Human Resource Management Compensation. Essay - 1,527 words

Human Resource Management Compensation. The employee is offered a competitive compensation program. The program includes a detailed compensation package, incentive plan and the benefits plan. The compensation package describes in details the financial compensations to enhance the activity of the employee and provide the normal living standards. The incentive plan is directed to encourage additional performance of the applicant to proposed post in the way of various initiatives etc. The incentive plan is not aimed directly to the profit sharing by the employee.


Recent events in the USA, the Enron scandal showed that the profit sharing is not the best way to encourage the employees performance. The scandal showed that the share award became one of the reasons of the Enrons fall. The management of the company used that tool to encourage the employees presenting such HR policy as a revolutionary approach. The result of such approach was that the employees started chasing their income at a stock exchange and got involved into insider trading, the disgracing phenomenon that was one of the reasons of the Enrons fall. The profit sharing should be the additional benefit but not the main one as it was presented by the management of Enron. The case of Enron showed that such benefit as the employees direct participation in the profit sharing may cause fatal consequences even for such a huge corporation as Enron. 1.Compensation Package. The following compensation package is offered that is going in line with the HR strategy of the corporation Financial Compensation.1 Fixed Pay. Fixed pay is the part of financial compensation that does not depend upon the companys or the employees performance.


Base Pay. Base pay is the payment in the form of the salary that is a part of a fixed pay. The salary will be $300 per week. The salary will be negotiated finally during the personal interview. The salary is the fixed payment and may be changed in the following cases. When the employee changes the job responsibilities he may get the promotion payment. Thus if the employee is promoted to the high post he needs the increase of the salary. The salary will be increased in this case at least 5 per cent or the employee will get the salary no less than the average salary of the new group post no matter how higher it is but not less than 5% higher than at his previous position.


Pay For Performance. An employee may get the changes in the base pay according to the results of his duty. The performance of his base duty is paid extra when it increases the expectations of the management of the company. This Pay for Performance may include the Merit Increase. If employee shows the increase of the job performance and productivity that is higher than hat expected by the administration he may get the merit increase. To receive the merit increase the employee must have been employed in the company for 1 year at least.


An employee may get a lump sum payment. Such payment may be granted disregarding the term of employment. The amount of such payment is defined by the management of the company. Salary Reduction. The salary may be reduced as a consequence of the poor performance. Such reduction is defined by the management of the company.


The level of the reduced salary should not be lower than that of the minimum in the same job group. The salary may be restored any time on improvement of the employees performance. Differential Payment. The Differential Payment is a part of a compensation payment. It is paid for the specific working conditions different from the standard ones assuming that the base working week is 40 hours. Overtime activity is paid at a rate 1.5 per hour comparing with the standard working time. The payment rate at the days off is 2 per hour comparing to the standard rate (40 hour working week).


Longevity Payment. The employees are eligible to receive the longevity payment depending upon the years of service for a company. The longevity payment is calculated according to the following table: Years of service for a company Longevity rate monthly. Less than five years 0% More than five years and less than eight years 20% More than eight years and less than 15 years 40% Fifteen years and more 80% These longevity rates are applicable disregarding the initial or current position of an employee and are calculated taking the current salary as a basis. Variable Payments. Variable payments are paid depending on the extra performance of the employee.. The variable payment may not increase 15% of the salary.


The variable payment is the subject of the managements competence and i ...................................................................................................................................................................................................................................................................................................................................................................

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Essay Tags: employee, human resource management, payment, incentive plan, salary

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