Strategic Compensation

The Plastic Company has been experiencing growth over the past three to four years due to the demand for small plastic parts that serve a variety of needs to their consumers. Even though company growth has been a positive trend, Plastic has been having recurrent Issues with high employee turnover rates for quite some time. One of the Job areas this has affected the most are the Machine Operators. John and Roy, the two managers, realize that In order to produce more products for Increased emends they must have the employees to make this happen.

The current culture at Plastic does not attract retention as employees are leaving for higher pay and the fact that they see Plastic as a “dead end job”. A strategic compensation plan needs to be developed not only to retain and attract new machine operators, but keep the ones that are already there. Strategic compensation is a tool that allows managers and leaders of organizations about how they can use pay in multiple forms to help organizations achieve their mission and goals. “Strategic compensation is when a cuisines attempts to better calibrate its levels of compensation to reward work and output.

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Often this involves establishing certain rewards for certain levels of performance. Strategic compensation often Involves a company moving beyond the typical salary or hourly wage and looking for more-Innovative ways to reward employees. Strategic compensation means creating an Incentive structure that directly rewards employees for their performance and skill. ” (Reader) more money elsewhere, they felt they were working at a “dead-end Job”, or that they could find better benefits elsewhere.

We also learned in exit interviews employees stated that they didn’t really know what their Job responsibilities were and felt that they were asked to do things that they were not qualified to do. One of the culture changes that must be done is to update employee and managerial Job descriptions. When looking at the importance of Job descriptions in the workplace, we also need to look at the Job analysis that must be conducted to reach the Job description. According to the text, “Job analysis, is a systematic way of gathering and analyzing information about the content, context, and human requirements of Jobs. . 125 (Human Resource Management, 13th Edition). The employees at Plastic are not happy with the current compensation and benefits they are receiving and are seeking this elsewhere. Compensation and Benefits is beneficial for a corporation to be able to thrive. Employees want to be rewarded and have the opportunity for advancement as well. Management needs to make sure they are paying their employees competitively and also recognize their accomplishments. Recognizing this is something Paul needs to address with John and Roy.

Employees that are looking at impasses to work for typically want to know what they will make annually/hourly. What kind of shift will they work? What are the hours, such as am to pm? Do they get an annual bonus depending on Job performance? How is the healthcare, what are the deductibles? This is so important to focus on in keeping employees. If they want to be competitive, they must look into offering the proper pay and benefits employees desire. This also goes along with their current Organizational and Management Factors. John and Roy obviously do not know their employees and are probably seen as poor managers.

If the employees do not see that the management at Plastic as being organized it would be hard to understand what is even going on themselves. This is beneficial to have a working relationship so that the employees feel able and comfortable around supervisors and are also able to have conversations that are kept confidential between them. The text states “A supervisor or manager builds positive relationships and aids retention by being fair and nondiscriminatory, allowing work flexibility and work-family balance, giving feedback that recognizes employee efforts and performance, and supporting career planning ND development.