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Running head: COMPENSATION PLAN OUTLINE 1 Assignment 2: Compensation Plan Outline Shauna Frierson Compensation Management- BUS 409- Professor Fitzpatrick February 24 th , 2018
COMPENSATION PLAN OUTLINE 2 Assignment 2: Compensation Plan Outline A 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 is paid 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 for James River Insurance Company James 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 does on the job versus what they bring to the job (DeNisi & Griffin, 2016) . Employees who feel like they are 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 OUTLINE 3 access to dental and eye insurance initial 17 days of paid time off, which will increase over time 11 federal holidays paid off retirement plans (401k) annual profit sharing Employee Assistant Program tuition reimbursement (max of 3,000/yr . ) monthly gym membership reimbursement discounts on specified hotels and car rentals James 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 ensures equity, motivates employees and controls compensation costs .

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