Introduction
Compensation is a methodical way of giving monetary values to employees for the work they have done. Compensation serves several purposes in a business and particular plays a huge role in recruitment, job satisfaction and job performance. One of the most distinctive characteristics of the compensation is that it can be occasionally adjusted in order to meet the business needs, objectives and the available resources. Compensation is an important tool for the management serves and is an active element in determining the activities and the overall existence of the business.
Question 1
Three jobs are chosen for comparison purposes for this case study; plant manager, regional HR manager and international HR manager. According to www.salary.com, an international human resource manager has an annual salary package of $115,360; the plant human resource manager has an annual salary package of $85,534, and finally, the regional human resource manager has an annual salary package of $97,570. In regards to this case study, the paper is going to compare the difference in the three packages in terms of salary, bonuses, median, and 75th and 25th percentiles. Each job will be examined differently to reveal the reasons for the salary range.
The most paying job is the international human resource manager and the least paid is the plant human resource manager, according to www.salary.com. This is because the international human resource manager is entitled to more responsibilities that cover a global concept, and also because the requirements for the latter are higher as compared to those of the plant human resource manager and the regional human resource manager. From the job descriptions of each position, the international human resource manager requires more qualification and experience, while it is shown that the plant human resource manager requires less academic qualification and experience.
Question 2
Jobs do not have different bonuses as a percentage of their base salaries; rather the bonuses are based on the level of performance of an individual or a group. However, bonuses are not fixed to a formal target of performance. Bonus differences also vary from one company to another. (Conyon, Peck & Sadler, 2009).
Question 3
The data includes the value of stock options. In a given fiscal year, the value of stock is listed in the compensation table summary. The value of stock option is listed because it indicates the right to purchase a given number of the common stock for a specified period and at a stated exercise price (Yermack, 1995).
Question 4
The job descriptions are accurate, but I will not apply for one since I do not meet the needed requirement. As an undergraduate, I do not meet the level of experience, and academic qualification required. Some of the jobs listed include; human resource director, assistant human resource manager, etc.
Question 5
Considering the jobs advertised in the local and regional sources, there is a difference in the level of pay. The difference in the level of pay is caused by differences in the geographical factors, demographic factors and finally, economic factors of these regions.
Question 6
The information in the provided database will be useful in determining the salary scale/rate according to the achieved qualification. The information gives me an idea about the job I qualify to apply and the one I do not qualify. When discussing the salary, a degree certificate will act as a support document in the negotiation process. However, experience and academic qualification will determine whether I get a job or not.
Question 7
The relevant labor market for human resource managers is very high. There is an increased demand for human resource managers due to the increased number of companies with inadequate \ personnel. However, there is a gap in the level of salaries each manager gets (though it is not much) depending on the location of the business. Managers operating from well-established cities earn more as compared with managers with less established cities in economic terms (Conyon, Peck & Sadler, 2009).
Question 8
The median salaries of the jobs vary greatly, with the salary difference of $11,377 for the plant human resource manager and the international human resource manager. According to www.salary.com, the difference is caused by the industry pay rate, level of experience and qualification, responsibilities attached to the job and the size of business.
Question 9
According to www.salary.com, salary database is developed by carrying out a survey over a given region of the optimum sample size, analyzing the data and giving out the full report. The database must provide a job description, different geographical location and other relevant information. Salary data provide reliable information as long as the survey is conducted in a valid, reliable and objective manner. It should present the sampling frame, sample size and response rate. The margin of error should also be present in the report. For it to be reliable, the data should be consistent and accurate. Using inaccurate compensation data may cause one to make wrong decisions.
Question 10
With free information, one has to look for additional information in order to come up with the best compensation program that suits and sustains the business in a hugely competitive environment. Therefore, consultancy surveys are necessary because they can provide one with an adequate market view that fits the compensation situation (Conyon, Peck & Sadler, 2009).
Question 11
In order to determine if to pay an employee a high or low salary, a manager will need to consider several factors. First, is the size of the business. In case of a small business the salary must fit the business in order to remain competitive in the local market. The employee’s prior salary should also be critically reviewed. Market forces that are based on the supply and demand will also dictate an employee salary. An employee can be awarded low salary in case of economy recession and a good salary during an economic boom. Negotiation can be another tool that can be used to determine employee salary. Lower salary would be justified if an employee did not adequately negotiate on, for example, a continuous increase of salary with increased levels of employee performance.
Conclusion
According to www.salary.com, it is proper to conclude that the main factors that determine compensation for employees include; economic status at a particular time, size of business, academic qualifications, experience and the industry in which the business is based.
References
Salary.com. Retrieved October 3, 2014, from http://www.salary.com/
Yermack, D. (1995). Do corporations award CEO stock options effectively? Journal of financial economics, 39(2), 237-269.
Conyon, M. J., Peck, S. I., & Sadler, G. V. (2009). Compensation consultants and executive pay.
