Unemployment Paper – Employers realize that keeping good employees

Columbia Southern University Unemployment Paper

Employers realize that keeping good employees is a challenge. Even in an economy of high unemployment, there is still attrition. The knowledge workers carry their expertise with them. They can relocate anywhere, they love to learn, and they know that the more they share knowledge, the more they learn; knowledge is the means of their production. Due to technological advances, competition for talent is on a global scale. The cost of recruiting, selecting, training, appraising, and developing employees has become a huge investment that now drives the demand for retention and engagement tactics to be incorporated into compensation strategies (Drucker, 1999). There is a lot of pressure for an organization to get their compensation strategy right; therefore, let’s start the unit with a brief review of the basics of today’s compensation.

The two main components of compensation are direct and indirect financial payments. A time-based direct financial payment is hourly or daily wages paid to production or clerical workers. Managers are salaried and are paid annually, monthly, biweekly, or weekly. The other direct payment options can be performance-based pay, piece-rate pay for production workers, or commission-based pay on sales or bonuses. Indirect financial payments consist of noncash benefits, such as insurance and vacation paid by the employer (Milkovich et al., 2014).

As with all strategic plans, compensation rewards must be aligned with the organization’s strategic aspirations. Give the employees the compensation necessary for them to use their knowledge, skills, and attitudes to excel in their opportunities and to achieve corporate goals. If an element of inequitable compensation is in the air, the imbalance affects the employees. The 2016 Compensation Best Practices Report tells us that 73% of employers believe that they pay their workers fairly, while only 36% of employees agree (as cited in Miller, 2016a). It is critical to design structures that reward aptitude and results, and it is even more essential to effectively communicate the solid compensation philosophy to all employees— especially to those employees who may perceive there to be inequality in relation to their associates, industry peers, or even the tycoons in the executive C-suite who are shoveling in the money (Miller, 2016a).

Simply sharing the compensation philosophy and educating employees on procedures establishes open communication. For instance, explaining the data sets used to benchmark positions; explaining how you know the data is current; defining salary structures, such as ranges and grades; and explaining where employees are among those ranges are all helpful tactics. Approximately 82% of employees disclosed in the survey that they would be satisfied, even if their pay was below market value, if their employer provided open and direct communication when presenting the reasons. Employers need to provide management with the tools to have these conversations or enlist the human resources community in providing information sessions in the workforce; each session will prove to be a successful, powerful, trust-building engagement tool (Miller, 2016a).

Reading for this week are in the study guide.

Instructions

For this assignment, write an essay explaining your new compensation strategy for the mid-level manager position you still need to fill. Your audience is the chief executive officer (CEO) and other supervisors in your organization. In this essay, include the items listed below.

• After a brief introduction, explain how equal employment opportunity laws impact the organization’s compensation strategy.
• Compare and contrast the advantages and disadvantages of pay-for-performance and competency-based pay. What strategy would you recommend for your organization, and why?
• Explain how various motivational theories can factor into your development of a multi-generational compensation package for your whole organization that includes indirect benefits. Be sure to give specific examples of how different generations of applicants or employees will be affected.
• Explain your proposed compensation package, which should include direct and indirect benefits and how the package will affect hiring and retention. Be sure to specifically identify how much you will pay the mid-level managers, and indicate how it compares to your state and the federal minimum wage. You can search the Internet for sites that list comparable pay data. You should identify a low, medium, and high pay range for the mid-level manager.
• Explain how you will assess the effectiveness of the compensation strategy a year from now.

Your essay will contain a one-page appendix in which you will create a chart of your compensation strategy. This chart should have three columns, which should address the areas listed below:

• legally mandated benefits,
• direct benefits (include how much you will pay the mid-level managers), and
• indirect benefits.