Identify specific practices within the areas of compensation and benefits that would aid SEIIC in developing the kind of employees that it needs and for retaining its most valuable human capital.
SEIIC's compensation and benefits programs are based on traditional design principles typical of a company of its age and history. For example, almost all employees receive annual pay increases of two to five percent. This is frustrating to both managers and high performing employees. Managers would like to give better pay raises to high performers. However, budgets are only enough to cover the "required" raises to all employees; this leaves too little for more significant raises to high performers. Naturally, as a result, high performers who feel underpaid often seek other employment. The company's policies have tended to reward seniority rather than performance, and because of the job evaluation system, compensation is tightly compressed. Benefits are thought to be generous in that the company pays for most of the cost. However, the structure of the benefits is rigid and only includes such traditional benefits as health insurance, life insurance, retirement plan (defined benefit) and a 401(k) plan (defined contribution).
The company recognizes that things are changing in its business environment as well as relative to the needs of its people, especially now that so much of its business in world-wide. As part of the ongoing analysis of trends that should influence the redesign of HRM in the company, what are the relevant trends in compensation and benefits that the company should pay the most attention to? To answer this question, address the following:
Identify and explain at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort.
Identify and explain at least three trends or recent approaches in benefits that SEIIC should consider in its redesign effort.
Discuss the pros and cons to the trends/approaches identified in compensation.
Discuss the pros and cons to the trends/approaches identified in benefits.
Of all the trends/approaches you have discussed, which is the one that has the most merit for compensation and which one has the most merit for benefits? Justify your answer using examples and reasoning.
The solution addresses the factors involved in HR Benefits for SEIIC corporation.
Savannah Engineering: major trends in HR and how they could affect the SEIIC
Savannah Engineering, Inspection and Insurance Company (SEIIC) is one of America's oldest insurance companies specializing in equipment inspection and insurance for companies in the manufacturing, transportation, and energy sectors. Founded in 1873 and named for the first steam-powered ship to cross the Atlantic, SEIIC has grown to become a global leader in the application of engineering principles to safety and risk management. With more than 4,500 employees in 14 principal offices and 55 field locations around the world, SEIIC stands ready to meet industry needs on any continent.
More than 50% of the SEIIC employees have an engineering or technical background. Accordingly, college recruiting and training are major features of the HR program. Although SEIIC has been known as a great place to work, turnover/retention issues need constant attention in the highly competitive labor market for technical personnel. In the past, the company was also known for outstanding customer service and for building long-term relationships with its many business partners. However, this image has slipped in recent years as the company and market have undergone significant change in the post-9/11 world and the company has struggled to respond in effective ways. As a result, SEIIC has decided to undertake a complete updating of its human resources management practices. To accomplish this effort, the company wants to investigate emerging trends in HR and to identify best practices for major HR processes.
(1) Identify major trends that are likely to affect a company such as SEIIC.
(2) Provide insight in the following areas by identifying at least two significant issues or trends for each area:
o Economic and financial
o Legal and political
o Social and cultural
(3) Discuss how these trends will affect SEIIC. Be specific in linking the trends that you identify with specific areas of HRM (e.g., employment, managing diversity, training and development, performance management, compensation and benefits, health and safety, and international HRM) implications to the trends that you have identified.
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