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Running head: COMPENSATION PRACTICE1Assignment 1: Compensation PracticeShauna FriersonCompensation Management- BUS 409- Professor FitzpatrickJanuary 25th2018
COMPENSATION PRACTICE2Assignment 1: Compensation PracticeJames River Insurance Company (JRIC) is a publicly traded company who first opened their doors on July 1, 2003.James River operates as an Excess and Surplus carrier in the United States, and specializes in insuring hard to place insurance risks.In 2003, James River was assigned a rating of A- (Excellent) from A.M.Best Co and in 2016 A.M.Best Co.upgraded the rating to A (Excellent).For the past 5 years James River has been listed as one of the best places to work in the Richmond area by the Richmond Times-Dispatch and the Richmond-chapter of the national Society for Human Resources Management (“James River…”, 2018).The competitive and compensation strategy of the company have a lot to do with the accolades it receives.Strategic compensation refers to the design and execution of compensation systems to support both competitive business and human resource strategies (Martocchio, 2017).The selected compensation and competitive strategies of a company are vital its success.Competitive and Compensation StrategiesThe competitive strategy is typically the first strategy to be developed.From there, the human resource and compensation strategies are adopted.James River Insurance Company utilizes the differentiation strategy.This strategy’s objective is to produce products or offer services that are different or hard to get from competitors, thus gaining a competitive edge (Martocchio, 2017).JRIC aims to underwrite unusual, often hard-to-place commercial exposures, such as high-hazard products liability thatother insurance companies may deny.The human resource strategy refers to the human resource practices and processes and how they
COMPENSATION PRACTICE3relate to supporting the company’s objectives.The two compensation strategies that are utilized by JRIC are skill-based and pay for knowledge programs.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).