HR

11/28/2021

Milestone Four

At Maersk the utilized compensation philosophy is the industrial compensation philosophy. This type of compensation philosophy encompasses the classification of employees based on various job groups. Job groups in employment are made based on level of academic qualification, work experience or work position at the work place. Hence with each promotion or rank at the work place the employees get to have higher job group hence increased compensation and better work environment. Hence this establishes a culture where people increase their work ethics, performance and hard work to increase their job group. Hence the job group is the primary factor in job compensation at Maersk (Groysberg and Abbott, 2012).

The market can affect the compensation philosophy in various ways. When determining to increase or reduce the compensation of particular employees, the performance of a particular period comes in handy. Here by gauging the current market performance for a quarter or annual company performance the business can decide to reduce or increase the salaries for the particular job groups. With increased performance and returns for the business it becomes possible to come up with salary increase. If the performance is low the persons job group is reduced hence the compensation is negatively affected hence the market directly affects the compensation.

Salary surveys to an organization are crucial as they determine whether a particular organization will be able to pay for certain positions and job groups. Salary surveys work through trying to collect information about employee salaries and benefits. The different surveys are available across different industries, jobs, religions, and organizations. Hence by getting information of the compensation structure for different countries and organizations based on specific professions, it becomes possible to know how to fairly compensate and reward one’s own employees. Through surveys information obtained gives the employees chance to work for what is their worth and be able to receive the most suited salary.

Salary surveys also help organizations in the setting and establishment of salary structures within the organization (MARS, 2021). Having an organization where an employee gets paid same as their manager may result in work conflict and disrespect. Hence for there to be a well-established work role and obligation structure it is crucial that all the employees are paid based on the organization and role structure. Through salary surveys for other organizations and businesses out there makes it easy to establish and easily manage employee payments. Hence it is makes it easy to manage and establish the right compensation for the workers within the organization.

Discretion for any business allows for businesses to come up ways to cut on unnecessary costs. Discretion benefits entails to allowing of employees to make a personalized package that meets their specific needs. Hence with discretion benefits it becomes possible for employees to choose the package that best describes and suits them. Hence employees get to have their individual preference. Additionally, such preference allows for people to be comfortable with the organization compensation structure. This makes Maersk one of the best suited work places employees all around the world.

Another key importance of the benefits of discretion to an organization is the capability to attract professional and well- suited employees for posts within the organization (UBC insurance solutions, 2021). Hence through discretion the business will be able not to lose employees to other organizations but attract the best employees suited for particular jobs in the business. People tend not to be limited to particular compensations hence discretions will give a chance for people to select different cuts on their compensations such as insurance and retirements deductions. Hence some people would not want some deductions or pay privately from such deductions. Hence, this gives employees some freedom over their compensation.

Reference

MARS, (2021) Salary surveys: Compensation for employees. Retrieved from https://learn.marsdd.com/article/salary-surveys-compensation-for-employees/

UBC insurance solutions (2021) what are the discretionary benefits and should you consider them? Retrieved from https://www.ubcinsurance.com/what-are-discretionary-benefits-and-should-you-consider-them/

Groysberg, B. O. R. I. S., & Abbott, S. (2012). AP Møller-Maersk Group: evaluating strategic talent management initiatives. Harvard Bus Sch Case, 2012, 412-147.