Compensation and Benefit Strategy Research Paper

Compensation and Benefit Strategy - Research Paper Example On analyzing the human resource activities in the organization, it was transpired that the main reason why the employees quit their job is that the compensation and benefit packages paid to them are below average as compared to other organizations. Though many of the work positions in the company involve hazards, and people in various departments are putting in extra working hours, the management does not pay them proper compensation at parity with the nature of work. At the present stage, the company is unable to retain its loyal employees due to disparities and inadequacies in the pay structure and they have to sustain heavy expenses on recurring recruitments, which can be avoided if they evolve a proper pay structure that also recognizes high performance. Holland Enterprises is a prestigious company over the last 35 years, employing over 3500 people. In order to retain its image and to receive continued work support of employees with required experience, the company needs to revie w and rethink its compensation policies to sustain their business and profitability in a competitive environment. The management also has to recognize that, on the one hand, they are losing competent workforce for want of reasonable remuneration, while on the other hand, they are spending a lot of money to carry out recruitment. Considering the present circumstances and all the pros and cons of the issue, I have drafted a proposal for raising the compensation and planned certain benefit strategies for the employees, which are aimed to attract efficient workforce towards the company and help in retaining them in the organization in future. The proposal explores the basic components of the compensation and benefit strategy on factors such as compensation and benefit philosophy, pay structure architecture (pay grades, pay ranges, and pay width), ratio of base pay to incentive (bonus) pay, emphasizes on external equity or internal equity, principle type of benefits to include deferred c ompensation match, health insurance, vacation and sick leave, etc. Holland Enterprises has immense potential to increase their output if the organization can use the information contained in the proposal to appropriately raise the compensation of their employees and implement the benefit strategies. Compensation and Benefit Philosophy Employees are the most valuable assets in every organization and, therefore, their satisfaction and well being are very important. Fair and effective compensation system is an integral component in achieving employee satisfaction to help the company retain them for a longer period. Therefore, the management needs to ensure that an effective system of pay, which is at par with market competitive base pay programs as well as variable pay programs are prevalent in the company. There is no denial of the fact that â€Å"compensation and benefits affect the productivity and happiness of employees,† which in turn will enable the organization to â€Å" effectively realize its objectives† (Compensation & Benefits, n.d, par. 5). The management should consider that they are paying what they deserve. The principle of a good compensation philosophy is to attract and motivate efficient employees and to help in the retention of experienced employees who already know well all the specific requirements of the company and their job responsibilities. To achieve these objectives, the