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Running head: COMPENSATION PLAN OUTLINE1Assignment 2: Compensation Plan OutlineShauna FriersonCompensation Management- BUS 409- Professor FitzpatrickFebruary 24th, 2018
COMPENSATION PLAN OUTLINE2Assignment 2: Compensation Plan OutlineA company is only as good as its employees.Employees and executives who perform poorly reflect negatively on the company they represent.Attracting and retaining great talent to represent a company depends on many factors, and a company’s compensation plan is one of those factors.While a compensation package can have several components, a company’s compensation plan refers to all those components including the manner in which compensation ispaid and the purpose of bonuses, salary increases and incentives that employees receive (Mayhew, 2011).James River Insurance Company’s compensation plan gives it a competitive edge over competition, while attracting and retaining talented and qualified employees.Evaluation the existing compensation plan and determining if it is the most appropriate forJames River Insurance CompanyJames River Insurance Company currently utilizes skill-based and pay for knowledge compensation programs as their compensation strategies.The objectives of skill-based and pay for knowledge programs are to reinforce to employees the importance of what someone doeson the job versus what they bringto the job (DeNisi & Griffin, 2016). Employees who feel like theyare valued for what they do while working for a company are more likely to work harder and overall perform better.Employees are paid an annual salary, versus hourly and compensation packages for executives are determined by a board of directors.Employee compensation packages include a competitive salary along with a competitive benefits package.The benefits package includes mandated and nonmandated benefits, such as:
COMPENSATION PLAN OUTLINE3access to dental and eye insuranceinitial 17 days of paid time off, which will increase over time11 federal holidays paid offretirement plans (401k)annual profit sharingEmployee Assistant Programtuition reimbursement (max of 3,000/yr.)monthly gym membership reimbursementdiscounts on specified hotels and car rentalsJames River Insurance Company also rewards employees via yearly bonuses, salary increases and incentives, which will be discussed later.James River Insurance Company operates by using the differentiation strategy as their competitive strategy, where the objective is to produce products or offer services that are different or hard to get from competitors (Martocchio, 2017).This strategy requires qualified and knowledgeable employees be at the forefront.James River Insurance Company’s compensation plan is appropriate because it ensuresequity, motivates employees and controls compensation costs.