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Compensation and Benefits

Details: After receiving a positive response from StopNShopNow, Inc. management about the recommendations for the incentives and performance appraisal projects, the HR generalist has been assigned a project that will prove to be very challenging: assessing the competitiveness of the company benefits package.

The owners of StopNShopNow, Inc. are very concerned about the escalation of health insurance costs. When they started the business in 1991, benefit costs were much less and employees were happier with what the company provided. Now, however, the owners regularly hear employee complaints about the growing health insurance premiums they pay.

In addition, the owners are tired of employees always requesting that they be allowed to take a greater number of paid personal absence days. Scheduling employee vacations and holidays is difficult due to the fact that the company's store locations are open all day, every day, except Christmas and New Year's Day. As a result, the owners want to compare StopNShopNow, Inc.'s benefits package with other similar companies. They intend to use these facts to make better decisions and communicate their problems more accurately to employees.

As the HR generalist, you quickly realize that the corporation had never quantified the total costs of benefits. After 1 month of exhaustive review of benefits bills and payroll records, you have summarized the corporate compensation and benefits costs as seen in the following:

Percent of Total Compensation:

total wages and salaries: 75%
total benefits costs: 25%
paid leave: 5%
supplemental leave: 2%
insurance: 6%
retirement and savings: 2%
legally required benefits: 10%
other benefits: 0%
With this information, you will now attempt an external benefits comparison. To get benefits data from other companies, review the following data from the United States Department of Labor Bureau of Labor Statistics. Some of the most pertinent survey results are in Appendix A.

Click here to view the United States Department of Labor Bureau of Labor Statistics 2005 data.

Click here to view the United States Department of Labor Bureau of Labor Statistics 1986 - 2001 data.

Prepare a comparison of the compensation and benefits costs that you will deliver to the company's owners. Create at least one chart to visually depict the most relevant data. Address the issues of greatest concern to the owners. Provide several paragraphs to summarize your findings. Use Appendix A or additional data provided in the United States Department of Labor Bureau of Labor Statistics documents.

Please submit your assignment.

Objective: Describe the components of employee benefit programs.

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The response addresses the queries posted in 762 words with references.

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The response addresses the queries posted in 762 words with references.

//Before writing about the comparison and contrasting of Compensation and Reward system provided by the Company, it is necessary to know about the key components involved in Compensation and Reward system, which further will help in analyzing differences and similarities between them, in an effective manner.//

Compensation and reward system determines the mechanism and form for giving financial and non financial rewards, fringe benefits, hours and working conditions. A general compensation plan of most of the companies includes several benefits like wages and salaries, paid leaves, supplemental leaves, health and life insurance, retirement and savings, legal benefits and some other benefits (Mamoria & Gankar, 2002). All the companies determine a fix compensation plan for their employees.

StopNShopNow Inc. Is also providing a good compensation policy to its employees. It is providing 75% wages and salaries. According to the data of year 2005 of the United States Department of Labor, this amount of salary is quite better than the given amount for the private companies I.e. 70.8% (Employer Costs for Employee Compensation-December 2005, 2006). Except ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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