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Creating a Compensation Philosophy

For an organization to implement an effective compensation and benefits policy, it is helpful to look at both the needs of the company and the individual, from both a practical and ethical perspective. Within this context is the legal and regulatory framework that guides the standards of HR policy.

Through this assessment, you will get an opportunity to establish the groundwork for studying compensation and benefits policy development. You will review labor laws that were referenced in your other human resource courses, and you will take a more focused look at the laws more relevant to wages and benefits. You will also look at the basic elements of any pay system.

Consider the ethical issues that influence compensation policy and how they may or may not harmonize with personal, corporate, and societal values. Also, think about the fundamental relationship an individual has with a company and how the contract for work and reward may represent a deeper contract between the employee, the employer, and the society in which the business is conducted.

Imagine you are the HR manager for a new company just opening its doors in your community. The CEO has asked you to prepare the initial guiding principles you will use to define the company’s compensation philosophy regarding how the company compensates its employees.

Complete the following:

  • Describe the type of business, the number and types of employees (exempt and non-exempt), and the customer base you will use as your example company for this assessment, as well as the state and city or area of the state where your company is located.
  • Describe the factors will be used to determine salary decisions (for example, appropriate qualifications, contributions, performance, and budget considerations).
    • Discuss where the company wants to fit regarding compensation in the industry and related market. Bottom quartile? Industry average? Top quartile?
    • Discuss whether the company will reward top performers with incentive pay.
  • Discuss the role benefits (health, 401(k), et cetera) will play in the overall compensation package. Does the company want the benefits plan to be below market, at market, or above market? Why?
  • Describe how other existing businesses in your community affect the guiding principles for your compensation guidelines. You can reference the “Overview of BLS Wage Data by Area and Occupation” from the Bureau of Labor Statistics to help you research information for your response.

Additional Requirements

Your assessment should also meet the following requirements:

  • Written communication: Written communication is free of errors that detract from the overall message.
  • Formatting: One-inch margins, appropriate headers, and a title page.
  • Length: 1–2 double-spaced pages.
  • Font and font size: Times New Roman, 12 point.

Important: You will use this same company as the focus for the upcoming assessments in this course as well.

SWOT Analysis

Choose an organization on which to complete a strengths, weaknesses, opportunities, and threats (SWOT) analysis. Ideally, the company you choose will be a familiar one and one to which you have easy access, such as your place of employment or a company close to where you live. You may use the same organization for other assessments in this course. Think of yourself as an outside consultant hired to research, assess, formulate, recommend, and evaluate your selected organization.

It is important to remember that opportunities and threats are external to an organization, and strengths and weaknesses are internal to an organization

Complete the following:

  1. First, identify and describe what you consider to be your chosen organization’s internal strengths and weaknesses. Examples of internal factors include employees, management, and finance. Use the terms “Strengths” and “Weaknesses” as titles. Then, list three or more factors under each title and describe them.
  2. Second, identify and describe what you consider to be the organization’s external opportunities and threats. Opportunities and threats may include a variety of factors, such as economics, technology, demographics, environmental considerations, culture, competition, and political influences. Use the terms “Opportunities” and “Threats” as titles. Then, list three or more factors under each title and describe them.
  3.  

Be sure to botBy successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

  • Competency 3: Apply a sequential process for developing and implementing strategies, goals, objectives, and tactics as part of the strategic plan implementation.
    • Describe internal strengths of the selected organization.
    • Describe internal weaknesses of the selected organization.
    • Describe external opportunities of the selected organization.
    • Describe external threats of the selected organization.h identify and describe the strengths, weaknesses, opportunities, and threats of your chosen organization.

Strategic Action Plan

Develop a strategic action plan for yourself.

Introduction

The final step in developing your strategic plan is to translate your strategy into action. A robust action plan contains four elements:

  • Identification of specific actions to be undertaken in the next year or less.
  • Establishment of a clear time frame for the completion of each action.
  • Creation of accountability by identifying who is responsible for each action.
  • Determination of one or more specific, immediate objectives that the action should achieve.

Functional tactics and monetary ramifications are the underlying details of your strategic action plan. Functional tactics are short-term, narrow-scoped plans that detail the activities you will use to achieve your short-term objectives. The monetary ramifications of your strategic plan will likely be expressed in both income and expenses, for example, the amount of increased income anticipated by climbing the corporate ladder and the amount of money you may need to spend on education or professional development.

Note: Developing a strategic plan requires specific steps that need to be executed in a sequence. The assessments in this course are presented in order and should be completed in sequence.

In the previous assessments, you have developed your mission statement, conducted a personal SWOT analysis and environmental scan, and laid out your long-term and short-term objectives. Now, you will create a strategic plan to achieve your objectives.

Your completed Strategic Action Plan will be based on the information from your mission statement, your SWOT analysis, environmental scan, and your long-term and short-term plans; however, you do not need to include these items in this assessment.

Develop a strategic action plan in which you address the following:

  • Specific steps you will need to take in the next year to achieve your 5-year objectives.
  • A time frame for completing each action.
  • The scorecard you will use to measure the success of each action.
  • The functional tactics you will use to achieve your short-term objectives.
  • The resources (financial, human, and other) you will use to complete each action.
  • An analysis of the monetary ramifications of each action.
  • A plan for monitoring the progress of the action plan.
  • A plan for handling obstacles or roadblocks.
  • An explanation of how your overall strategic plan reflects your mission statement.

To successfully complete this assessment, you may need to do some research on strategic action plans. Format this assessment as a research paper following current APA guidelines for both style and citing sources, making sure that you also use correct grammar and mechanics. There is no required minimum or maximum page length; however, you should strive to be as detailed as possible in addressing each bullet point, while also being as clear and concise as possible.

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies:

  • Competency 1: Create organizational value.
    • Explain how a strategic plan reflects a mission statement.
  • Competency 2: Participate collaboratively and respectfully.
    • Describe the resources needed to complete the steps of a strategic plan.
  • Competency 3: Communicate effectively.
    • Explain how to measure the success of the steps needed to achieve long-term objectives.
    • Write coherently to support a central idea in appropriate format with correct grammar, usage, and mechanics.
  • Competency 4: Plan strategically.
    • Describe functional tactics used to achieve short-term objectives.
    • Describe a plan for monitoring the progress of a strategic plan.
    • Explain strategies for addressing roadblocks and obstacles to a strategic plan.
  • Competency 5: Employ high-performance business management techniques.
    • Describe the steps and associated time frames needed to achieve long-term objectives.
  • Competency 7: Use appropriate financial models and principles.
    • Explain the financial ramifications associated with a strategic plan.