LL BEAN COMPANY 2
LL Bean Company
Using products or services to enhance the total compensation for its employees
According to Noe et al. (2019), total compensation consists of cash compensation (salary,
merit increases, bonuses, stock options, and other incentives) and benefits (e.g., health insurance,
paid vacation, unemployment compensation). Heneman (2007) indicated that total rewards
encompass not only compensation and benefits but also personal and professional growth
opportunities and a motivating work environment (Heneman, 2007). Regarding LL Bean
company, employees tend to feel that their compensation is not adequate, even though they are
given competitive health and life insurance and other employee benefits. There has been a great
shift in employees' desire not only to get enough for their families but longing to feel validated in
their work, get high-quality life, and enjoy what they do (Reed, 2009). One way in which LL
Bean uses its products or services to enhance employees' total compensation is through a reward
system based on performance, external benefits like paid leaves and fitness programs, store
discounts, and free gear use. The company offers employees an opportunity to get products at
lower prices, which is an incentive that motivates employees to work hard (The Fortune, 2017).
In 2006 when LL Bean was doing well, it gave a cash bonus of 7.5% of the yearly pay to its
employees, proof that the company wants to keep its employees happy, which promotes hard
work.
The identified internal and external strengths and weaknesses
LL Bean has been operating for the last 80 years and has undergone various changes in
its operations. Although the company has experienced multiple changes in the culture and
demand, the business model has been the same until the 1990s, when it took a technological shift
in global operations. The internal strength that responds from a total rewards perspective is
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customer service. When the LL Bean Company started to sell its products, it offered 100 pairs of
canvas and rubber boots; whereby, 90 pairs were purchased and then returned for a refund. In
portraying good customer service, the company gave every pair a full refund (Reed, 2009). The
company fixed any issue or problem that came up about the product immediately at no cost. The
external strength identified in the company in responding to the total rewards perspective is the
company's focus on goodwill and social responsibility. In 2019, LL Bean doubled its donations
to charity by giving $4 million to charity organizations, demonstrating clear intentions of
supporting the community (Reed, 2009). This not only serves the active community, but it is a
demonstration of social responsibility from the management, which is an incentive to consumers
to continue buying LL Bean company products, and for employees to desire to continue working
for the company.
The noted weakness in responding to the total rewards perspective is the lack of
knowledge in managing its e-commerce site. After the company launched e-commerce, it
demonstrated the weakness of focusing more on getting high profit instead of improving the e-
commerce site. Within the LL Bean company staff, a weakness was identified. The reason being
that the company lacked employees with the necessary skills to sustain the company in a highly
competitive market; thus, the company had to create new positions to accomplish the
management of the e-commerce site (MBA Skool Team, 2020). This required the company to
build a comprehensive framework for employees' compensation and benefits.
Examples of Traditional and Non-Traditional Rewards
LL Beans provides its employees with traditional rewards that include pay based on
performance, discretionary bonuses, health, life insurance, paid vacations, and training programs
to enhance employee promotion. The company has been expanding its reward system to motivate
its employees to work hard and promote its brand. LL Bean offers credit card services with no
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annual fee, gives 4% off when purchasing LL Bean products, and earns loyalty points without
expiry date and used for future purchases (Valigra, 2018). Non-traditional rewards used by the
LL Bean Company include free renting of products, sponsoring the adventure days, fitness
programs, and banking discounts. These perks encourage the company's employees to work hard
from any location (Reed, 2009). These rewards are used to meet organizational goals of creating
a positive working environment for employees. Through the rewards, the company fosters a
positive atmosphere and satisfaction of employees who work in the company.
Aligning the Company's Compensation Benefits with the Corporate Values
The alignment of compensation benefits with corporate values is a priority goal of
organizations. In aligning the compensation benefits and corporate values, LL Bean boasts its
strong emphasis on customers, profitable benefits, and upholding its private ownership. The LL
Bean Company's management shows the alignment of the compensation benefits and values
through the company value statement. The statement indicates that customers trust the company
to tell the truth, sell high-quality products, guarantee customer satisfaction, pay employees fair
wages, provide growth opportunities, participate in community projects, and sustain a good
working environment (Reed, 2009). This attitude in the company empowers its employees
through improved wages and benefits to make them desire to improve their workstations,
environment, and community.
Recommendations Regarding an Expansion of the Benefits Programs
The first recommendation of expanding the company's benefits programs is offering
green initiatives that would inspire employees to save the environment and invest in programs
that will positively impact the environment. This will reflect a positive image of the company
and positively impact the work of employees. The second recommendation is expanding the
health benefits into a consumer-driven health plan, which will enable employees to have more
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control over the health plans they chose to pay. Besides, the company can also benefit by giving
employees a specific pretax amount to buy health coverage and use the remaining amount in
buying ancillary benefits such as disability and dental services. This will help the company
realize its organizational goals of improving employees' livelihood and working conditions
(Anderson, 2018). Finally, the company can expand its benefit programs by enlarging the onsite
services such as childcare programs, fitness centers, and cafeterias to enhance employees'
welfare and increase their productivity.
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References
Anderson,CJ. (2018, March 16).CLL Bean blaming difficult 2017 for job cuts, no employee
Bonuses. Lewiston Sun Journal.Chttps://www.sunjournal.com/2018/03/16/l-l-bean-
blaming-difficult-2017-for-job-cuts-and-no-employee-bonuses/
Heneman, R. L. (2007). Implementing Total Rewards Strategies - A guide to successfully
planning and implementing a total rewards system. Alexandria, VA: SHRM Foundation.
Retrieved from https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-
and-expert-views/Documents/Implementing-Total-Rewards-Strategies.pdf
MBA Skool Team. (2020, July 5).CLL Bean SWOT Analysis, Competitors, STP & USP. MBA
Skool-Study.Learn.Share.Chttps://www.mbaskool.com/brandguide/lifestyle-and-retail/
3827-ll-bean.html
Noe, R. A. (2019). Human Resource Management: Gaining a Competitive Advantage. New
York, NY: McGraw-Hill Education.
Reed, S. M. (2009).CBenefits and Business at Aflac and LL Bean. Society for Human Resource
Management.
The Fortune. (2017, March 5).CL.L.Bean: Best Companies to Work For.
Fortune.Chttps://fortune.com/best-companies/2015/l-l-bean/
Valigra,CL. (2018, July 9).CLL bean rolls out new credit card with rewards points that never
Expire. Bangor Daily News.Chttps://bangordailynews.com/2018/07/09/business/ll-bean-
rolls-out-new-credit-card-with-rewards-points-that-never-expire/
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