Power Point Presenation

profilernwchondafwrsythe
CompensationPlanPart3.docx

Running head: pay for performance and employee benefits. 1

pay for performance and employee benefits. 7

Rischonda Forsythe Baker College April 25, 2021

Performance Management and Pay for Performance

In this part of the compensation plan project, I will look into recommendations for individual pay with regard to employee benefits plan and scope of pay for performance. The company will link performance management and pay for performance through a several ways. Pay for performance relies revolves around the idea that an employee should be rewarded for a job well done. Whereas performance management enables the setting of goals in an organization. Employers look out for many behaviors that may termed as important. For instance, attracting new employees into the company, retaining them as soon as they join, developing their skills for their jobs in the future or present and most importantly how an employee performs while working in the organization (Newman, 2017). To begin with the company can use performance-based guideline in order to ensure fairness and equity in the jobs they are currently doing. If an individual has the same job description the same guideline will be used and depending on how they are performing the pay will increase if it is deserved (Newman, 2017). The process will ensure that the use of performance appraisals is equal and at the same time fair. This will therefore give each employee an equal opportunity to prove themselves.

Pay for Performance plans

Team incentives, long term and short-term plans are the different types of plans the company can use in this situation. As previously highlighted, earlier merit which is more of a short term pay for performance can be utilized as an incentive for employees since the merit increases. Direct supervisors determine the merit pay. They are responsible for conducting annual evaluation to basically rate the improvements employees are making. (Newman, 2017). If improvements need to be made this is an easy way to measure the progress. Team incentive is the next pay for performance plan. In this case scenario, the best form of team incentive is gain sharing. When used in an organization gain sharing employees stand to gain financially and at the same time, the performance of the company improves. However, in my view I do not see it as a good idea. Walmart is retail chain and if employees are given the incentive of financial gain it could be result in lawsuits since the process could benefit some and discriminate against others. Lastly, we will at long term pay for performance plan. One example of long-term plan that suits the situation is Employee Stock Ownership Plans. It will allow for employees to perform their very best through buying of stock at a discount. Thus, the company will perform better since their needs are already taken care of. As employees in the organization, they do not earn a lot to cater for all their needs. If the money earned can be used to buy a product or service at a discounted price it is a good way to go. However, I still feel like short term plan is the best pay for performance. Use of merit pay is the best suit in the situation since all employees may want to know how they are doing and where they can make improvements.

Compensation Decisions

Compensation decisions mainly rely on performance appraisals. Metrics are used by employers to measure an employee’s behavior or performance either as an individual or as part of a team (Newman, 2017). The aim of doing this is to determine the type of compensation that is to be given by relying on the metrics. Subjectivity however can come into question. Evaluation can be better understood by using merit guidelines. It will act as a tool to make an employee understand where improvements need to be done and in which specific areas.

Employee Benefit Plan

The next step requires me to go into details about employee benefits plan. Before this however, I will first look at the determining factors. Benefits represent only one part of a compensation plan and does not include the other parts that determine an increase in price and the cost of business. Organizations need to take into account what employees and their businesses can afford while making decisions on benefits plan. It is also important that an employer becomes aware of what their rivals are offering as a better plan of benefit. Another factor is the role that benefits impact on motivation, retention and attraction. When an individual is looking for a job, they will look at what they stand to gain. Thus, employers have to come up with good and attractive benefits in order to retain the employees they already have. This will make them relevant and competitive compare to others in the business environment. Lastly a benefit plan has to meet the minimum legal requirements as the law requires. In addition, there are other factors revolving around an employee in relation to benefits plan such as personal needs and equity. In response to the position, every need of the employee should be different in order to make each plan unique. In addition, the benefits should also relate to other businesses (Newman, 2017). For instance, an individual may need health coverage for themselves or at a personal level. Whereas another employee may need health coverage for other family members, they included. It is important that benefits plan is made in such a way that they put into consideration the needs of the employee at an individual level. My plan is to get all legal requirements and remain competitive in order to manage all these costs.

Benefits Legal Requirement Checklist

· Compensation for workers. This will cater for employees that may fall sick in their line of duty or those injured at work. According to the U.S. Department of Labor (2019) some of the forms of compensation include, medical treatment, vocational rehabilitation, wage replacement benefits etc.

· There is a need for social security. It is requirement that seeks to secure their future and that of others that may depend on them. Funds collected for example are channeled towards providing for the employees in the event they retire.

· Insurance against unemployment is also necessary as it cushions an employee against expenses that may be incurred as a result of unemployment. It provides coverage for duration of time, weekly amount to be paid and financing (Newman, 2017)

· Family Medical Leave Act (FMLA) enables employees to have an extended leave just in case they have a family member that has a member of the family that is seriously ill or injured.

· Employees’ families need an insurance cover that is temporarily extended in case they are facing an event that qualifies the use of the insurance. Thus, there is the need for Consolidated Omnibus Budget Reconciliation Act (COBRA).

· Health Insurance Portability and Accountability Act (HIPAA) acts a protective measure for employees just in case they are being looked down upon due to a medical condition.

Approach to Employee Benefits.

When it comes to choosing benefits an employee needs to be able to choose form different options. The options include, medical benefits, life insurance, savings plans, and retirement in addition to other miscellaneous benefits. In this situation, since majority of available jobs are entry level it is advisable for employees to start saving on retirement as soon as possible. A retirement plan can be created by an employer by putting into consideration if the company can afford the set level of pension for its employees. In addition, they should also look into if the organization can afford pension for every employee in the organization, postretirement sources of income and how security is factored in (Newman, 2017). By doing this an organization can come up with a different life insurance that suits the needs of individual employees. Newman (2017) states that close to three fourths of employees in different organizations have their life insurance paid. It is however optional for employees to have life insurance since most of the time it is free. The employees have to pay an extra amount if they are willing to contribute more than the set limit by the flexibility benefit program in the organization. Employees also stand to gain from other forms of benefits such as medical benefits. There are many forms in which the medical benefits can come in. Health care coverage is the most obvious form and it comes in different types such as POS, PPO and HMO. The mentioned types of health care have different options on premiums and cares for employees to choose from (Newman, 2017). Incentives for healthy behavior can also be used by organizations in order to benefit the health of an employee and cut the cost of health care in case an employee falls ill while working in the organization. The organization can also offer long term and short-term vision, dental and disability plans depending on the needs of the employees. Miscellaneous benefits can be given in form of elder care, child care, paid time off not worked, paid time off etc. It is the responsibility of every organization to ensure that all employees access the all benefits offered.

References

Masternak, R. (n.d.). Compensation: Incentive Plans: Gain sharing. Retrieved from https://hr

guide.com/data/G443.htm

Newman, J.M., Gerhart, B., Milkovich, G.T. (2017). Compensation. (12TH Ed.). New York, NY:

McGraw-Hill Education.

U.S. Department of Labor. (2019). Workers’ Compensation. Retrieved from

https://www.dol.gov/general/topic/workcomp