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Compensation and Bennefits at SEIIC

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.

SEIICâ??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 â??requiredâ? 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 companyâ??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:

â?¢Identify and explain at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort.

â?¢Identify and explain at least three trends or recent approaches in benefits that SEIIC should consider in its redesign effort.

â?¢Discuss the pros and cons to the trends/approaches identified in compensation.

â?¢Discuss the pros and cons to the trends/approaches identified in benefits.

â?¢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.

At least three pages and three sources.

Solution Preview

* Identify and explain at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort.

SEIIC is losing talent because they have failed to address the key issues of pay and benefits that their employees are frustrated about. The stagnant and across the board pay raises that has been consistent for years has ran its course and is no longer motivational nor effective. The standard package benefits they offer is also due for an overhaul to a more progressive and modern look that replicates forward thinking and progressive behavior. In order to move in this direction there are three key approaches that should be evaluated for implementation by SEIIC:

1) Variable Pay Distribution:

Under variable pay, SEIIC will realign its compensation budget to work in its favor by setting aside an increased amount of the money available for top performers bonuses and pay increases. This will motivate everyone that is serious about their jobs to step up their performance, reward the people who deserve it. These step changes in the compensation structure will be a win- win for SEIIC and the employs (Wilson, 2009).

2) Organizational goal sharing:

SEIIC needs to emphasize a flexible compensation system that will foster team growth in addition to the individual performer's reward. By setting objective and measurable annual targets, SEIIC will have the ability to offer a shared bonus across the organization of the same percent based on the total accomplishments of the entire team. This type of bonus structure is quickly becoming the new trend in employee rewards based on the benefit of the team dynamic that is in place (Wilson, 2009).

3) Employee gift program:

A new trend that has been catching momentum in industry is the use of random employee gift cards / rewards throughout the year. These types of "surprise" bonuses are small in price, but, have a long term positive psychological effect on the employee who had their work immediately noticed. SEIIC should utilize these rewards to help keep morale high throughout the year as opposed to waiting for one reward annually ...

Solution Summary

SEIIC is losing talent because they have failed to address the key issues of pay and benefits that their employees are frustrated about. The stagnant and across the board pay raises that has been consistent for years has ran its course and is no longer motivational nor effective. The standard package benefits they offer is also due for an overhaul to a more progressive and modern look that replicates forward thinking and progressive behavior. In order to move in this direction there are three key approaches that should be evaluated for implementation by SEIIC:

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