Compensation Management

COMPENSATION MANAGEMENT

CompensationManagement

HighSchool

Name of Company

From: TotalRewards Director

To: ChiefExecutive Officer

The company haselected to open a new foreign production plant in Mexico. The newplant will need to be operational by December 2016. Therefore, thecompany has decided to send 10 US-based employees to Mexico to beginoperations in the new plant. Therefore, it is critical to design andimplement a comprehensive international compensation program. Thiscompensation package aims to encourage upper-level managers and otherselected workers to accept the foreign assignment.

All of the tenexpatriate positions will be offered $80,000 monthly gross salary toensure consistency. However, fringe benefits will be provided to allemployees that take the assignment in Mexico. By default, allAmerican workers are entitled to certain benefits. The SocialSecurity federal program provides for retired or disabled employeesalong with certain dependents. The amount of social securityavailable to a worker depends on the level of earnings. Unemploymentcompensation is also due to workers as a weekly benefit. This benefitis payable when employees are out of work due to factors beyond theircontrol (Herod, 2009). Worker’s compensation is remitted in paymentof medical expenses incurred from occupational diseases orwork-related accidents.

As a generalrule, most of the benefits and employee contributions should be madepre-tax. Adopting this approach would allow the expatriates to payfor their portion of benefits using direct income before deduction ofUS taxes. Consequently, this would reduce the tax liability of theexpatriates (Herod, 2009). Health insurance should be offered tocater for medical expenses incurred while in Mexico. The health coverwould also include translator services in recognition of the foreignnature of the assignment. Moreover, preventive and restorative dentalcare could be assimilated into the health plan. Dependent Child LifeInsurance should be established so as to cover the families of theexpatriates, whether they relocate to Mexico or choose to stay in theUS. Short-term and long-term disability insurance should be providedwhere employees would be paid 60% ($48,000) of base pay for theentire duration of their incapacitation. This would cover forillness, pregnancy, and other non-work related injuries (Martocchio &ampBezuidenhout, 2014). An adjustment feature of 5% should beincorporated to cater for the annual rise in the cost of living.

Paid ParentalLeave should be offered to caregiving parents whereby they wouldreceive 100% of their salary for a year following the birth of achild. Business Travel Accident should be set at $350,000 in case ofaccidental death, loss of sight, or dismemberment when makingofficial company trips within and outside of Mexico. The companyshould set up a Retirement Plan by making monthly contributions of10% ($8,000) of base pay into a fund payable upon retirement(Bhattacharyya, 2009). Supplemental Retirement Accounts should be setup to let employees choose whether to make post-tax or pre-tax salarycontributions. Time offs would be granted based on the designatedholidays in Mexico. This would also be adjusted accordingly to makeallowance for travel needs (Martocchio &amp Bezuidenhout, 2014).Leaves should be extended as per Mexican labor laws. However, thecompany can set a maximum of 15 allowable days for each calendaryear.

The increase inglobalization of businesses has made it necessary for companies toexpand operations into foreign countries. Essentially, companies needto address the fears and challenges experienced in unfamiliarterritories (McNulty &amp Inkson, 2013). It would be proper for theorganization to establish an Employee Assistance Program gearedtowards offering resources, information, and counseling. Each of theten expatriates should be eligible for at most two counselingsessions per month on whatever issue.

Conclusion

As discussed,establishing a new plant is Mexico is necessary so as to expand thecompany portfolio. Nevertheless, the ten expatriates need to beenticed with reasonable benefits so as to take up the foreignassignment. The various categories of benefits include health cover,life insurance, disability insurance, retirement plans, and othermandatory benefits. Adopting these benefits would encourage the tenexpatriates to consider the plan along with their families carefully.

References

Bhattacharyya, D. K. (2009). Compensation management. NewYork, NY: Oxford University Press.

Herod, R. (2009). Expatriate compensation strategies: Applyingalternative approaches. Alexandria, Va.: Society for HumanResource Management.

Martocchio, J. J. &amp Bezuidenhout, M. L. (2014). Compensationmanagement. Harlow, UK: Pearson.

McNulty, Y. &amp Inkson, K. (2013). Managing expatriates: Areturn on investment approach. New York, NY: Business ExpertPress.

Compensation Management

COMPENSATION MANAGEMENT 5

There are as many companies that provide benefits to part-employeesas there are those which do not offer such benefits. However, in thearticle, there are a few companies discussed which provide variousbenefits to part-time employees. The benefits that each companyprovide are discussed below.

Target

Target is one of the few companies that offers benefits to part-timeworkers. However, the workers must work for the company for at least6 months before they are entitled to the health cover. The companyalso provides free flu vaccination to part-time employees, WeightWatchers discounts and a 24 hour nurse hotline (Kim, 2011). Employeesmust work for at least two and a half days a week in order to qualifyfor these benefits.

Starbucks

The coffee company offers both permanent and part-time employeescomprehensive health benefits. The part-time employees are entitledto tuition reimbursement, product discounts and paid vacations (Kim,2011). The company is considered as one of the best companies to workfor by Forbes. Employees are, however, required to work for at least20 hours every week for them to be entitled to the benefits.

Land’s End

The company offers vision, dental and life insurance benefits to itspart-time employees. Most of these part-time employees are hiredduring the holiday season. Additionally, the company offers onsitefitness facility and child care center for the part-time employees(Kim, 2011). Part–time employees also benefit from employees’discounts when buying the company’s products. Each departmentrequires an employee to work for certain weekly hours in order to beentitled to the benefits.

Whole foods

Employees on part-time basis at the company are entitled to healthinsurance. These are employees who work for 20-30 hours every week.The part-time employees also benefit from a 20 percent discount atthe company’s stores. Additionally, the part-time employees areprovided with a paid time off (Kim, 2011). Lastly, part-timeemployees from the company benefit from gainsharing, which is a planthat allows them to earn dividends at the end of every month.

Home depot

This is a company that offers part-time employees certain benefits.The benefits include vision, dental and a limited medial cover (Kim,2011). Employees are required to have worked for the company for atleast 90 days before they are entitled to the benefits. A criticalillness plan option is also in place for the part-time employees.

UPS

UPS provides part-time employees with medical cover, dental cover,as well as tuition assistance. (Kim, 2011). Health benefits are notavailable to the part-time employees until they work for at least 12months in the company.

Costco

The company provides the part-time employees with medical and dentalcovers. Employees must however work for at least 20 hours a week inorder to be entitled to the benefits. It is useful to note that thebenefits take effect after 180 days since the day of hire (Kim,2011). Part-time employees also benefit from the in-house opticalcenter for vision care, which they can use while working at thecompany.

Pros and cons of providing benefits to part-time employees

The benefits offered to the part-time employees such as the healthbenefits help in reducing absenteeism at work. It is also clear thatthe benefits increase the morale of the employees, hence increasingproductivity (Campling, 2012). Many employers substitute highsalaries with the benefits hence saving a lot of money that wouldhave gone to salaries. Benefits are also used as a bait forattracting and retaining quality employees who are an asset to theorganization (Life Office Management Association, 2011).

The benefits have some disadvantages as well. Health premiums havebecome extremely expensive and therefore organizations are finding itexpensive to offer health care benefits to part-time. Most of thebenefit plans are surrounded by legal issues due to poor planning andorganizations lose huge sums of money in legal proceedings (Campling,2012). It may be extremely hard for the part-time employees to haveloyalty since they keep on moving and hardly interact fully with theother employees.

Given a chance, I would provide my part-time employees with benefitssuch as medical cover and paid time-off. It is clear that the pros ofproviding part time employees with certain benefits are more than thecons. Employees will be motivated and this will lead to highperformance and increased productivity. There will also be littleabsenteeism at work since one of the effects of health cover isreduction in absenteeism.

References

Kim, S. (2011). 7 Companies Offering Health Care Benefits toPart-Time Workers. Retrieved from:http://abcnews.go.com/Business/companies-offering-health-care- benefits-perks-part-time/story?id=14805107#

Life Office Management Association. (2011).&nbspBenefits topart-time employees. New York: Life Office ManagementAssociation.

Campling, R. F. (2012).&nbspEmployee benefits and the part-timeworker: Legal and economic issues. Kingston, Ont., Canada:Industrial Relations Centre, Queen`s University.