Assignment 2: Compensation Plan Outline

Compensation Plan Outline

Introduction

The strategic goal of any organization is delivery of quality product and services to the end customers along with being cost effective and decreasing expenses. There have been various organizations that choose to implement compensation and benefit plan. Ford Motors is one of those leading names in Automobile industry which has always come up with one such justifiable approach that recommends that the employee get insurance benefits, health and security benefits, vacation pay, stock options, profit sharing, contribution to retirement and pay for time not worked (Meyerowitz, 2000)..

Discussion

Benefits are forms of value, apart from payment, that are given to employees in return for their inputs to the organization. There are other forms of intangible benefits that Ford can decide to extend to the employee, including, appreciation from a boss for work well done, nice office and likelihood for promotion based on performance. Ford provide compensation and benefit plans to the employees in order to attract, improve the retention rate and align employee's interests with those of other stakeholders. Apart from the incentives offered, multitude resources, nice office, adequate funding for projects and strong support from the administration and board of directors will be considered a benefit (Meyerowitz, 2000).

Evaluating Compensation Plan

While considering the compensation plans provided by Ford Company, it can be viewed that it not only provided defined pay structures but also provide a way out for employees to operate in this dynamic market environment. Ford can improve the discretionary benefits by offering competitive packages to the employee residents. Mental health, substance abuse, physical health, dental and vision insurance, tuition assistance, a pension plan, life insurance, and payment assistance for child care and other such compensations can be introduced at a massive level to all the employees of the company.

The current compensation plan is considerably appropriate for the defined company goals and employees motivation. But Ford should initiate other discretionary compensation plans, which could help employees to retain their life earnings. Since Ford operates in a dynamic market environment, many obstacles come in the way of compensation and benefits plans. For example, there are laws that affect the decisions that Ford makes regarding compensation and benefits. Most aspects of employee compensation are governed by laws, and thus, there is little room left for innovative ideas to structure compensation strategy (Kotter, 1995). An example of such legislation is imposition of minimum wage.

Most beneficial ratio of internally consistent and market consistent compensations systems for FORD

It is necessary for Ford to create a synergy and balance between business and internal considerations within the compensation system (Martocchio, 2013). Ford tends to get the most benefit from the rations of internally consistent compensation system. It defines the job evaluation and job analysis evaluation as key variables or rations for the creation of internally consistent job structures at Ford. Such compensation system at Ford gives the relative worth of each type of business amongst all other roles in Ford (Meyerowitz, 2000).

Evaluation of Ford's Pay Structure

The focus of Ford ...