Quiz 11: Strategic Pay Plans 


Overtime refers to the compensation provided by an organization to its employees in lieu of extra time put by him for performing the duties or completing the Job. The companies in earlier time used to pay hefty overtime as the amount of overtime was very high because all the jobs were performed manually. But with the advancement in technology communication this has decreased extensively as now most of the work is performed using machines. According to the FLSA act the companies have to pay overtime compensation fairly if the employee is working more than 40 hours a week. However today the companies have a lot of flexibility which does not demand overtime pay rather companies provide compensatory off, other incentives and focus on the job done instead of time. All these things do not make sense for a work week of 40 hours strictly. As the law was created to stress on that the physical labor of more than 40 hours in a week should not be done by workers, but if they do they will be compensated. But today all job is performed via machines so 40 hour work week is of no essence. Changing to a pay period for calculation of overtime in today's scenario is a good option available as it seems to be a win-win for both the employees and employers. It provides them with flexibility.

The compensation refers to the monetary non-monetary rewards provided by companies to attract, motivate retain employees. The compensation plan of the company X consists of the Salary which follows the equity theory that means is in equity with other players in the industry. However the variable part of the salary was also there which was based on performance and also attracted huge talent to apply for the organization. It has the policy to provide the variable pay in the form of coupons like sodexo, discounts at food joints, or retail outlets. Also they use to provide on quarterly basis the employees with some gifts like microwaves, Cross pens, gold coins etc. They also used to run various contests within the organization and the best performers get rewards in the form of recognition, certificates, banner display of pictures, website display and also the cash rewards were there. After every financial year a hefty amount was given to employees based on their yearly performance ratings.

The compensation refers to the monetary non-monetary rewards provided by companies to attract, motivate retain employees. The compensation plan of the international employees can be designed using a variety of methods to ensure equity. While designing the compensation of various employees across the globe the HR manager should consider the legal requirements with regard to pay structures in those countries and accordingly design them. They can consider various pay surveys in the country of operation which are industry specific as well as from other industries and then design their which will motivate the employee. HR could also conduct the surveys within their organization at different locations to understand what motivates the different employees and accordingly design the same. For example in country X there is a legal requirement to pay x amount of salary as fixed part and variable pay can be paid if company wants. So in this country they have to design the compensation as per this rule. While in country c there is no obligation of fixed amount so company can use maximum variable pay linked to performance. Thus the compensation will vary according to the country of operation.

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