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Different firms use different payment methods to meet the needs of the employees so that they can be retained by the firm for a long time. Some of the payment methods used by the organization include incentives and bonuses, gain sharing, profit sharing, commission, merit pay and on the spot awards (Bryant & Allen, 2013).

On the spot award is the compensation given when the work is completed. It helps in boosting the morale of the workers, and work harder to be recognized by the management and colleagues. The disadvantage is that, it might be used by the management to award some favoured workers thus causing anger among other employees towards the administration. Merit pay focuses on performance and the advantage is that, it increases the base gain by the employees. On the contrary merit pay may not increase the productivity of the firm thus leading to increased burden without benefits accompanying it. Commissions are awarded based on the sales made. The advantage is that, it encourages the workers to make more sales to raise the firm’s sales. The disadvantage of the commission is that, it discourages teamwork since the commission is paid to individuals, not teams (Bryant & Allen, 2013).

The fourth pay method is profit sharing which the employees get subject to the pre-taxed profit realized by the company. The pay encourages the employees to work together for a common goal since, all employees will benefit from the profits. It discourages some workers because hard work is not rewarded using this method. Gainsharing help in creating equality among employees since all of the workers receive the same incremental. On the contrary, it discourages the workers who are more dedicated to their work because of the flat payment. Incentives and bonuses are given to employees for work done thus helping the firm to increase its productivity. The disadvantage of this method is that, it may cause competition among employees therefore affecting the performance of the company (Bryant & Allen, 2013).

Now more than ever it is important for Motors and More to recognize the need for a competitive benefits package for their employees. Employee benefits are part of the total rewards concept and must meet the needs of employees who have been with the company long-term and every new-hire involved in the company’s expansion. M&M currently only offers minimum wage and statutory benefits. Statutory benefits include:

· Social Security

· Workers’ compensation

· FMLA leave

· Unemployment compensation

The rationale for offering the following benefits package is primarily labor market related and serves to attract a workforce that will be dedicated to the goals of the company and combat the high employee turnover rate. A secondary reason is to satisfy the demands of government regulations and labor unions (Ivancevich & Konopaske, 2013). Although the following package is streamlined, it is considered competitive and will leave room for expansion as the company is able to support the cost of contributing to more employee benefits in the future. Furthermore, M&M will need to research their competitors’ benefits packages and attempt to exceed them in order to gain traction in a market that is currently oversaturated with workers.

Health, Dental, and Vision Insurance

In order to remain compliant with the employer mandate of the Affordable Care Act (ACA), organizations with 50 or more full-time employees must offer health coverage. This makes health insurance a requirement and not an added perk. M&M’s health insurance plans should be sure to offer:

· Preventative care

· Treatment of illness, disease, and accidents

· Inpatient hospital stays

· Prescriptions

In addition to offering health insurance options, M&M can choose to offer separate dental and vision plans for employees to opt into on a voluntary basis. Although not mandatory, dental and vision should be partially funded by the company as a way to entice new employees and retain existing ones.

Additional Voluntary and Ancillary Benefits

Voluntary and ancillary benefits can be offered by M&M but will be paid largely by the employee through pay deductions. Much like health insurance options, offering these benefits will aid in company expansion by recruiting a dedicated workforce. Ancillary benefits that M&M can offer are:

· Retirement (IRA and 401k)

· Disability Insurance

· Life Insurance

· Tuition Assistance/Professional Development

Once production demands are met and adequate cash flow is realized, M&M can begin to match employee contributions their retirement funds up to 5 percent of their salary and provide $1500 per year in tuition assistance.

Costs of Benefits (Deductions and Contributions)

Cost is a factor that M&M must consider when making decisions on which benefits to offer. In order to be competitive, the company will need to find an equilibrium between what they can afford to offer and the benefits that employees need. Contributing to employees’ health insurance premiums and health savings accounts are a necessary part of this initial benefits package (Namely, n.d.).

· Health Insurance Premiums. M&M should commit to covering half of monthly health insurance premiums for employees as an added incentive. This is normally a requirement in most states that helps reduce the cost burden on employees.

· Health Savings Accounts (HSA). These accounts are designed to reduce the cost of health insurance deductibles which are often high for employees and are tax-exempt. Employees and employers both contribute these accounts. Health savings accounts will be initially offered to employees in the benefits package.

As M&M continues to expand, the company can look into increasing its options for funding health insurance deductibles. Some additional future options are HRAs and FSAs.

· Health Reimbursement Accounts (HRA). These are funded by the employer after a medical expense is incurred by an employee. Although an attractive benefit, M&M can explore HRA contributions as a future option but should not offer it during its initial expansion.

· Flexible Spending Accounts (FSA). M&M employees can contribute part of their paycheck (up to $2,650 per year) to an FSA. Contributions are not taxed and can be used to pay for qualifying medical expenses (Namely. n.d.).

In 2018, the national average cost of providing employee benefits is equal to $11.31 per hour, per employee. This is on top of what employees receive for basic wages or salaries. Depending on salary range, total annual costs for M&M will range from $10,000-$20,000 per employee. While this number may seem high, the cost of continuing to only providing statutory benefits is much higher as workers (no matter their talent level) will migrate to competitors that offer more attractive benefits. (Gartenstein, 2018).

Additional Workplace Perks for Future Implementation

In addition to the benefits listed above, M&M can begin plans to introduce extra perks for employees before, during, and after their workday. Once financially feasible, an employee gym and childcare center can be built. Healthy lunches can also be catered on Fridays with guest speakers and other educational material available to promote healthy lifestyles.

Motors and More, Inc. Compensation Communication Plan

The last step in the employee compensation plan is communicating with employees about their compensation and benefits so that all employees understand their options. A personalized communication strategy is necessary for each audience within the company. For example, employees in the manufacturing department will benefit from face to face communication in large groups whereas office workers will need computer based communication such as webinars and videos. Certain mediums will be available to all employees in the form of publications in printed brochure form and intranet/email form. Managers will need to make sure they are well-versed on all benefit and compensation options so that they are able to assist their employees with any questions they may have (McCain, 2007).

It is also imperative to measure how well employees understand their benefits. In most cases, surveys reveal that benefits are poorly understood to the degree that voluntary enrollment numbers are lower than expected. It is not enough to simply post information on the company intranet and expect enthusiasm from audiences. HR managers must empower employees to make educated decisions on what benefits and compensation plans work best for them and their families. This can be accomplished through the following mediums:

· Print

· Team Briefings

· Intranet Announcements

· Social Media

· Benefits Fairs

· Text Messages

· Email

(Fisher, 2017)

According to Fisher (2017), “Organizations that are highly engaged with employees experience an earnings-per-share (EPS) growth of 28 percent compared to 11.2 percent rate for organizations with lower engagement practices” (p. 117). There are now more ways than ever for M&M to engage employees regarding their available compensation and benefits plans. As shown in the list above, benefits fairs are an innovative way for employees to learn about their available benefits in a fun, casual environment. These fairs can also serve to recruit much needed employees. Additionally, the increased usage of human resources information systems (HRIS) will allow for employees to receive basic information via text message as benefit enrollment periods open and close.

Figure 1. Motors and More, Inc. Employee Compensation and Benefits Communication Plan (EBCP). This figure explains the details of the communication plan.

The M&M compensation and benefits communication plan will regularly consider factors such as timing, frequency, mediums, and purpose while employing this internal communication plan. More than just a plan, effective communication regarding compensation and benefits should be considered part of M&M’s prospector strategy because if the desired results are achieved, the company can avoid turnover, empower employees to make educated decisions, and remain competitive in the market.

References

Bryant, P. C., & Allen, D. G. (2013). Compensation, benefits and employee turnover: HR strategies for retaining top talent. Compensation & Benefits Review, 45(3), 171-175.

Fisher, J. G. (2017). Who benefits from benefits? Strategic HR Review, 16(3), 117-124. Retrieved from https://saintleo.idm.oclc.org/login?url=https://search-proquest-com.saintleo.idm.oclc.org/docview/1948746803?accountid=4870

Gartenstein, D. (2018, June 30). Cost of Employee Benefits for an Employer. Retrieved July 19, 2018, from https://smallbusiness.chron.com/cost-employee-benefits-employer-2694.html

Ivancevich, J. M., & Konopaske, R. (2013). Human resource management. New York, NY: McGraw-Hill Irwin.

McCain, D. (2007). Motors and More Inc. – A Progressive HR Case Study. doi:10.4135/9781473957213

Namely. (n.d.). Employee Benefits Guide For Mid-Sized Companies. Retrieved July 19, 2018, from https://library.namely.com/employee-benefits/