In response to your classmates, contrast and compare pay structures and the impact of these structures on employee motivation, engagement, and retention. What insights have you gained from this analys

In response to your classmates, contrast and compare pay structures and the impact of these structures on employee motivation, engagement, and retention. What insights have you gained from this analysis? Provide supportive workplace examples and cited information from your research and module resources.

Post #1

Patrick Sheehan

Hello all!

I think that when it comes time to create or revise a compensation plan, it is a good idea to know who your competition is. This not only pertains to business competition (such as selling a similar product), but you also need to consider the types of employees that are being drawn to various companies or industries. Let’s take for instance, Apple as they are looking to hire employees for their workforce. Of course, they will need to be aware of and understand the potential pay structures for some of their direct competitors in the mobile technology and computer industry. Firms like HP, Dell and Samsung. These are just a few examples of direct competitors the sell similar products and services that Apple does. Knowledge of what their pay structures are for jobs such as engineers, software developers and salespeople would be beneficial to Apple so that they can keep their compensation packages competitive and still attract the best talent possible.

However, employees with the knowledge and skills of engineers, developers and salespeople span much further than just the smartphone and computing industry. Since the world has become so technologically advanced, these are now skills and talents that are needed across many varying industries and organizations. Therefore, in order to remain competitive, a company such as Apple will need to compile benchmarking data for a wide variety of other organizations with similar positions. This benchmarking will allow Apple to compare its own current practices and procedures to those of its competition (Noe, Hollenbeck, Gerhart, & Wright, 2019). This market data will in turn be invaluable for making proper compensation decisions.

There are several consequences that an organization could be at risk for by having compensation structures that are out of line when compared to its competitors. Most obviously would be if an organization has a compensation package that is far below its competitors and it is not balanced out by some other form of benefit, then it will not attract the top talent and there will be increased difficulty in hiring proficient people to fill the job openings. Unfortunately, many companies seem to fall into this trap and it is becoming more and more difficult to hire the best talent and top people because these organizations have not adapted their approach to outlining compensation as the talent market has so rapidly changed (Low, 2015). One major factor that contributes to this need for organizations to properly adjust to the changing market place is the mass availability of information to job candidates in todays environment thanks to social media, job networks and online compensation services (Low, 2015). This transparency makes it easy for a job candidate to see if they are getting a fair deal or if they should look elsewhere.

This transparency is not only something that will affect job seekers and whether they want to work for your organization, but it can have internal affects as well. If there are current employees that are finding out there is the potential for higher pay with greater benefits somewhere else, it can make for retaining your best employees very difficult. This will then have a trickle-down effect which can lower morale and decrease engagement and efficiency.

One of the issues of greatest importance that I feel must be present in the workplace to improve motivation and engagement is communication. Management needs to be in communication with employees in order to build trust and make them feel as though their voices are heard. I think that pay structures and rate ranges need to be evaluated and recalculated versus competitors every so often in order to make sure that your organization is not falling too out of line with the marketplace. Additionally, some research needs to be done internally as to the various jobs that are being done. Job evaluations need to be performed and reviewed with the employees to ensure their understanding.

Finally, in order to improve morale and motivation, the compensation structure can be reviewed for opportunities to add incentive rewards based off of production as well as other fringe benefits that can improves the employee’s work-life balance. These of course must be carefully weighed to determine their cost/benefit ratio to the organization. In the end, research has shown that companies who have a more structured leadership and management setup, ultimately pay their employees more fairly and also perform better (Bloom, Ohlmacher, Tello-Trillo, & Wallskog, 2019). It starts at the top and by properly preparing, researching and developing a plan, organizations can better position themselves with a competitive advantage.

References

Bloom, N., Ohlmacher, S., Tello-Trillo, C., & Wallskog, M. (2019, March 06). Research: Better-Managed Companies Pay Employees More Equally. Harvard Business Review.

Low, T. (2015, February 15). Why It's So Hard to Figure Out What to Pay Top Talent. Harvard Business Review.

Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2019). Human Resource Management: Gaining a Competitive Advantage. New York: McGraw Hill Education.

Post #2

Angela McMahon

One of the most utilized ways for organizations to find out if they are competitive within their market is to do a market compensation analysis for each position, they are having difficulty with turnover. This gives the organization and idea of how competitive they are and if they need to increase starting wages or benefits. It would not be suggested to ask for a wage increase unless an employee has accurate statistics and data to substantiate his or her worth based on market data. An employee could also look at companies that have the same or similar numbers of employees to compare the salaries of those working elsewhere. An employee can also make use of their network by reaching out to those they know and those in their extended network by writing a brief note describing the profile of the people’s salaries the employee is targeting forward them (web, 2019). In some organizations raises are not often afforded so this type of information is sometimes the only way for an employee to get a raise. Organizations often benchmark themselves meaning they compare their practices against those with similar environments. In compensation management, benchmarking against the product market and labor market competitors is typically accomplished using one or more pay surveys, which provide information on going rates of pay among competing organizations (Noe, 2017).

In my current position I personally have not made compensation comparisons however, I know that our HR department has. We are trying to solve for 48% turn over in our entry level positions, we found we were at the top of the scale. This identified that it had something to do with internal issues and attracting good talent is a challenge for us because we are a young Medicaid MCO so many people do not know who we are and are skeptical. Personally I do not take our benefits, however it is one of the most comprehensive benefits packages I have seen and the compensation is toward the top for my position as when I pull a Glassdoor comparison I am the top of the chart for this area.

One consequence of having a pay structure that is out of line relative to those of one’s competitors based on internal perspectives is that the company may put itself out competition for sourcing new talent. When a skilled and professional job arena losing an employee could cost the company more than double their annual salary as part of the compensation package, training time and costs and loss of that employee's skillset and contribution to the company. There are many onboarding costs associated with bringing new hires on, such as new employee orientation, training, and mentoring, and helping new employees settle into their roles. When a company has a competitive salary, they are showing employees they care, ensure the business goal is being met by retaining more employees, and gives the employee a sense of value as opposed to being an expense.

Due to the ever-changing job markets and what each generation is seeking in a position it is important for an organization to stay up to date on current needs and wants of employees. Not only to attract good talent but also to keep good talent. Not only is that a recommendation but also allowing employees to have flexible work schedules and offering a competitive total compensation package. In todays times it is important to a lot of people to work from home on days they are feeling ill or have sick kids which helps both the employer and employee.

Noe, R. A. (2017). Human Resource Management: Gaining a Competitive Advantage. New York, NY: McGraw-Hill Irwin

https://www.themuse.com/advice/guide-compare-salaries-with-your-coworkers-and-network. (n.d.). Retrieved from https://www.themuse.com/advice/guide-compare-salaries-with-your-coworkers-and-network

One of the most utilized ways for organizations to find out if they are competitive within their market is to do a market compensation analysis for each position, they are having difficulty with turnover. This gives the organization and idea of how competitive they are and if they need to increase starting wages or benefits. It would not be suggested to ask for a wage increase unless an employee has accurate statistics and data to substantiate his or her worth based on market data. An employee could also look at companies that have the same or similar numbers of employees to compare the salaries of those working elsewhere. An employee can also make use of their network by reaching out to those they know and those in their extended network by writing a brief note describing the profile of the people’s salaries the employee is targeting forward them (web, 2019). In some organizations raises are not often afforded so this type of information is sometimes the only way for an employee to get a raise. Organizations often benchmark themselves meaning they compare their practices against those with similar environments. In compensation management, benchmarking against the product market and labor market competitors is typically accomplished using one or more pay surveys, which provide information on going rates of pay among competing organizations (Noe, 2017).

In my current position I personally have not made compensation comparisons however, I know that our HR department has. We are trying to solve for 48% turn over in our entry level positions, we found we were at the top of the scale. This identified that it had something to do with internal issues and attracting good talent is a challenge for us because we are a young Medicaid MCO so many people do not know who we are and are skeptical. Personally I do not take our benefits, however it is one of the most comprehensive benefits packages I have seen and the compensation is toward the top for my position as when I pull a Glassdoor comparison I am the top of the chart for this area.

One consequence of having a pay structure that is out of line relative to those of one’s competitors based on internal perspectives is that the company may put itself out competition for sourcing new talent. When a skilled and professional job arena losing an employee could cost the company more than double their annual salary as part of the compensation package, training time and costs and loss of that employee's skillset and contribution to the company. There are many onboarding costs associated with bringing new hires on, such as new employee orientation, training, and mentoring, and helping new employees settle into their roles. When a company has a competitive salary, they are showing employees they care, ensure the business goal is being met by retaining more employees, and gives the employee a sense of value as opposed to being an expense.

Due to the ever-changing job markets and what each generation is seeking in a position it is important for an organization to stay up to date on current needs and wants of employees. Not only to attract good talent but also to keep good talent. Not only is that a recommendation but also allowing employees to have flexible work schedules and offering a competitive total compensation package. In todays times it is important to a lot of people to work from home on days they are feeling ill or have sick kids which helps both the employer and employee.

Noe, R. A. (2017). Human Resource Management: Gaining a Competitive Advantage. New York, NY: McGraw-Hill Irwin

https://www.themuse.com/advice/guide-compare-salaries-with-your-coworkers-and-network. (n.d.). Retrieved from https://www.themuse.com/advice/guide-compare-salaries-with-your-coworkers-and-network