Compensation Plan for York Hospital
Adrienne Cheatham
HA225
Kaplan University

A compensation plan is motivation for employees to fulfill a company’s goals and reflects its mission, vision and values. It not only needs to benefit the employee, it needs to benefit the employer, making it a win-win for both parties. Employees are looking to be employed by a company with many incentives like a company matched 401k and a tuition reimbursement plan. These types of incentives will help attract qualified employees and retain the current ones. The plan needs to be marketed to correlate with the type of employee you want in your facility. Salary is not always what attracts a quality employee. “Does the company seek short-term cash flow or long-term capital appreciation” (hr.com, n.d)? Long-term incentives create long-term employees but you also need to “keep in mind that having too many incentives diffuses their value” (Bouchard, 2012). The five key elements of designing a compensation plan include the different forms of compensation, workforce demographics, business cycle, compensation philosophy and legal and regulatory compliance according to the text.
Two different types of compensation include direct compensation and indirect compensation. Direct Compensation “is all tangible rewards of the working relationship, that is, the sum of bas pay plus variable pay” (Hernandez, ). An example of direct compensation would be an annual increase in salary. Indirect Compensation is “pay received in the form of services and benefits” ( Hernandez,). An example of indirect compensation in paid time off. Workforce Demographics will change over time and will need to be re-assessed at different times. An example of re-assessing is through employee surveys. Business Cycle goes from start up to renewal and includes base pay, growths, declines and maturity