Employee compensation in most cases refers to the cash benefits that individuals receive as an exchange of the services rendered to their employer. In most cases, at least in many countries, individuals earn a certain wage or salary due to the work they do to their employers. For example, in the United States, almost over 90% of the employees or what is considered the working population earns a salary of some form of wage. The compensation that is in form of cash often comprises the wages or the salary and in some cases may include the bonuses as well as the commissions and other benefits that may be based on the company such as the health insurance benefits, disability insurance and retirement benefits among others. As I mentioned, compensation depends on the company of the organization the individual works for as such it may be fixed or variable depending on the employer. Payments such as bonuses and commissions are examples of the variable payments.
Benefits sometimes can also be either paid by the company or the employee as such like the vacation pay or payments for the holiday may be paid by the company. However others such as the medical insurance compensations are often paid in by the individual employees. It is wise to understand that compensations in many countries are shaped by the law of that land. For instance, compensations in the United States are shaped by the tax policies that have been so long based on the tax and compensation history. In case of the health insurance in the United States, the compensation is a typical common benefit received by the employee as the does not exists a national sponsored national health insurance in the United States as such individuals seems to pay for their premiums that are deductable in their personal income taxes.
In case of the newly hired secretary, the compensation will constitute the combination of wages, salaries and benefits that the secretary will receive in the line of duty. The compensation will include the hourly wage in addition to the bonus payment and incentives that the company will give in the line of duty. In this case, the total compensation package will have various constituents including the hourly wage, annual salary, retirement benefits, raises, bonuses and benefits in addition to the health benefits (NOEWE 2011).
The hourly wage in this case will be started on the minimum wage that Illinois Department of labor accepts. The employee will start at a minimum wage of $8.25. The employee will be classified under non exempt employee and will receive a call wage that is calculated on the hourly basis for work not excess of 40 hours per week. Anything above 40 hours will be considered over time and the employee will receive one half the hourly wages in addition to the hourly wage for the period of in excess hours of work. The employee will negotiate an agreement with the management that will be considered as the “labor union contract” and will be set based on the terms and conditions of the agreement for a period of time before the pay rise (DOL 2010).
In addition to the minimum wage pay for the first three months of the employment, in the compensation scheme will also be included an annual salary that will be considered none exempt and will not be considered on the overtime pay. In this scheme, any addition to the education level to the level attained prior to the hiring. The employee yearly compensation will be considered based on the wage scale at that period of the year and the education level achieved in addition to their years in the profession that may have earned them some experience. This will dictate the competency level that is achieved through the credentials provided and education level. At this point of the year, the employee will be receiving a wage based on the U.S the requirement of the U.S Personnel Management Office that provides the annual wages that must have been earned by an employee by a certain period of the year. It will also increase based on the step and grade promotion for the federal government employee that is paid off according the stipulation in the General Services and wage scales (Davis 2008).
According to the release by the U.S department of labor, the costs for civilian workers that secretary falls, the workers pay must be increased by 0,3 percent that is seasonally adjusted for the three month of the period March 2013. The wages salary will be 0.4 percent increase that was impacted from December 2012. The benefits will be impacted from June 2013. The compensations will be increased in within twelve months of the period ending June 2013 and remain essentially unchanged from the June 2013. Any form of error experienced with the data in the private industry must be solved with the relevant offices and should not be suppressed by any office in the organization as this may result to a number of unprecedented lawful actions that may cause the company a great deal as the Department of Labor makes a strict follow up on the issues dealing with the employees social care (Lucian & Fred, 2004).
In addition to the payments received as wages and yearly basis requirement, the employee will be required by the organization’s law to participate in the retirement plan where they will design a designate pretax plan where their contributions will be deducted each check towards this plan. In this case, the employee’s contribution will be deducted at five percent of their gross salary or their minimum wage. The company will match 50 percent of their contribution which is an equivalent to 2.5 percent of the gross salary. This payment will only be availed to the employee after the vesting period and this period often refers to the time before which the employer’s contribution is fully availed to the employees, a period that ranges anywhere between one to five years based on the agreement between the employee and the employer. In the case of five year vesting period, it means that the first year after the employee makes their first contribution, 20 percent of the money they will contribute will belong to them with 40 percent belonging to them in the second year with the subsequent years allowing for sixty, eighty and 100 percent of the employees contribution. This contribution will be vested or invested in their compensations scheme to become the employees own refund at the end of the period. This means that In any case the employee quits the job before the end of the agreed period, in this case five years; they will forfeit the portion of the non vested employer’s contribution plus all the accrued benefits (DOL 2010).
The secretary will also be entitled to raises in addition to the bonuses and the incentives. This will be given based on the employee’s performance system to ensure there is an increase in the salary. The secretary will also be entitled to annual raise based on the performances and the ranking achieved during that period. Their outstanding performance will earn them a five percent increase in their original wage after three months of outstanding performance. The bonus and other salary incentive plan will include cash incentives based on the packages offered by the organization that is supported by the labor laws. This will be based on the discretionary pool of the amount of money designated for the contribution to the employees whose performance will be recognized to have contributed to the success of the business. These bonuses and incentives will be tied to the improvement of the bottom line or increase of the values of the shares that will be publicly owned by the employee in the company’s stock market as the company in an attempt to enhance loyalty or company commitment and a feeling of ownership, will offer shares to their employees (NOEWE 2011).
As the employee will be under the new wage bill set to be in effect in the state by the time of employment, health benefit will be a necessity. The secretary will be compensated through a group health care benefit plan. This will be considered through the sizeable portion of the total monthly premium that will leave a portion of the premium to be deductable from the employee’s pay. Their healthcare plan will be deductable from their pretax income that is basically their gross earnings. The group health coverage proposal shows a supplementary coverage for the employee dental as well as their vision care. The employees will also be allowed to make a choice on the total cost for the short term disability insurance that offer coverage for the long term disability insurance as part of the total compensation on the employees’ benefits.
In relation to the HRM model requirements, it will be required that the employee is educated in a professional way concerning the business organization and how the organization operates. This will include the strategy of the organization and the expectation of the organization from the employee in an attempt to realize the organization achieves its goals. It is the responsibility of the business organization to ensure the employee is helped develop their expertise in their field by offering the best state and art in developing the staffing of the organization and ensuring appropriate rewarding systems of to the employees to promote the excellence in their fields. It is the responsibility of the business organization to ensure appropriate mechanism to nurture integrity among their employees by promoting and showing a sense of trust to their employees at this will help them develop the competencies. Through the development of technology at the work place, the employees are able to deliver appropriately. These HRM model requirements if enhanced and insisted on, the employees will be able to develop high sense of performance and connection with the organization thereby producing the required results.
Works Cited
Lucian Bebchuk & Jesse Fred (2004), Pay Without Performance, the unfulfilled Promises of Executive Compensation. Harvard University Press.
Michael L. Davis, (2008) Executive Compensation: The professional’s Guide to current issues and practices.
National Occupational Employment and Wage Estimates 2011.
United States Department of Labor, 2010.
