Compensation Practice Essay
This paper was developed under the scenario of choosing the name of a publicly traded company for that would be interesting for an employee to work and then analyzing and explaining the company, its compensation strategy, best practices the company is applying, and compensation-related challenges the company is facing. The paper will also analyze how the company applies compensation practice to determine the positive or negative impact to the company and its stakeholders; and the ways in which laws, labor unions, and market factors impact the company???s compensation practices.The company chosen was Chic-fil-a.
Analysis of how Compensation Practice can be Applied to Positively Impact an Organization and its Stakeholders Compensation is practice at every organization but every organization compensations practices are different. As an organization you would want you employees taken care of and have competitive compensations to compete against other organizations and its employees. Some examples of compensation are good benefit packages, vacation time, sick time, bonuses, pay increases and continuous training etc.Good compensation make employees want to progress within the company and have job security, to have longevity with the organization. Happy employee equals success as a whole for the organization, you have boosted moral and have employees investing money into the company stocks and which also can lead to third party companies or individuals investing in particularly Chic-fil-a stock. One thing that stands out the most to me about Chic-fil-a is that they offer a modified schedule choices to help employees have a somewhat of a stress free work environment with flexible shift hours during a standard workweek.
Examination of Ways in Which Laws, Labor Unions, and Market Factors Impact Companies??? Compensation Practices Laws that impact companies compensation practices are laws that deal with wages, employment levels, and Union Dues. Laws can have an negative impact or positive impact with either leading to higher wages and creating more jobs or lowering wages and hurting people???s standard of living. If wages increase then people will spend more money with comfortability if wages decrease then people will not spend money and hold on to every penny just like we were a couple years ago after the market crashed.Labor Unions have an effect on the wages paid to union employees and non-union employees in an economy.
According to Employees and Right to Work Laws: Wages while they increase the wages of the union workers they decrease the wages of the non-union workers. When this happens then compensation like bonuses and pay increases are decreased in the non-union workforce. The market not only have effect on compensation practices it can affect an organization as a whole.According to a management study the demand for a particular skill affects the way the employer fixes the compensation for the employee, because the more technologically advance we become as a nation the demand for people to work on these products increase as well. The position of the company in the Business Cycle determines how much the company is willing to offer to the employee.
Urgency of the organization in filling up the positions is an important role in determining how much the employer is willing to pay the employee. to support your discussion.Evaluation of Effectiveness of Traditional Bases for Seniority and Merit Pay Against Incentive-Based and Person-Focused Compensation Approaches Seniority pay is the type of pay that rewards employees with increases in base pay according to the longevity the employee have with the company, it also reward employees for acquiring and refining their skill. It is studied that employees become more valuable with time and may pick up and leave the organization if the individual feel that their pay won???t increase progressively over time.
Now Seniority usually goes hand and hand with government jobs which pay increase is automatic, for example when I served in the Navy for 4 years seniority played a big part and our pay increase was every year but was equal for all ranks, regardless of seniority. Merit pay is the compensation over time should be determined by differences in job performance, it is said to reward excellent performance, motivation for future employees and help retain valued employees. ???Meeting standards result in pay raise???.The Merit pay system is what???s used within Chic-fil-a, bonuses, extra vacation days, and pay raises are given to Chic-fil-a mployees. Incentive based and focused-person compensation is believed to be the key to continued growth within an organization.
15%-35% incentives are cash based meaning companies give their lead executives bonuses or commission checks. Chic-fil-a is notorious for this. If you franchise a Chic-fil-a you will get a commission check every 6 months and bonus check every year just for being part of the Chic-fil-a franchise, added to that you can???t have any other business ventures and is 100% dedicated to Chic-fil-a.Referenceshttp://www.glassdoor.com/Reviews/Chick-fil-A-Reviews-E5873.htmhttp://www.managementstudyguide.com/factors-affecting-compensation.htm