Variable Pay Assignment
Employee cash compensation comprises of both fixed and variable pay. The variable pay is the income earned depending on the activities carried out by the business. Compensation for organizations varies from one company to the next. However, there are parts of the compensations that are common to all organization. “Clubbies” hourly pay for the junior locker – room of $7-8 per hour is common among most organizations. Similarly, the pay for the senior managers who serve as the travel coordinators of $80,000 before bonuses is also similar for the other organizations. For most organizations, the compensation is based on the basic payments made by the companies as well as the bonus payments. The cash compensation components include allowances for extra responsibilities and bonuses which are paid based on the performance of the organization. When there is a high annual income earned by a business, bonus compensation is advanced to the employees as with the case of “clubbies”.
Manager’s compensation is based on their performance and the compensation rates influence their performance as well as that of the organization (Frydman & Saks, 2010). The compensation for Ken Higdon does not seem excessive and is within the pay for executive managers in the organization. The first element of Ken’s compensation is the basic pay of $80,000 before bonuses. In addition, Ken Higdon, the Clubhouse Manager is paid bonus and trips expenses. The other form of payment that is given to the Clubhouse Manager is the share compensation of $279,000. The three forms of compensation; basic pay, share compensation, and bonus pay do not seem excessive for Ken Higdon as Clubhouse Manager. The payment package offered to him falls within the compensation range for managers in most organizations. Managerial compensation is usually high given the duties that the managers are charged and their role on the company’s performance (Frydman & Saks, 2010). Therefore, the compensation is relative to the organization’s performance. When a company has a high performance in terms of profitability, the managers will have a high compensation package.
The compensation for clubbies differs from that of baseball on the payment components. Unlike the clubbies, baseball compensation package does not include bonus payments and allowances that are offered for travels to the management. The baseball pay is composed only of the basic pay which is the amount offered irrespective of the organization’s performance. Additionally, the baseball pay is not based on the hourly rates. This implies that the income earned by the players will be lower as compared to that earned by the clubbies. Clubbies compensation package comprises of the basic pay, bonus and allowance payments which lacks for the baseball payments. Generally, bonus payments and allowances offered to the employees increase the total cash payment.
References
Frydman, C., & Saks, R. E. (2010). Executive compensation: A new view from a long-term perspective, 1936–2005. Review of Financial Studies, 23(5), 2099-2138.
Milkovich, G. T., Newman, J. M., & Gerhart, B. (2011). Compensation (10th ed.). McGraw-Hill.
