Rwt1 Compensation Strategy
Business Research Report
Compensation Strategies
ABC Manufacturing
Presented to: Western Governors University Assessment Code: RWT1
Table of Contents
Executive Summary 3
Introduction 4
Research Findings 5
Market Based Pay Structure 5
Traditional vs. Broadband Strategies 6
Total Rewards Strategy 7
Recommendations 8
Conclusion 9
References 10
References (continued) 11
Executive Summary
There are three compensation strategies that we looked at in depth within this paper.
1) Market Based
2) Traditional vs. Broadband
3) Total Rewards
Total Rewards we found could be costly and extremely difficult to implement. This could create problems within the company should employees view certain bonus’ or incentives given out as unfair. I recommend against this strategy for this company.
Market Based is a strategy that uses current survey numbers from industry organizations such as the National Association of Manufacturing (NAM). This is a transparent strategy that is easy to defend as it is coming from a respected source.
Traditional is a strategy that has been used for a very long time and has been proven to work. It is easy to implement and is typically viewed by employees as fair.
In doing this research I believe that we should us a combination of Market Based and Traditional. We can use the ‘step’ structure of the traditional pay scale and base the numbers off of the market based survey from NAM. We would create grades with 5% between each pay grade and 5 steps within each pay grade that would have a 2 ½% increase with each step. Employees would get a 2 ½% pay increase for their first 5 years (unless they come to the company with experience and are started at a higher step). After 5 years we would hope that that person is growing in their
Compensation Strategies
ABC Manufacturing
Presented to: Western Governors University Assessment Code: RWT1
Table of Contents
Executive Summary 3
Introduction 4
Research Findings 5
Market Based Pay Structure 5
Traditional vs. Broadband Strategies 6
Total Rewards Strategy 7
Recommendations 8
Conclusion 9
References 10
References (continued) 11
Executive Summary
There are three compensation strategies that we looked at in depth within this paper.
1) Market Based
2) Traditional vs. Broadband
3) Total Rewards
Total Rewards we found could be costly and extremely difficult to implement. This could create problems within the company should employees view certain bonus’ or incentives given out as unfair. I recommend against this strategy for this company.
Market Based is a strategy that uses current survey numbers from industry organizations such as the National Association of Manufacturing (NAM). This is a transparent strategy that is easy to defend as it is coming from a respected source.
Traditional is a strategy that has been used for a very long time and has been proven to work. It is easy to implement and is typically viewed by employees as fair.
In doing this research I believe that we should us a combination of Market Based and Traditional. We can use the ‘step’ structure of the traditional pay scale and base the numbers off of the market based survey from NAM. We would create grades with 5% between each pay grade and 5 steps within each pay grade that would have a 2 ½% increase with each step. Employees would get a 2 ½% pay increase for their first 5 years (unless they come to the company with experience and are started at a higher step). After 5 years we would hope that that person is growing in their
References: (continued) Stephen Miller, CEBS (6/27/2011). Align Pay with Business Priorities to Reap Rewards. http://www.shrm.org/Publications/HRNews/Pages/AlignPaywithBusinessPriorities.aspx Lea Stone, Jeremy Greenup and Leigh Culpepper, Culpepper & Associates ( 10/20/2008). Salary Range Structures and Budgets: 2008 vs 2009. http://www.shrm.org/hrdisciplines/compensation/articles/pages/salaryrangestructuresandbudgets2008vs2009.aspx