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Career Development Plan Part IV - Compensation

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Running head: Career Development Plan Part IV - Compensation

Compensation Proposal Plan

Meshanda Mitchell

HRM 532: Human Capital Management

Edmund Bailey

September 21, 2009

Compensation Plan Proposal

September 21, 2009


TO: InterClean and EnviroTech, Human Resource Department

FROM: Meshanda Mitchell

SUBJECT: Compensation Plan Proposal

The merger of InterClean and EnviroTech will take both companies into a new direction; therefore, upper management has decided to create a new compensation plan for all employees. The purpose of this proposal is to provide human resources with an explanation of how the compensation pay system will work. Within this proposal, a description of a total rewards package that would motivate employees will be described. Lastly, the benefits to the company and individuals will be discussed. With the approval of the new employee compensation plan, this will allow InterClean and EnviroTech to retain current employees, and recruit potential employees.

Pay System

The pay system that has been created will be based on employee's performance. Our company realized that in today's job market, there is strong competition for capable individuals. As a result, it is important that we create a compensation pay system. InterClean and EnviroTech pay system is designed to "attract, retain, and motivate employees" (Cascio, 2005). The performance based system was chosen because it falls in align with the strategic mission of InterClean and EnviroTech.

The employees of InterClean and EnviroTech will be provided with a base pay which is determined on the position that is held within the organization. The base salary will be complimented and enhanced with an aggressive incentive bonus plan and other rewards. There will be compensation committed created to evaluate employee performance and keep our compensation plan current. Employees who meet and exceed sales quotas will receive a 5% annual bonus. Also, at the end of each quarter any top sales representative who constantly meet sales quotas will be rewarded with a special reward such as gift cards, 2 hours paid early leave, extra paid time off, etc. Employees who exhibit superior performance in customer service by maintaining customer accounts will receive a 3% bonus. With each year of service, the employee will receive an increase in paid vacation days, matching percentages into their 401k plans, and stock options. Both companies appreciate the loyalty and hard work of its employees.

Total Rewards Package

The pay system will be designed to encourage employees to achieve a higher level of performance. Pay systems that are not satisfactory to employees will produce a "mistrust and a lack of commitment" (Cascio, 2005). There is a connection between motivating and satisfying employees and having satisfied customers. In other words, focus on creating satisfied and motivated employees and those motivated, satisfied employees will take care of customers. To improve employee motivation organizations should create a system that consistently rewards employee achievements such as employee appreciation, employee recognition and employee compensation.

* Employee Motivation through Appreciation. Many times, managers will damage individual's



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