Evaluate at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort, including the pros and cons of each.
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, and a 401(k) plan.
The company recognizes that things are changing in its business environment, the needs of its people are changing, and business is more global than in the past. 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 to which the company should pay the most attention to develop the kind of employees it needs and retain its most valuable performers? To answer this question, address the prompts:
- Evaluate at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort, including the pros and cons of each.
- Evaluate at least three trends or recent approaches in benefits that SEIIC should consider in its redesign effort, including the pros and cons of each.
- Assess other intrinsic and extrinsic motivators that SEIIC should consider in its redesign effort, including pros and cons of those motivators.
- Using your evaluation in the previous three sections (compensation, benefits, and intrinsic/extrinsic motivators), justify an action plan to develop and retain valuable performers in the organization.