Research Paper on Effective Total Compensation Design Plan

Introduction

A total compensation system largely determines whether an organization will attract, motivate and retain staff. A good compensation plan ensures that employees remained engaged and motivated hence ensuring maximum output that profitable returns (Weldon, 2012). Understanding what the employees want is paramount and ensures the package arrived at is effective despite the numerous changes in the existing labor market conditions and changes in workers recruited in the organization. This paper aims at analyzing an effective total compensation design plan.

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Total compensation is characterized by base wage and other monetary compensation, benefits, and recognition and non-monetary compensation. These elements create a complete package in addition to ensuring internal pay equity plus giving the organization external competitiveness. Also, it allows for fairness and compensation regarding the stipulated rules and regulations. The base wage is normally fixed and paid either hourly or at an annual rate. Senior positions are paid on an annual basis while junior positions and entry-level are paid an hourly rate. Other payments include bonuses and gratuities. Benefits are paid either in full or part by the employer and include coverage for the work done. They include employee discounts, insurance and extra vacation days among others. Recognition and non-cash benefits include discounted meals, flexible working hours and spot rewards.

The company am interested in working with is Facebook. Facebook is one of the leading employers in the market and particularly globally. As of December 2017, the number of full-time employees was at 25,105. Facebook aims at availing a platform where the world is brought closer together by maintaining a connection with family and friends. It has a hacker culture where creative problem solving and rapid decision making is skills that are rewarded. The executive positions are founder and chairman, chief operating officer and chief financial officer.

The compensation of employees deviates from the norm where individuals are not given too much negotiate for their package. This is because the organization does not hire for negotiation skills. New candidates are paid depending entirely on a formula. Their previous and current salaries are considered. A higher proposed salary is allowed while a lower compensation is reviewed to give a competitive offer. This ensures fairness regarding compensation. Annual benefits are also given satisfactorily making it one of the best places to work.

The compensation design plan system I'd propose would entail various dynamics in the market. First, I would consider giving the employees increased health coverage. With the rise in numbers of patients suffering from terminal illnesses like cancer, I would opt for a health cover that gives them security in case of such an eventuality. Another plan would be lucrative retirement plans to give them comfort once they serve their term at the company. Another aspect is paying raises to offer a favorable platform that dissuades the employees from turning to the competition. There has been a tremendous rise in the development of social media companies as well as internet-based organizations. To ensure the staff remains committed to the organization addressing rises once the payment ranges are outdated is paramount (Phonsanam, 2010). Another compensation design plan I would incorporate is the use of efficient payroll software. It makes the compensation process easy and considering it entails the use of technology, there is record keeping, accuracy and timeliness hence improving the working environment. Finally, I would review the compensation perks for the owners since their risk in owning the company should also be rewarded.

References

Phonsanam, S. T. (2010). Total compensation practices and their relationship to hospitality employee retention.

Weldon, D. (2012). Linking total compensation to performance. Compensation & Benefits Review, 44(3), 149-153.