May 18, 2010
It is important for companies to develop a compensation plan for their employees. A compensation plan includes a pay system, health and retirement benefits, work-life balance, and recognition. Compensation should be linked directly to an organization’s strategic plan and mission. With the recent merger and new corporate strategy, it is important to review and update InterClean’s compensation plan. InterClean’s New Compensation Plan
Trends in employee compensation are constantly evolving. The New World of employee benefits includes health insurance, employee health and prevention, retirement programs and the 401(k) concept (Cascio Ch12). The compensation plan for InterClean’s new sales team will include a base salary structure, as well as, incentive-based pay and merit increases. It will also include health benefits, recognition and flexible schedules to promote work-life balance. Performance appraisals will be conducted on an annual basis to provide employees with recognition and opportunities for improvement. These will all provide managers with the necessary information for merit raises. Other recognition opportunities will be developed and available throughout the year. These will be used by management or peers to recognize employees for their efforts or contributions to a task or project. Pay System
There are two main systems for employee pay: base salary, and incentive-based pay. Base salaries are most often used throughout companies, and consist of fixed salary ranges for each position. Incentive-based pay structures are often used for employees in sales. There are both advantages and disadvantages to incentive-based pay structures. An incentive-based pay system can directly affect sales because the employee’s income is directly related to their performance. Employees will be more motivated to complete sales. One disadvantage to an...
References: Cascio, Wayne F. Managing Human Resources, Chapter 11: Pay and Incentive Systems. The McGraw-Hill Companies, 2005.
Cascio, Wayne F. Managing Human Resources, Chapter 12: Indirect Compensation. The McGraw-Hill Companies, 2005.
Obringer, Lee Ann. "How Employee Compensation Works." January 2003. HowStuffWorks.com: http://money.howstuffworks.com/benefits.htm. May 16, 2010.
“What is Total Rewards.” WorldatWork The Total Rewards Association, 2006. http://www.worldatwork.org/waw/aboutus/html/aboutus-whatis.html. May 16, 2010.
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