Career Development Plan IV Compensation InterClean is entering a new strategic target and upper management has asked for a proposed compensation plan purposely for the new sales team. Recommendations for the new compensation plan will be submitted to the human resource department manager for endorsement. The foundation of the new compensation plan was developed after reviewing the job analysis, training program, and performance management plan. The plan includes a description of the prepared proposal and the explanation of an effective pay system.
The three parts of a total rewards package to encourage employees to achieve highest performance is implemented in this strategic plan. The compensation plan also illustrates the designed benefits and incentive programs for the mutual advantage to the employee and employer. Pay Structure Compensation is the benefits from the employer to the employees for achieving the company’s objectives. According to the author of Managing Human Resources, compensation includes direct cash payments, indirect payments in the form of employee benefits, and incentives to motivate employees to strive for higher levels of productivity (Cascio, 2005).
This compensation plan consists of a pay structure, benefits, and incentive programs. The pay system and benefits can be modified as the job requirements change. New incentive programs can be developed and implemented to motivate high performance. Prominent compensation and benefits systems attract and retain high performance staff. An effective pay and incentive system is developed with four main factors such as updated job descriptions, job evaluation method, pay surveys, and pay structure (Cascio, 2005).
Assigning a dollar value to jobs can be established by using the point method that develops the pay grades from the least amount to the greatest amount. The point method connects the job with the pay structure. After identifying and surveying the average pay in the labor markets and evaluating the budget, this pay system was developed as shown below: GRADEPOINT SPREADMIDPOINTMINIMUM RATE OF PAYMAXIMUM RATE OF PAY 260-8070$12. 00$14. 25 381-1019113. 1315. 71 4102-12211214. 4217. 40 5123-14313315. 9119. 33 6144-16415417. 6221. 56 7165-18517519. 5924. 12 8186-20619621. 8527. 06
This pay structure contains the pay grade, point spread, midpoint and the minimum and maximum rate of pay. This scale can be used to determine a fair and equal employees’ pay rate. Employees will receive an increase of pay every six months after evaluation until the maximum rate has been reached. This rate does not include annual increases applied as job requirements change. Developing a pay structure has three main challenges such as determining the comparative information value of a specific job; the suitable pay range for a job with the stated value; and the value of each job in the allotted pay range (Heathfield, 2009).
After comparing the new sales team’s experience with his or her specific job and selecting a appropriate pay range, the allotted pay range was determined. Research illustrates that top management in retail average 47,849 annually or 23. 00 hourly (Salary. com, 2009). The vice president of sales position at InterClean was allotted a grade 8; and the manager position was allotted a grade 6. Eric Borden has several experiences but this is his first position as vice president. His point spread was allotted 186 points. Since grade 8 point spread begins with 186, Borden’s starting pay would be $21. 85.
In six months, he will be eligible for an increase until maximum rate of $27. 06 is reached. With Tom Gonzalez’s experience, his point spread was allocated 154, which his starting pay would be $19. 59. The total was determined by subtracting the minimum of grade 6 from the maximum of grade 6 then adding the reminder to the minimum. After carefully surveying average earning for salesperson position, my recommendation is to allocate InterClean’s experienced salesperson positions within a grade 4 ($14. 42 – $17. 40) as well as inexperienced salesperson positions within a grade 3 ($13. 13 – $15. 71).
According to a survey of recent college graduates, a retail salesperson earns an average of $1,560 per month or $9. 75 hourly (Able Recruiters, 2009). In the median wage of retail salespersons, the average annual earning is $19,437 or $9. 34 hourly (Texas Workforce, 2009). Since Susan Blunt is seniority based pay, she will be deal within a different perspective. Presently she is at the maximum rate of pay in grade 4 and her point spread is 143. Blunt’s starting pay should be the maximum rate of grade 5, which is $19. 33. Employees’ Benefits As an added attraction, benefits were designed for the sales team.
These benefits included are healthcare insurance, life insurance, disability insurance, workers’ compensation insurance, and retirement plans. InterClean will acquire 85% of the cost of the healthcare by providing a Health Maintenance Organization (HMO) for all employees. The life insurance will cost employees $10 a month per $10,000 units. InterClean will obtain the cost of the short-term disability and the employees can purchase the long-term disability at a reasonable price. The company will provide workers’ compensation insurance that pays employees 80% of salary if injured on the job.
As a courtesy and motivation, InterClean will pay the 20% in a hump sum payment when employees return to work along with any impairment rating. The retirement plan consists of a 401-plan where InterClean will match employee’s contribution 100%. Employees will be vested after five years of service and will accumulate $100 per year of service after 20 years in monthly retirement income. Effective Pay System This pay system was created to be effective by attracting, retaining, and motivating new and existing employees. This proposed plan for InterClean’s new sales team was created in an appealing and fair manner for the employees.
The pay system can achieve internal, external, and individual equity; and maintain a balance in relationships between direct and indirect forms of compensation and between the pay rates of supervisory and nonsupervisory employees (Cascio, 2005). Incentive Package The three components of a total rewards package that InterClean will offer to employees to motivate high performance are security and health, payments for time not worked, and employee services (Cascio, 2005). InterClean’s security and health package will include: •life insurance, •workers’ compensation, •disability insurance, •hospitalization, surgical, and maternity coverage, health maintenance organizations (HMOs), •medical leave, •pension plans, •social security, •unemployment insurance, •supplemental unemployment insurance, •severance pay (Cascio, 2005). InterClean will pay employees for time not worked such of sick days, holidays, personal days, vacation, jury time, and sabbatical leave. InterClean’s employees will qualify for employee services as followed: •commission, •bonuses, •credit union, •training, •certification, •tuition reimbursement, •company car, •child care facility, •employee assistant program, •flexible schedule, •profits sharing, •family leave, •travel plan.
Compensation includes the base salary, bonuses, and benefits. InterClean can institutionalize high performance staff with the appropriate compensation plan. The evaluation of the average benefits and costs for retail staff assisted to determine the proposed plan. Below are three appendices that illustrate the average benefits and cost associating with retail managers, retail manager assistants, and retail sales staff. APPENDIX A: Retail Manager – U. S. National Averages (Salary. com, 2008) BENEFITSMEDIAN AMOUNTPERCENTAGE OF TOTAL BASE SALARY$47,84966. 7% BONUSES$2,9554. 1% SOCIAL SECURITY$3,8865. 4% 01 K$1,8292. 5% DISABILITY$5080. 7% HEALTHCARE$5,7228. 0% PENSION$2,3373. 3% TIME OFF$6,6449. 3% TOTAL$71,730100% APPENDIX B: Retail Assistant – U. S. National Averages (Salary. com, 2008) BENEFITSMEDIAN AMOUNTPERCENTAGE OF TOTAL BASE SALARY$37,76967. 4% BONUSES$9641. 7% SOCIAL SECURITY$2,9635. 3% 401 K$1,3942. 5% DISABILITY$3870. 7% HEALTHCARE$5,72210. 2% PENSION$1,7823. 2% TIME OFF$5,0659. 0% TOTAL$56,047100% APPENDIX C: Retail Sales Staff – U. S. National Averages (Salary. com, 2008) BENEFITSMEDIAN AMOUNTPERCENTAGE OF TOTAL BASE SALARY$22,08262. 6% BONUSES$6821. 9% SOCIAL SECURITY$1,7414. 9% 401 K$8192. % DISABILITY$2280. 6% HEALTHCARE$5,72216. 2% PENSION$1,0473. 0% TIME OFF$2,9778. 4% TOTAL$35,298100% References Able Recruiters. (2009). Retail salespersons and sales clerks. Retrieved June 16, 2009 from: http://www. able-recruiters. com/jobs/retail-salespersons. htm Cascio, W. (2006). Managing human resources: Productivity, quality of work life, profits (7th ed. ). Charter 11. New York: McGraw-Hill. Retrieved June 15, 2009 from: https://ecampus. phoenix. edu/content/eBookLibrary2/content/ereader. aspx? assetmetaid=6dd1de0b-dd7d-4182-b336-8cfad1141f8e&assetdataid=aac1240b-9bce-46e0-80cc-3e21e516b67e Cascio, W. 2006). Managing human resources: Productivity, quality of work life, profits (7th ed. ). Charter 12. New York: McGraw-Hill. Retrieved June 15, 2009 from: https://ecampus. phoenix. edu/content/eBookLibrary2/content/ereader. aspx? assetmetaid=6dd1de0b-dd7d-4182-b336-8cfad1141f8e&assetdataid=2d47dad5-9d1f-48ba-a032-8f938a287d8b Cascio, W. (2006). Managing human resources: Productivity, quality of work life, profits (7th ed. ). Charter 16. New York: McGraw-Hill. Retrieved June 15, 2009 from: https://ecampus. phoenix. edu/content/eBookLibrary2/content/ereader. aspx? ssetmetaid=6dd1de0b-dd7d-4182-b336-8cfad1141f8e&assetdataid=31eef184-a82b-4572-8b87-f60688b5999b Healthfield, Susan. (2009). Develop a pay structure that reflects your company values. Microsoft Corporation. Retrieved June 15, 2009 from: http://office. microsoft. com/en-us/help/HA011879641033. aspx Salary. com. (2009). Retail Manager. Salary. com Inc. Retrieved June 16, 2009 from: http://swz. salary. com/salarywizard/layoutscripts/swzl_salaryresults. asp? hdSearchByOption=0%2C+0&hdLocationOption=&hdKeyword=Department+Retail+Sales+Manager&hdJobCategory=SM05&hdNarrowDesc=Retail%2FWholesale&hdZipCode=&hdStateMetro=&hdGeoLocation=U.
S. +National+Averages&hdCurrentPage=&hdViewAllRecords=&hdJobCode=SM15000295&hdJobTitle=Retail+Store+Manager&hdCurrentTab=1&hdZipCodePosted=&hdPaycheckCalc=&hdpageName=&hdOmniJobTitle=Department+Retail+Sales+Manager&hdOmniNarrowDesc=Retail%2FWholesale&op=salswz_psr&pagefrom=salaryresults&hdOmniState=&hdOmniGeoLocation=U. S. +National+Averages&d50th=33289. 4461&jobcounter=&countertype=&totaljoblistnum=&wsrcode=SW1&geo=U. S. +National+Averages&metrocode=&geometrocode=&zipcode=&jobcode=SM15000239&narrowcode=SM05&state=&statecode=&r=salswz_salresnxt_psr&educationcode1=&cmbEducation=&joblevelcode=&jobfamilycode=10