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Human Resource Management Compensation. The employee is offered a competitive compensation program. The program includes a detailed compensation package, incentive plan and the benefits plan. The compensation package describes in details the financial compensations to enhance the activity of the employee and provide the normal living standards. The incentive plan is directed to encourage additional performance of the applicant to proposed post in the way of various initiatives etc. The incentive plan is not aimed directly to the profit sharing by the employee.
Recent events in the USA, the Enron scandal showed that the profit sharing is not the best way to encourage the employees performance. The scandal showed that the share award became one of the reasons of the Enron's fall. The management of the company used that tool to encourage the employees presenting such HR policy as a revolutionary approach. The result of such approach was that the employees started chasing their income at a stock exchange and got involved into insider trading, the disgracing phenomenon that was one of the reasons of the Enron's fall. The profit sharing should be the additional benefit but not the main one as it was presented by the management of Enron.
The case of Enron showed that such benefit as the employees direct participation in the profit sharing may cause fatal consequences even for such a huge corporation as Enron. 1. Compensation Package. The following compensation package is offered that is going in line with the HR strategy of the corporation Financial Compensation. 1 Fixed Pay. Fixed pay is the part of financial compensation that does not depend upon the companys or the employees performance. Base Pay. Base pay is the payment in the form of the salary that is a part of a fixed pay.
The salary will be $ 300 per week. The salary will be negotiated finally during the personal interview. The salary is the fixed payment and may be changed in the following cases. When the employee changes the job responsibilities he may get the promotion payment. Thus if the employee is promoted to the high post he needs the increase of the salary. The salary will be increased in this case at least 5 per cent or the employee will get the salary no less than the average salary of the new group post no matter how higher it is but not less than 5 % higher than at his previous position.
Pay For Performance. An employee may get the changes in the base pay according to the results of his duty. The performance of his base duty is paid extra when it increases the expectations of the management of the company. This Pay for Performance may include the Merit Increase. If employee shows the increase of the job performance and productivity that is higher than hat expected by the administration he may get the merit increase. To receive the merit increase the employee must have been employed in the company for 1 year at least.
An employee may get a lump sum payment. Such payment may be granted disregarding the term of employment. The amount of such payment is defined by the management of the company. Salary Reduction. The salary may be reduced as a consequence of the poor performance. Such reduction is defined by the management of the company.
The level of the reduced salary should not be lower than that of the minimum in the same job group. The salary may be restored any time on improvement of the employees performance. Differential Payment. The Differential Payment is a part of a compensation payment. It is paid for the specific working conditions different from the standard ones assuming that the base working week is 40 hours. Overtime activity is paid at a rate 1. 5 per hour comparing with the standard working time.
The payment rate at the days off is 2 per hour comparing to the standard rate (40 hour working week). Longevity Payment. The employees are eligible to receive the longevity payment depending upon the years of service for a company. The longevity payment is calculated according to the following table: Years of service for a company
Longevity rate monthly.
Less than five years
0 %
More than five years and less than eight years
20 %
More than eight years and less than 15 years
40 %
Fifteen years and more
80 %
These longevity rates are applicable disregarding the initial or current position of an employee and are calculated taking the current salary as a basis. Variable Payments. Variable payments are paid depending on the extra performance of the employee... The variable payment may not increase 15 % of the salary.
The variable payment is the subject of the managements competence and is defined individually. Enhanced Compensation Award. The Enhanced Compensation Award is applicable to employees who increase the managements expectations of their performance. The employees whose activity increased the revenue of the company may get the Enhanced Compensation Award.
Such award should not increase 8 % of the employees annual salary. The decision on the Enhanced Compensation Award is the subject of the managements solution. Indirect Financial Compensation... Payment for Time. The payment for time is a part of the indirect payment. This payment includes the payment for the time periods during which the employee is not engaged in his professional activity directly, and which is paid on the regular salary basis per hour.
This payment includes the lunch break which is 45 minutes per working day, short rest breaks, twice per day 20 minutes each. This payment includes the payment for a time spent on the professional training. It may vary according to the training schedule aimed to increase the professional skills of the employee. It may also include the payment for the time spent on the corporative events aimed to improve the corporative culture and consolidate the staff of the company. Payment for Time while the employee is not at work. This payment includes various types of payable leaves.
The employee may take payable leave due to his sickness no more than 10 hours per month. Such leave should be covered by the doctors certificate. The sickness leave is paid on the general salary basis per day. The vacation leave is payable depending upon the total duration of the employees work at the company. The rates of the allowable paid vacation are calculated according to the general HR policy of the company and the subject of the additional agreement. Employee has the days off during the national and state holidays.
The list of such holidays is common for the entire country. If employee needs to work during state or national holidays he receives the compensatory days off during the working week. The administration may encourage the employee with the administrative payable days off for the outstanding performance. The employee may apply for the emergency days off in case of some events in the family like the death of the spouse, the family members, their serious illness or any other family events Incentive Plan Increasing the base salary.
All the employees of the company are required to follow their job descriptions and regulations. An employer of the company may increase the employees base salary depending upon the employees performance over their job description. The salary may be revised quarterly in amount up to 15 % depending upon the extra outcomes of the employees job. Group Incentive.
The employee may be granted a reward for the group activity. If the group he is working at gains some considerable goals for the company the members of the group are granted the extra fees. Such payments are assigned on completing the program and are shared within the group according to the labor contribution of the members. The value of such incentive is defined by the administration.
Profit Sharing Incentive. Though it does not correspond to the companys HR policy, the employee may get certain amounts of the companys shares. Such shares may be granted for the outstanding contribution only and are the subject of the managements decision. Additional Incentive. It is in the companys policy to encourage any incentive in the matter of cost reduction activity of the company. The employee is encouraged to improve the performance of the company.
Any reasonable initiative aimed to optimize the companys performance is welcomed and is to be awarded depending upon the results such initiative may bring, Non Professional Incentive. The top management is anxious about the corporative culture of the company. The employees are encouraged to suggest the improvements to the corporative culture and the corporative style of the enterprise. The reasonable suggestions will be accepted and awarded. Benefits Plan. A company compensates the usage of the personal car of the employee.
The company compensates the fuel, parking, maintenance and toll charges. The employee should keep the records with details of their journeys such as mileage, destination etc. The employee should prove the insurance coverage of the car. As a benefit company may cover the private trips expenses on the weekends in the amount agreed. Bibliography: TOTAL COMPENSATION PACKAGE, Texas State Auditors Office, available at web A Staff Incentive Plan, available at web Citation: Texas State Auditors Office A Staff Incentive Plan
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