merit pay to recognize and engage employees. Lastly, identify laws related to the benefits and pay program. Market Evaluation

On account of the tight competition in Austin Texas, it will be challenging as a small business owner starting out to be competing with the larger companies in the market. Luckily, Austin’s average pay for a limousine driver is 6% lower in this city than the national average which will be a benefit to Landslide Limousines. Austin has over 400 different competing companies in the area so having an upper hand on the total compensation of its employees will be highly beneficial. When looking at the area of competitors many do not offer health insurance or offer very little coverage to its employees. Between these companies very few allow the drivers to take all of their tips or compensation for these services. Along with these lacks of benefits, problems that could also occur in this market is the high turnover rate due to low wages. By offering these additional benefits that other competitors are not, it allows Landslide Limousines the ability to find the best drivers and retain them. Over time, retaining drivers will save the company a significant amount of money not having to train new employees from constant turnover. In addition, being able to retain those that are experts in their fields, the customer satisfaction for the company will continually bring in new business allow the company to expand to 25 employees in the near future. Recommendation for Compensation Structure

Based on the Bureau of Labor Statistics, the average pay for a limousine driver in Texas is $10.95 a year or $22,770 based on a full time. This standard includes tenured and new drivers. The minimum wage is for Texas is $7.25 or $15,080. After looking at these statistics, it is recommended that you come up with a hiring structure based on experience and duties for the role. Also consider offering a premium pay for peak or late night hours. Keep in mind if it is decided to provide health insurance it is recommended to keep the wage slightly lower than if it were not to be offered. A business needs to keep a financial balance and by offering both a higher wage along with health benefits it could put Landslide Limousines in more than the fifty thousand in debt than expected. Since the company decided to allow drivers to keep ninety percent of their tips, it is recommended that the starting pay for the driver with 5 years’ experience be slightly below the Texas average given all the additional benefits the driver will receive. By giving drivers the ability to have ninety percent of their compensation pay, it gives them a high incentive to work at their best. It also allows the company the ability to track their best/most profitable drivers. Using this data will be significant when offering annual reviews and raises.

Recommendation for Position in Market
 When looking at compensation and benefits one must look at their main competitors. Knowing one's competition gives a view of...

References: Bureau of Labor Statistics. (2013, May). Retrieved from Occupational Employment Statistics:
Cascio, W. F. (2013). Managing Human resources (9th ed.), New York, NY the McGraw-Hill
Companies, Inc.
Experienced Limo Driver Salary in Austin, Tx. (2014, December 6). Retrieved from Indeed:,-TX.html
Health Information Privacy. (n.d). Retrieved from
Laws Affecting Benefits. (2011). Retrieved from
Strategic Plan for Employee Compensation and Benefits. (2014). Retrieved from
Summary of the Major Laws of the Department of Labor. (n.d). Retrieved from
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