Question

4

Benefits and Compensation Package: Revisions

Deyanira Diaz

OL 620

Southern New Hampshire University

May 8, 2022

Concerns Identified

Emerging Pharmaceuticals is a pharmaceuticals manufacture in the United States that operates globally. The issue of concern for the company is that it is losing its employees to one of its competitors Medtronic. “Turnover of new hires with less than 2 years of employment at Emerging Pharmaceuticals is 25%” (SHNU, 2018). This implies that new hires in the company are not motivated to work with EP. Therefore, the vice president of human resources believes the new hires are moving to Medtronic because their compensation package may be better than that of EP. The management thinks that it is essential to compare the health, wealth and work/life offerings of the two entities and from there develop a total rewards and compensation strategy that will help retain its talent, meet the needs of all its employees for years to come, and help control costs.

The study conducted indicated that 37% of employees between 31 and 50 years are mostly concerned with the healthcare plans, their 401(k) plan, advancement opportunities, and long working hours. This was also the response from other participants. This implies that the problem in EP’s compensation package lies in professional development, flexibility at work, and healthcare coverage. Others proposed a work-life balance and being allowed to work remotely.

Recommendations

First, ‘s new rewards and compensation strategy has to focus on the employees of between 31 to 50 years because they make 60% of its workforce. The compensation and reward strategy as to align with the goals and objectives of the company. EP must make changes to its healthcare plans, the 401(k) plan, and ensure professional development opportunities of its employees through training and education. Therefore, I would recommend

· Employees to work remotely since there is growth in digital technology and they can hold meetings online.

· Tuition reimbursement and professional development opportunities for all employees– train employees on management roles and to add to their knowledge and skills.

· Pay time off – employees are moving to the competitor’s side because it pays time off

· Make salaries competitive. This will ensure employees are motivated to do their best to get higher pay. Reward performing employees and encourage others to do well.

· Diversified healthcare plans

· Variable pay options – reward employees when they perform well in certain projects.

Potential financial, procedural, and legal constraints regarding the revised total rewards package

EP has a total of 15,000 employees performing different duties for the company. All the changes recommended above involve finances and widening the budget to meet the changes may compromise the operating budget of the company. The company may incur extra financial costs that may affect its operations, hence making it difficult to make the changes. Legally, The Fair Labor Standards Act (FLSA) calls for companies to exercise equality in their rewards and compensation packages. Therefore, this will make it difficult to implement changes such as variable pay and competitive salary options.

The Financial Cost of Proposed Changes

With 15,000 employees, the proposed changes will increase the financial costs of EP by over 50%. EP needs to match the compensation strategy of Medtronic or makes its strategy even better. However, EP can reduce these costs by allowing employees to work remotely. According to wright (2015), a higher percentage of employees are ready to accept a pay-cut of 10% if the company allows them to work remotely. To meet Medtronic’s plan by 100%, EP must increase its tuition reimbursement benefits of undergraduate degree to $3000 and graduate degree to $5,250. Other high financial costs of over 50% will be incurred from paid time off because all the employees will be rewarded.

References

Medtronic Benefits Information. For use in OL 620 comparison with the supplied case study data

Retrieved from http://benefits.medtronic.com/SitePages/ChannelContentR2.aspx?ChnIDval=3&GrpIDval=16&IDval=21

SNHU. (2018, July 17). Emerging Pharmaceuticals and Medtronic. Draft Case for OL 620, Emerging Pharmaceuticals and Medtronic.

Wright, A. (2015). Study: Teleworkers More Productive—Even When Sick. Recuperado el, 29, 04-20.