...What are the strengths and weaknesses of the compensation system (they focus indirect compensation instead of higher salaries) Cirque du Soleil is providing the alternate to shrinking circus industry and called circus of the future. It was based on the blue ocean strategy and still after 25 years it is considered as blue ocean industry. It is based on the unique concept and creativity and maintains the quality and consistency over more than 2 decade. It performs five continent and more than 90 cities. Cirque du Soleil was founded in 1984 and grown from 73 employees in 1984 to now they have around 5000 employee. The biggest challenge for them is to maintain and attract these special tenanted employees or I should call them performer with competitively low wages. Cirque believes its unique approach to managing a worldwide workforce that runs the gamut from acrobats to administrative staff suits its business approach. Cirque adopted the unique approach to manage their workforce which is not totally based on higher salary. There compensation system is based on low salary but better benefits. They valued the noneconomic benefits like training in different places and different technique, good food which feels like home, shuttle services to work from home. Cirque motivates their employee towards their work where employees work with passion. Every employee feels like working in very specialized and unique place like Red Sox and Disney world and feels proud performing every night....
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...Before you think about designing and implementing a compensation plan, you must first develop a clear and compelling compensation strategy. To develop a successful compensation strategy you need to take the following steps: Define your compensation philosophy. Link compensation to your overall business strategy. Change the culture and reinforce it with compensation. Reward the behaviours that drive the results. Think total compensation. Measure your return on invested payroll £s. 1. Define your compensation philosophy A sound compensation programme begins with a clear, focused compensation philosophy that defines and answers fundamental questions such as: What do we want to pay for? How do we want to pay for it? What is our competitive posture? How will we split up the pie? We recommend developing a total compensation mission statement that clearly specifies the results you want to accomplish, the behaviours necessary to achieve them, what you will pay people for, and how you intend to position your company in the marketplace. This lays the foundation for your entire compensation programme. It serves as a compass and a beacon to guide you through the difficult task of creating and implementing the programme. Who creates the total compensation mission statement? Depending on the size of the company and the management structure, any or all of the following: board of directors, board of advisors, CEO, top management team and representatives from others in the organisation...
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...Before you think about designing and implementing a compensation plan, you must first develop a clear and compelling compensation strategy. To develop a successful compensation strategy you need to take the following steps: 1.Define your compensation philosophy. 2.Link compensation to your overall business strategy. 3.Change the culture and reinforce it with compensation. 4.Reward the behaviours that drive the results. 5.Think total compensation. 6.Measure your return on invested payroll £s. 1. Define your compensation philosophy A sound compensation programme begins with a clear, focused compensation philosophy that defines and answers fundamental questions such as: •What do we want to pay for? •How do we want to pay for it? •What is our competitive posture? •How will we split up the pie? We recommend developing a total compensation mission statement that clearly specifies the results you want to accomplish, the behaviours necessary to achieve them, what you will pay people for, and how you intend to position your company in the marketplace. This lays the foundation for your entire compensation programme. It serves as a compass and a beacon to guide you through the difficult task of creating and implementing the programme. Who creates the total compensation mission statement? Depending on the size of the company and the management structure, any or all of the following: board of directors, board of advisors, CEO, top management team and representatives from...
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...UNIT 1 Deadline as Apr 6 Question 1 Son, Ha, MA __________ compensation is the psychological mindset of performing a job. Son Answer | | Extrinsic | | | Intrinsic | | | Base pay | | | Discretionary | Question 2 Which of the following stakeholders requires that companies comply with all employment legislation? Son Answer | | Employees | | | Line managers | | | Executives | | | U. S. Government | Question 3 COLA (Cost of Living adjustments): Ha Answer | | are tied to changes in the price of consumer goods. | | | are part of seniority pay systems. | | | reward employees based upon the achievement of individual goals. | | | are offered as a type of merit pay. | Question 4 __________ is the term used to describe both the monetary and nonmonetary rewards an employee receives. Ha Answer | | Extrinsic compensation | | | Salary | | | Discretionary benefits | | | Strategic compensation | | | | Question 5 __________ focuses on gaining competitive advantage by being the lowest-cost producer of a good or service within the market place. MA Answer | | Differentiation strategy | | | Cost leadership strategy | | | Competitive strategy | | | Core compensation | Question 6 List and explain the five different stakeholders of a company’s compensation system. Son There are five different stakeholders of a company compensation system and the human resource department provides them within and outside...
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...employees, you have been asked to evaluate different compensation strategies that are available for adoption within your organization. Compare and contrast at least three compensation strategies and determine recommendations for how they may be implemented within your organization. Name: Henry Rivera I.D. #: 000318961 Reference Title Finding #1 Godfrey, W. (2013, January). Compensation Strategy for Success. Prezi. Retrieved from http://prezi.com/j9k9_m_2qiwn/compensation-strategies-for-success/ Sager, Suzanne. (2011, September). Merit Pay Most Often Used in Compensation in Public and Academic Librarians. Library Worklife. Retrieved from http://ala-apa.org/newsletter/2011/09/01/merit-pay-most-often-used-in-compensation-for-public-and-academic-librarians/ Ojimba, E. (2004, November 15). Salary Basics – Developing a Strong Compensation Strategy. Salary.com for Business. Retrieved from http://www.salary.com/Small-Business-Advice/advice.asp?part=par410 Finding #2 McGladrey. (2011). Lessons from Recession Increasing Focus on Incentive Compensation Programs. Retrieved from http://mcgladrey.com/Perspective/Lessons-from-recession-increasing-focus-on-incentive-compensation-programs University of Wisconsin – Green Bay. (2013, April 9). Compensation Philosophy. Retrieved from http://www.uwgb.edu/hr/documents/CompPhilosophy0401.pdf Finding #3 Gerhart, B., Milkovich, G.T., & Newman, J.M. (n.d.). Compensation Strategy. Answer, McGraw Hill. Retrieved from http://mhanswers-auth...
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...employee C. below market base pay with stock ownership D. above market base pay with low benefits Difficulty: Medium 3. (p. 41) A compensation system that pays employees such that “some skin is in the game” means that A. a portion of employee pay is at risk B. employers risk high labor costs C. level of base pay is below competitors D. base pay is low while benefits are generous Difficulty: Medium 4. (p. 41)______________ changed its compensation strategy as the company grew and matured? A. SAS B. Google C. Microsoft D. CNET Difficulty: Medium 5. (p. 42) At the corporate level, a strategic compensation perspective addresses the question: A. What business should we be in? B. What is our desired return on assets? C. How can our total compensation help gain competitive advantage to achieve organization success? D. How can job analysis help us select the most appropriate certain compensation technique(s) for our organization? Difficulty: Medium 6. (p. 42) What level of strategy is the question “how do we gain competitive advantage”? A. Corporate B. Business unit C. HR D. Departmental Difficulty: Medium 7. (p. 42) The social, competitive and regulatory environment factors are most important for which type of strategy? A. Corporate B. Business unit C. HR D. Strategic compensation Difficulty: Medium 8. (p. 42) Which of the following...
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...Executive Summary With our organization reaching over 100 employees in many different salary levels we must evaluate the best possible compensation strategy for our organization. In this report, the various compensation strategies and recommendations for implementation will be displayed. The compensation strategy of an organization is one of the most important programs that is a necessity to retain and attract quality workers. There are many different ways to compensate workers but the focus of research has been on that of performance based, incentive based and total compensation strategies. These each have a different benefits for different organizations. The performance based compensation is one that rewards workers for completing projects by certain deadlines or with certain standards. This strategy is beneficial for an organization that has strict deadlines and wants to attract workers who think what they accomplish should speak for itself. This compensation rewards workers who achieve a certain task in a given amount of time and is rewarded by benefits or promotions. This strategy is beneficial for retaining skilled workers who are competitive and high performing. The incentive based compensation strategy is one that rewards workers who attain professional achievements. These achievements could be joining a professional organization or gaining a professional certification. This strategy is beneficial to the organization as it helps to demonstrate the credentials...
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...Session 9 Samstag, 6. September 2014 13:30 Session 9 Prep Topic: CEO compensation Reading • Résumé Pedro Matos, Darden Professor • Chapter 7 in Corporate Governance • Chapter 7 in Boards That Deliver • Bargain Bosses, American chief executives are not overpaid, The Economist • How to get paid like a U.S. CEO, Fortune • Executive Compensation Corporate Governance: Chapter 7 - CEO Compensation • Norms for CEO compensation ○ Proxy statements provide information on executive compensation and are distributed ahead of shareholder meetings ○ There is a positive correlation between firm size and total CEO compensation ○ The higher the CEO total compensation, the larger the percentage of non-cash compensation (bonus) • The Goal of executive compensation • What is good performance? ○ Current circumstances, its goals and the execution of its strategies ○ Compensation should include short- and long-term plans ○ Long-term: achieving strategic goals (e.g. financial) ○ Compensation/performance should be benchmarked against peers • Building a compensation plan ○ Peer comparison is the beginning, but should not be the only determinant of CEO compensation ○ Gradual rise of CEO compensation is due to the matching with competitive compensation as soon as one competitor increases compensation • Compensation mix ○ Base salary Have average base salaries with at-risk copmensation when performance is superior ○ Fringe Benefits 30-50% of base salary Medical and life insurance premiums,...
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...Compensation Theory and Practice Term Paper On Compensation Theory and Practice (A study Based on UCBL) Course code: MGT-321 Course Title: Human Resource Management Submitted to Tanzila Ahmed Course Instructor Submitted by Group Name: INNOVATORS Name ID Md. Ahadujjaman 1001010131 Faglul Karim Raihan 1001010142 Abdul Aziz 1001010127 Ashfaqur Rahman 1001010141 Gulam Sarwar 1001010060 Sec-C, 24th batch Department of Business Administration Leading University, Sylhet Date of Submission: August 26, 2011 Compensation Theory and Practice 2 LETTER OF SUBMISSION August 26, 2012 Tanzila Ahmed Lecturer of HRM Department of Business Administration Leading University, Sylhet, Bangladesh Subject: Letter of Submission. Dear Sir, It is an enormous pleasure to submit our tern paper titled “Compensation Theory and Practice” assigned as a requirement of our course related. In preparing this assignment we have acquired much knowledge about compensation. We have tried our best to furnish the assignment with relevant data, which we had to collect from online and related journal. We hope this assignment will help the organization sector to gather some insights on the windows to do further studies in this aspect. We would like to convey our tributes to you and thank you for giving us the opportunity to work on this topic. Your queries in this aspect will highly be expected. Thank you Sincerely yours Faglul Karim Raihan ID: 1001010142 Md.Ahadujjaman ID: 1001010131 ...
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...Running head: Compensation Planning 1 Compensation Planning Jonathan Phifer BUS 434 Compensation & Benefits Management Instructor Justin Furlong July 8, 2013 Compensation Planning 2 Compensation Planning When HR is designing a strategic compensation plan for and organization there are several key factor to consider which should include criteria for strengthening performance, containing cost, limiting liability, and promoting fair pay for employees. To ensure long term success and organizations need a compensation package that links organization strategy to good performance and ties it to the labor market. It also must be within legal compliance of the law and provides a sound salary structure pay for the employees. With the collaborative between these components they must be designed in such a way that it will support the organization business strategy which will stand the test of time and allow the organization to be successful. In this paper I am going to identify these key components and while designing a compensation plan for Holland Enterprises to allow the organization to be successful in the market place. The global market over the last two decades has placed greater stress on organizations regarding their ability to be competitive and profitable...
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...Philosophy of Compensation Nikolette Arnold Letu How should a compensation plan reflect an organization’s mission statement and core values? The company’s mission and vision statements reflect its core values. For the same reason, having the right vision and mission statement is of outmost importance as it serves as a guiding principle for organizations to be able to stay focused on what they intend to do and how they should do it (Evans, J., 2010). Most organizations that have aligned their activities with their vision and mission statements have gained more than satisfactory results. Part of an organization’s strategic development is the setting of goals that coincide with their core business values. For example, a product manufacturer would ask, what is the purpose of making these products? How do I market these products? In the face of the competition, how would I know that consumers would buy these products? In addressing these questions, one would need to have a clear goal of what particular product he would manufacture and the intended market for the said products. Apparently, the product must have an edge whether in pricing, design and other value adding strategies in order to become sellable. In this regard, a manufacturer sets a vision of what he wishes to accomplish; should he want to become the leading producer of sports apparel. In order to accomplish that, he sets his mission, if it be producing the best sports apparel using only the best material...
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...Internal and External Equity Comparison HRM 324 April 28, 2014 Internal and External Equity Comparison` When reviewing a successful companies' portfolio to determine what makes them more successful from the next, you will find the company will have a strong compensation plan. A Compensation Plan is one of the more important aspects in the organizational environment. Before formulating the compensation plan based on internal and external equity, it is important to first understand what internal and external equity refers to. External equity is said to be prevailing in the organization when the employees are rewarded with fair compensation to those who perform similar jobs in other organizations. External equity persists when an organization's pay rates are equal to the rates prevailing in the organization's market. (Lederer & Weinberg, 1995) Internal equity is present when the employees are being provided with fair wages relative to the value of their jobs within the organization. Responsibility, rewards and compensation provided to an employee should be in equity with the other person working at similar position within the organization. When formulating an effective compensation plan that is based on the internal equity, it is important to first consider the basic factors. The first step is to understand the types and varieties of jobs being performed by various employees within the organization and also the required level of skills, education...
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...Internal and External Equity Compensation When a company is designing their total compensation plan there are many different factors that need to be taken into consideration. Are they going to go with a compensation plan that focuses on internal equity, external equity or maybe a little bit of both? What kind of benefits are they going to offer? Is the company going to pay for the benefits in full or will the employees be responsible for paying a portion of them? Then there are also the legal aspects that need to be followed to avoid legal ramifications such as the Lilly Ledbetter Fair Pay Act of 2009. Internal Equity Compensation “Internal equity deals with the perceived worth of a job relative to other jobs in the organization” ("Compensation Plans - An Overview - Base Pay", n.d.). “In developing a compensation package based on internal equity requires a corporation to develop and evaluate the compensable factors that will go into setting and individual employee’s pay” (Romanoff, n.d.). When a company chooses to base their compensation plan on internal equity what they do is they look at jobs that perform similar duties, and those jobs will be paid the same wage. For instance, if there are three Executive Assistants in a company then, all three Executive assistants pay will be around the same. Also with internal equity a company wants to retain the talent they currently have, so they are more than likely going to invest more in their employees by offering training...
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...Compensation and Motivation Compesation and Motivation A. Vega Dr. B Smith In the 1960’s, Abraham Maslow and Frederick Hersberg claimed that compensation did not motivate, bur rather dissatisfied. If we define their use of the word compensation to include only base compensation, then findings still show true today. The best motivator is the work itself, but other forms of compensation such as profit sharing, health benefits, bonuses, stock options, and deferred compensation would come second to that. (Winning, Incentive Compensation and Motivation). With the current economy, many are more motivated by job security over compensation, but at the same time, compensation is the security with all the job losses, and therefore serves as a motivator. With that said, what compensation actually represents can be the motivator. Incentive compensation programs involve a baseline for what needs to be done on the job along with productivity measurement. Incentives are given to those who go above and beyond the requirements of the job and are able to either produce more, or show that they have worked harder than what is expected of that position. Because compensation is not as cut and dry as it once was, employers must consider other forms of compensation or incentive compensation to compete for skilled employees. An article I found on Inc.com states that “To recruit, retain, and motivate the best employees, you need to understand compensation and reward plans and...
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...Critically discuss the claim in the above mentioned passage that the most significant trend is the move away from guaranteed compensation to performance related compensation. What are the implications to the organization’s human resource management effectiveness? 3 Performance-Based Remuneration: 3 Guaranteed Variable Salary 4 From guaranteed compensation to performance related compensation. Why? 4 b) Provide a concise overview of how an organization can ensure that its compensation strategies are able to support it strategic objectives 5 • Increased skill and flexibility in the workforce 5 • Reduction in traditional demarcations 5 • Increased efficiency 5 • Tangible benefits for workers in return for changes in working practice. 5 c) Provide a set of arguments to support the view that executive pay should be linked to company performance 6 d) What are the advantages of linking employee pay to performance? 6 Provide a 'felt fair' system of rewarding people according to their contribution 6 Higher performance within the organization may result 7 Provides a tangible means of recognizing achievements 7 People understand the performance imperatives of the organization 7 Link between extra pay and extra performance is clear 7 Conclusion 8 References: 8 Introduction In this assignment I will discuss about compensation and benefit management and many aspects of it and how they can affect an organization and about their influences. a) Critically...
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