COMPENSATION AND BENEFITS

Compensation and Benefits for Employees



Compensation and Benefits for Employees

Introduction

The recent recessionary spell has caused all industries from services to goods manufacturing to redesign their compensations and benefits packages; so as to adopt a more beneficial Human Resource Management strategy. The HR professionals have to rethink the long-term and short-term compensation programs. The present day business markets have become very challenging in terms of internal and external risks. Therefore, in order to cope with the challenges and strategically manage the company in such a way that it cannot employ but retain quality human resource cleverly designed compensation packages required (Solmon & Podgursky, 2011).

The compensation plans that are increasingly employed by all organizations regardless of their industry are characteristically aligned with the shareholder objectives, profitability targets, and cost constraints, while concurrently, supporting employee development and retention. Therefore, companies like Savannah Engineering, Inspection, and Insurance Company (SEIIC) need to reconsider tailoring their compensation plans by keep in account the key employee i.e. technical and engineering personnel.

The industry in which SEIIC operates requires highly competent professional, who have always been in a demand and scarce supply in comparison. Following the suit of the rapidly progressing companies, SEIIC needs to design its compensation and benefits plan on the basis of division of personnel into executives, revenue supporters, revenue producers, and non-revenue producers.

Discussion

All businesses have undergone structural changes, which have impacted the compensation. The global economic crisis has incurred losses across all business industries. There has been de-leveraging in the balance sheets and shifts, in risk tolerance, which resulted in an amendment of returns target anticipated by all stakeholders. The regulatory controls and public perception have also contributed to changes in compensation approaches, models, and strategies.

A realignment of the overall value proposition of employees is required, especially with the long-and short-term expectations for change in the bonus payouts, in the specialized industries. The return to high compensation levels of the revenue generating employee segments might take years. On the other hand, in particular for the non-revenue generating employee segments the compensation levels need to be altered permanently. This will bring about a change in the current approach employed by SEIIC for attracting, retention, and motivation of employees (Ebert, et al., 2008).

An increase in the adoption of performance based compensation and benefits provision strategies has been witnessed. SEIIC is facing the challenge of adequately manage the costs benefits and healthcare plans for employees as they are ever on the rise. Alongside that, the company's HR team has to design and adopt policies that are in accordance with the increased government regulations. Furthermore, the company has to bear the costs of retirement plans, which include fee transparency and fiduciary responsibility that are the important concern for HR personnel.

The recent compensation trends include a focus on the performance based compensation plans and merit based promotions, along with additional incentives for top performers. Meanwhile, the current benefit trends include coverage of healthcare cost, insurance, employees old age benefit fund, provident fund, along with several other small ...