Published: Thursday, 02 June 2016 07:43
Written by easyessaycase.com
Total Compensation Plan is aimed at discussing and identifying fringe benefits, salaries and wages for professional workers. It also caters for non-exempt service workers for various subcontractors. The Total compensation plan also complies with all legal requirements. It would include the paid vacation days, retirement contributions, and contributions for medical insurance. The development of total compensation plan depends on the state of economy (Kaplan & Atkinson, 2015). It should also meet all the employees’ requirements in order to help them focus on the job. The paper will discuss total compensation plan for Ford Motor Company, which is a competitor of General Motors Company.
The total compensation plan for Ford Motor Company should support the key objectives of the organization. In this respect, it should support sustainable business for the firm. The plan should also promote the employee retention. Similarly, the total compensation plan should support the firm objective of maintaining morale among its employees (Kaplan & Atkinson, 2015). On the other hand, the compensation plan should restrict turnover of employees. One of the key objectives of the organization is to design measures to retain its critical employees. In certain departments, a single employee has a huge impact on the success of the whole firm. However, the employee turnover for one individual may risk the firm’s success in the future. Therefore, a better compensation plan should be designed in order to retain top talents but limit the employee turnover. Measures should be put in place to prevent underpaying or overpaying of workers. In such cases, raise in salary should only be because of greater results. According to Kaplan & Atkinson, (2015) huge compensation does not act as a motivator or satisfier.. However, compensation acts as dissatisfier when an employee thinks he/she is underpaid (Kaplan & Atkinson, 2015).
The compensation should also cater for current issues and trends as well as prediction of future trends. The Ford Motor Company should reward top performers with better compensation plan in order to get the attention of poor performing staff. Therefore, a system that acknowledges better performers cannot reward all employees at the same rate. The total compensation plan should serve as a communication tool to all staffs about the achievement rewards and their goals and expectations (Kaplan & Atkinson, 2015). The total compensation plan should increase with productivity. Economic theory suggests that due to competition among employers, workers must be paid in terms of their productivity. If Ford Motor Company underpays its employees with regard to their productivity, they are forced to go to higher-paying competitors. On the contrary, if a firm pays more to employees than they do produce will lead to inadequate returns, which can result to bankruptcy in the future. The firm should therefore, track the productivity of its workers overtime in order to develop a compensation plan (Ghazanfar, Chuanmin, Khan, & Bashir, 2011).
Read more ...