Essay Sample on Total Compensation Plan

Introduction

The group incentive program is described as an award that gives time- off grants, lumpsum cash payments, and informal recognition assets to a group of employees who meet or surpass the pre-established objectives of the organization's performance. Group incentive performance is suitable under these situations; when performance cannot be precisely measured individually when a similar type of skills are possessed by workers, when task completion is linked to group joint efforts and when the number making the group is not large. Several methods are used in distributing bonus among group employees, some of the frequently used criteria are as follows; when group members are paid the salary of the same scale, then the bonus is divided according to the time scale. If the worker's different amounts of wages then reward may be distributed according to the payment wages. The bonus may also be paid from a given percentage, pegged from experience, salary earned and skills. The different schemes used in payment of the bonus includes' Priestman's plan, Scolan Plan, profit sharing plan and co-partnership plan of sharing group incentives.

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Long-term incentives are rewards to the organization's top officers for achieving the strategic goals of the company which maximizes on the shareholder values. These are always provided inform of compensation in stock-based, stock options, performance shares, and cash. The performance duration of long-term incentive goes for 3 to 5 years without any payment of bonus to the executive until the performance period elapses. Long-term incentives vary according to the company's goals with the most prevalent being return on assets, operational measures like earnings per share and finally return measures. Compensation of senior executive is made up of financial compensation and other awards that are non-financial which the CEO's receives from the firm for the excellent performance to the company. It comprises of their salary, benefits, call options of the organizations stock shares and bonuses. The rewards for performance take into account the government regulations, desires of the organization and the board members and the tax law. It is a short-term initiative to improve the company's performance (Overton & Steele, 2010). There are basic policies that create the right monetary incentive for senior executives to enhance the value of the organization. They include the following; making the CEO to be substantial owners of the company, restructuring salaries, stock options, and bonuses advocating for decent rewards for high performance and penalties for poor performance to enhance the threat for dismissal for poorly performing employees.

There are several common benefit programs that employees should get from their employers. These benefits include; Health insurance, compensation time, flex time, phased retirement, professional development, relocation, vacation time and tuition reimbursement. The other benefits are sick, personal and parental leave, life disability insurance, child and elders care benefit among others (Colletti & Cichelli, 2005). These benefits are offered to motivate the employees to work diligently. Fringe or perquisites benefits are benefits provided to employees apart from the normal salary. It covers social security measures, educational facilities, retirement benefits, housing, medical, financial advice, special parking, vacation travels among others. They are offered to provide the qualitative environment and to improve the employee's morale.

Compensation administration forms part of management that focuses on controlling, planning, and organizing the employee's payment for the work they have done. It includes base, incentive pay, health insurance vacation pays among others. The key objectives of the administrative compensation include; efficient maintenance of workforce to help the company comply with the state and local rules based on what companies can afford and to provide equitable pay.

Variable reward plan for my organization. The variables considered in my organization are commitment and quality of work output. The employees who show 100% commitment and dedication to work and even go for extra hours for the company's growth are to be rewarded with a salary increment as per the output they give. Those who show diligence, innovation and quality work in enhancing customer attraction are to receive a 10% pay rise. The short-term incentive plans for the organization- sales volume of 99% of the year's sales objective calls for a pay rise by 25% of the employees' salary and appraisal. Those who achieve sales of over 90- 95 % are to receive 15% percent pay rise (Meehan & Lemesis, 2007). Those who have done 60-79% yearly gets 5% annual pay increase. The long-term incentive plans, the employees who invent a new cost-effective method of production within five years is rewarded $ 5 million and the comfortable car. The executives who show more than 80% improvement in their various departments are to be awarded a 20% pay increase plus other bonuses.

Conclusion

Some of the best plans of communicating to employees about the total reward package are; speaking about the employee benefits during the orientation of the newly hired members, through meetings, special announcements and over newsletters. Assigning an individual or a team to organize for the communication strategy in advance, the piece should touch on everyone. The manager can also communicate to the employees through the human resource portal to quickly find the planned benefits. You can also consider creating specific checklists and informational packets for those nearing retirement and new hires among other methods of communication. In conclusion, a total compensation plan and better methods of communicating them offer a lot of merits to the employees. They increase the employee's motivation, productivity, job satisfaction, employee loyalty and attraction of top talent. It is a very significant process to an organization, therefore should be employed by all organizations.

References

Colletti, J. A., & Cichelli, D. J. (2005). Designing Sales Compensation Plans. Scottsdale: WorldatWork Press. Retrieved from http://165.193.178.96/login?url=http%3a%2f%2fsearch.ebscohost.com%2flogin.aspx%3fdirect%3dtrue%26db%3dnlebk%26AN%3d543257%26site%3deds-live

Meehan, R. H., & Lemesis, G. V. (2007). Determining Compensation Costs. Scottsdale: WorldatWork Press. Retrieved from http://165.193.178.96/login?url=http%3a%2f%2fsearch.ebscohost.com%2flogin.aspx%3fdirect%3dtrue%26db%3dnlebk%26AN%3d547552%26site%3deds-live

Overton, B. B., & Steele, M. T. (2010). Designing Management Incentive Plans. Scottsdale: WorldatWork Press. Retrieved from http://165.193.178.96/login?url=http%3a%2f%2fsearch.ebscohost.com%2flogin.aspx%3fdirect%3dtrue%26db%3dnlebk%26AN%3d543256%26site%3deds-live