Prompt 4.docx - Part 4 Components of the Compensation Plan...

Part 4
Components of the Compensation Plan
1. Wages and salaries - The wage should be determined by the person's expertise and
talents, with future raises based on the employee's worth, performance level, and
contribution to the firm.
2. Bonuses - Employee bonuses are a frequent way for businesses to deliver
performance rewards. They are often handed out yearly, generally at the end of the
year, in a single lump sum.
3. Rewards and Recognitions – Try and ensure project recognition is distinct from
individual recognition; this will make it easier to identify each employee's worth and
relevance. Pay close attention to reward timing since desired performance should be
awarded as soon as feasible.
4. Organizational Goals - Make sure to compensate employees for their individual
performances as well as for efforts that promote the company's, departments,
and/or team's business goals.
Communication objectives to be included in a message to employees and managers
1. Purpose - The purpose of the compensation scheme is to promote performance and
accomplish company goals.
2. Values - Employee characteristics such as growth, innovation, reliability, and
dedication that an employer wishes to reward using compensation
3. Equity and distribution - How do an employer plan to guarantee that everyone
receives a fair compensation for their efforts, especially when compared to co-
workers who perform comparable tasks
4. Compliance - Any local, state, or federal legislation that must be adhered to, such as
the Equal Pay Act, must be considered.
Compensation Plan Components:
Marketing manager:
Base pay $50,003
Across the board 1% salary increase to the base pay
Cost of living $24,000- 48,000 (Depending upon number
of people in the family)
Merit pays (if any)
Lump sum bonus 2% of annual salary
Individual incentive  Long -Term stock-based Incentives
 Career Development & Training
Recognition and Other Non-Cash Incentive
Plans such as Employee of the Month"
program, work/life programs such as wfh

programs
Group Incentive  Gain-sharing
 Profit-Sharing
Gain-Sharing Will be calculated based on Scanlon Plan
Profit Sharing 10% of the annual profits to the employees
Marketing coordinator:
Base pay $37003
Across the board 1% salary increase to the base pay
Cost of living $24,000- 48,000 (Depending upon number
of people in the family)
Merit pays (if any)
Lump sum bonus 2% of annual salary
Individual incentive  Long -Term stock-based Incentives
 Career Development & Training
Recognition and Other Non-Cash Incentive