Compensation and Benefits Plan Executive SummaryDue to shrinking local labor market and increasing turnover within SMC Company, the board members of SMC will propose a comprehensive and progressive compensation and benefits plan to the CEO to increase retention in the Company. Traditionally SMC has paid only minimum wage and mandatory benefits. The following paper will propose the costs of the plan, external and internal equity, and creative methods of compensation and voluntary benefits for SMC.Cost Of PlanIn order to address the issues of retention at SMC, we must first look at cost: are we spending too much, or are we not spending enough in addressing the compensation and benefits ne ...view middle of the document...
Methods of CompensationEmployees must believe they have the ability and resources to meet the performance standards. For rewards to be motivating, employees have to believe they can earn them. If SMC was to implement one of the choices of incentive pay below the corporation could benefit from the satisfied workers and increased productivity. Incentive pay is a form of pay linked to an employee's performance.Types of Incentive Pay definitionPiecework rate A wage based on the amount workers produceDifferential piece rates Incentive pay, which the piece rates, is higher when a greater amount is produced.Merit pay A system of linking pay increases to ratings on performance appraisals.Gain sharing Group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.(Noe-hollenbeck, Gerhert, Wright, 2003, p. 376-395)Voluntary BenefitsIn a continued effort to make SMC the best place to work; SMC will begin offering an array of voluntary benefits. Listed below...
