7-1 Final Project: Submission OL-211

Final Project Milestone Four OL-211 1

Final Project Milestone Four OL-211 3

Final Project Milestone Four

OL-211

Jennifer Moore

Southern New Hampshire University

Final Project Milestone Four HRM

Employee compensation is an essential aspect of organizational success. Through compensation, employers provide payments to their employees for meeting set targets or completing specific tasks. Different companies have different approaches towards employee compensation because it all depends on the industrial circumstances of the company, financial status, and culture. Maersk has a simple but effective compensation approach which has helped the company to stay competitive and relevant in the business market. It uses the industrial approach when designing its compensation plan (Maersk, 2017). Jobs are clustered in job groups depending on the employees' experience, knowledge and skills, and demands of the workstation. That implies that the workers are paid concerning their job group and job demands.

Maersk's approach to compensation is challenging, especially when it comes to a time when the company needs to increase or reduce individual salaries. In such a case, the company will be forced to perform a performance appraisal, whereby the performance of the individual set to have their salaries increase or reduced will be reviewed within a given time frame. This review is always in line with individual objectives and targets before assuming their duties and job positions. Suppose the individual has not met their set targets and objectives. In that case, the company might opt to decrease their salaries due to underperformance or stop salary increment in case it was set to increase salaries.

Salary surveys are essential in organizations. These are processes whereby a company undertakes research within its industry or across regions to determine the salary ranges paid by other employers in the same industry and region. Companies tend to project how much to pay their employees because salary surveys provide them with the knowledge on the minimum and maximum amount they can pay their employees in a specific locality (Groysberg, 2013). Therefore, it should be noted that salary surveys are valuable to organizations. Notably, successful organizations offer fair salaries to their employees because of salary surveys. Besides helping organizations have a clue of the maximum and minimum salaries to offer their employees, salary surveys also help organizations set a salary target that is attractive and fosters employee retention. If a company offers a slightly higher salary than their competitors, workers will more likely get attracted to the organization because of better pays. More so, there will be fewer turnovers because no one would want to leave a better-paying company and join a less-paying company if all factors are held constant.

Discretionary benefits are whereby an organization benefits from empowering its employees. Maersk provides health benefits to its employees. This ensures that the employees are always at their optimum health state to stay productive in the company. The health benefits have also significantly reduced cases on payable health leaves within the company; hence, helping the company managers to ensure productivity is sustained (Maersk, 2017). More so, Maersk offers education reimbursements to its employees to ensure that they are always improving on their skills and knowledge to perform their tasks. That is how the company has maintained a team of experienced and talented employees. Moreover, Maersk has continually offered its employees additional privileges to ensure that the employees feel a sense of belonging. This has also improved employees’ trust levels and reduced turnovers in the organization.

References

Groysberg, B, S.L., (2013). A.P. Moller-Maersk Group: Evaluating Strategic Talent Management Initiatives. Boston: Havard Business School Publishing.

Maersk. (2017). Incentives Pay Guidelines. Retrieved from: https://investor.maersk.com/guidelines.cfx