HR Consultant Proposal: Two-Part Assignment consisting of both PowerPoint and Essay Summary Report
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Compensation and Benefits Strategy
Compensation and Benefits Strategy
Andrea Markiewicz
HRM/531
June 26, 2017
Patrick Stapleton
Compensation and Benefits Strategy
A compensation plan of an organization consists of components that determine what the employees of a company will receive regarding the salaries, benefits, and bonuses. This type of plan is a crucial element that substantially determines whether the employees of an organization work and carry out their duties with motivation and happiness, or without work morale. It is therefore important to carefully construct a compensation plan that motivates workers as they carry out their daily responsibilities (Liccione, 2007).
Trends Shaping Total Rewards For Employees Supply and demand can impact what we pay for everything. When it comes to compensation, there are additional factors at play. These factors are the cost of living, economy, society, and culture. Trends of payment change so rapidly and it can be challenging to keep up. Businesses can risk losing their competitive edge out in the market (Hai-Ming & Hsieh, 2006). The Starbucks company should devise a compensation plan capable of implementing without struggling financially. It should, therefore, put into consideration the amount of capital they make and the amount they will allocate to cover the employee hourly pay, salaries, bonuses and other incentives. Another factor is the compensation from emerging global markets. Starbucks coffee is not operating on its own, and as a result, it faces competition from other organizations. Therefore, the way an organization devises a compensation and benefits strategy should match or outdo those of the competitors. If it does not match those of the competing teams, then it faces the risk of losing its labor workforce. Technology and globalization are other determinants that shape how an organization is going to create a compensation plan and benefits strategy (Zhang & Smith, 2010). Current Compensation Plan At Starbucks Starbuck’s compensation plan for their associates includes a comprehensive benefits package. Their plan for wellness and health insurance consists of medical, dental, accidental death & dismemberment, life insurance, disability insurance, health savings account, mental health care, employee assistance program, etc. Their plan for financial and retirement consists of 401K, employee stock purchase, pension, stock options, etc. Their plan for family and parenting consists of adoption assistance, maternity and paternity leave, family medical leave, etc. For their lifestyle vacation and time-off plans, they include bereavement leave, paid holidays, vacation and paid-time-off, etc. For the plan on employee discounts and perks, they consist of company social events, free lunch or snacks, mobile phone discount, etc. And of their workplace professional support, their plan includes tuition assistance, job training, professional development, etc. (“Starbucks Benefits,” 2008-2017). Levels Of Responsibility And Compensation Compensation can get done by the standard of trust the employee plays in the Starbucks organization when it comes to their franchise store locations. The levels may get categorized as intermediate, senior and supervisory. The amount of compensation will, therefore, differ from one category to the other. The table below shows an example, and it uses only the salary component of the compensation plan (“Average Salary for Starbucks Corporation Employees,” 2017). Note that the figures are an estimate.| Position | Salary Range |
| Intermediate (Barista) | $14,000-$27,000 |
| Senior (Store Manager) | $40,000-$55,000 |
| Supervisory (Retail Store Manager) | $41,000-$56,000 |
Market Data, Job Data, And Organizational Data These three categories are significant when developing a successful compensation and benefits plan strategy. Market data is imperative when it comes to the recruitment of new team members and the estimation of set-off expenses. Through researching Starbucks market data, they have discovered that the population today is striving to achieve better fitness and a healthy well-being. It is through this analysis that the company came up with the initiative of partnering with Whole Foods to sell their evolution harvest snack bars and juice along with trying to transform their retail store chains to a more product consumer when you have health-conscious customers that are diversifying (Derrick, 2013). Job data involves the records of all activities involved in production and sale of these health products. Organizational data covers the files of the company and its associates, both internally and externally. Starbucks deals with a vast range of coffee and health-conscious consumers, and therefore all the data needs to be carefully stored and managed to ensure survival in a competitive and globalized environment (Moore, 2006).
Starbucks Total Rewards Strategy Starbucks total rewards plan will comprise of three revised categories; original programs, performance-based programs and career and environmental programs. Performance-based programs are meant to enable employees to achieve maximum productivity at workplaces while the career and environmental programs help the employees in developing and managing their careers and understanding their work environment. The three categories that will be used to devise this plan will a positive impact on the organization. It will acknowledge the efforts employees put as their carry out their activities that lead to the success of the team. It will also ensure performance management by determining what the team expects from the employees, assess employee actions and devise means of improving them. With extending Starbucks comprehensive benefits plan that they currently have, this will help lead to employee retention and higher performance. Starbucks Compensation Components Plan The payment plan for the Starbucks organization is going to cover three main areas; compensation, development and work-life balance and recognition. The compensation part will add on new merit pay for employees. The development section will add new mentorship and coaching programs. And for the work-life balance and recognition part, will add on new compressed hours for employees and job sharing.
| Compensation | Merit Pay (New) |
| Development | Mentorship and Coaching Programs (New) |
| Work-Life Balance and Recognition | Compressed Hours and Job Sharing (New) |
Legislation On Compensation And Benefits There are laws which affect how compensation plans and benefits decisions are going to get made. Employee Retirement Income Security Act (ERISA) is accountable for regulating how organizations pay out retirement perks for employees (“Employee Retirement Income Security Act (ERISA),” n.d.). The Fair Labor Standards Act (FLSA) establish standards for wages and overtime costs. This law requires that organizations pay employees one-and-half-times the basic allowance in remuneration of overtime funds and considers the minimum wage limit (“Compliance Assistance-Wages and the Fair Labor Standards Act (FLSA),” n.d.).
Conclusion
Compensation and benefit plans that are well structured enable an organization to remain relevant in a globalized and competitive workplace environment by ensuring high morale among the workforce and productivity. A team should always prioritize a compensation plan and benefits strategy to ensure a company observes the law, retain and motivates a labor force, and operate at reasonable costs.
References
Average Salary for Starbucks Corporation Employees. (2017). PayScale Human Capital. Retrieved from http://www.payscale.com/research/US/Employer=Starbucks_Corporation/Salary
Compliance Assistance-Wages and the Fair Labor Standards Act (FLSA). (n.d.). United States Department of Labor. Retrieved from https://www.dol.gov/whd/flsa/
Derrick, J. (2013). Whole Foods Market: Expansion, Starbucks Partnership, and a Stockpile of Cash. The Motley Fool. Aol.com Retrieved from https://www.aol.com/article/2013/10/14/whole-foods-expansion-starbucks-partnership-and-st/20744713/
Employee Retirement Income Security Act (ERISA). (n.d.). United States Department of Labor. Retrieved from https://www.dol.gov/general/topic/retirement/erisa
Hai-Ming, C., & Yi-Hua Hsieh. (2006). Key Trends of the Total Reward System in the 21st Century. Compensation and Benefits Review, 38(6), 64-70,5. Retrieved from http://search.proquest.com.contentproxy.phoenix.edu/docview/213693194/4C75D31E22AB4FF4PQ/3?accountid=35812
Liccione, W. J. (2007). A Framework For Compensation Plans With Incentive Value. Performance Improvement, 46(2), 16-21. Retrieved from http://search.proquest.com.contentproxy.phoenix.edu/docview/237233321/EC077CF6409B46E9PQ/6?accountid=35812
Moore, J. (2006). Tribal Knowledge. Lessons Learned from Working Inside Starbucks. Dearborn Trade. A Kaplan Professional Company. (pp.1-251). Retrieved from http://ebookcentral.proquest.com.contentproxy.phoenix.edu/lib/apollolib/reader.action?docID=3016175
Starbucks Benefits. (2008-2017). Glassdoor Inc. Retrieved from https://www.glassdoor.com/Benefits/Starbucks-US-Benefits-EI_IE2202.0,9_IL.10,12_IN1.htm
Zhang, H., & Smith, M. (2010). Exposure TO Global Markets, Internal Labour Markets, And Worker Compensation: Evidence From Canadian Microdata. Canadian Journal of Sociology (Online), 35(3), 371-398. Retrieved from http://search.proquest.com.contentproxy.phoenix.edu/docview/759646337/EB7D6FEDC3304162PQ/8?accountid=35812
Which of the following is, according to you, the most useful bonus package?
A Thank You Note
Employee of the Month
Gift Cards
Compensation
Give a reason behind the reward package selected.
Suppose the initial compensation package is not successful, what would be your second-choice award?
Catalog Program
Lottery Tickets
Appreciation Jar
Website Recognition
In the case of catalog programming as the compensation and reward package, suggest a program of determining the need for reward.
Thank You for Your Participation.
