Base Pay and Employee Rewards: Wal-Mart and PG&E
Team DHRM/324 – Total Compensation
Introduction
Two companies covered are Wal-Mart and Pacific Gas & Electric Company (PG&E)Pay strategies used by each company and their key objectivesHow does pay drive organizational objectives? Do unions play a role in these pay strategies?Direct and indirect reward plans incorporated by each companyTotal reward plans that each company offersAnalyze similarities and differences between the existing plansCompare each company to determine which has better aligned pay and rewards
Pay Strategies
Pacific Gas & Electric (PG&E)
Incentive PayDispenses performance-based compensation as a one-time payment.Determined by the achievement of specific goals and objectives.Encourages higher productivity.
Wal-Mart
Merit PayDispenses raises to base pay in accordance with high performance.Determined by performance reviews and metrics. Encourages high performance.
How Pay Drives Organizational Objectives
Wages are increased when the company is profitableEmployees receive additional pay when goals are achievedUnion can influence merit pay ratesPay is specific to an individuals role and responsibility
Image Reference: Linked in. (2018). Retrieved from https://www.linkedin.com/pulse/multi-functional-organizations-common-objectives-met-your-velez
Direct and Indirect Reward Plans for Pacific Gas & Electric Company (PG&E)
Direct
Performance bonusesVacationPaid time off (PTO)Paid HolidaysSick days
Indirect
Employee discountsHealth, dental, vision, and life insurance(s)Flexible spending account (FSA)Health savings account (HSA)401k, retirement, and pension plans
Direct and Indirect Reward Plans for Wal-Mart
Direct
Performance bonusesVacationPaid time off (PTO)Paid HolidaysSick days
Indirect
Employee discountsHealth, dental, vision, life and supplemental life, disability, occupational accident, accidental death & dismemberment insurance(s)401kEmployee stock purchase plan and stock optionsMobile Phone discountVariety of assistance programs
Total Reward Plans
Walmart
Competitive payHealth Care – medical, dental, vision, spending accountsFinancial Well-being (401K, stock plan, AD&D insurance, Short & long term disability, etc.)BonusesMerchandise DiscountsAdvancementEducation & TrainingScholarships & Tuition grantsPTO (Vacation, sick pay, holidays)Workers Compensation
PG&E
Competitive payCommuter transit programHealth Care – medical, dental, vision, mental, health coaches, addiction programsFinancial Well-being – 401k, will & estate planning, wellness programs, short & long term disability, AD&D insurance, etc.Tuition reimbursementVacation (in add’l vacation buy program), holidays, sick pay, floating holidaysEmployee discountsChild Care & Nursing Mothers’ roomsWorkers CompensationEducation & TrainingAdvancement
Similarities Among Plans
Similarities / Direct Bonuses PTOVacations/ Sick/ HolidaysSimilarities / Indirect401k plansHealthDental Vision
Image Reference: ExecuNet. (2017). Retrieved from https://www.execunet.com/critical-components-executive-compensation/
Differences Among Plans
Differences / Indirect Flexible Spending Account (FSA)Health Savings Account (HSA)Day care & Nursing roomsDisabilityOccupational accidentAfter death & Dismemberment (AD&D)Stock purchase plans
Image Reference: Linked in. (2018). Retrieved from https://www.linkedin.com/pulse/compensation-benefits-tharwat-mohamed-ayad
Are Expectations Met?
Burned out, need a breakFeeling sickWant to gain more education, but how will I pay for it?I want to retire!Hurt & can’t workWill my family be taken care of?
Take a paid vacationDon’t worry we got you coveredWe have tuition reimbursementWe offer 401KYou can use your short &/or long term disability AD&D insurance
Better Aligned Pay and Rewards
Wal-Mart
Sales Associate – $9.41 p/hourCashier – $9.37 p/hourAssistant Store Manager – $47,546 yearlyAssistant Manager Trainee – $60,330 yearly
PG&E
Customer Service Rep – $54,826 yearlySenior Engineer – $107,326 yearlyProject Manager – $97,175 yearlyIT Project Manager – $139,354 yearly
Conclusion
PG&E focuses on an incentive pay strategy while Wal-Mart bases theirs on a merit pay strategyPay drives organizational objectives as employee compensation increases when they complete company objects and unions can affect merit payPG&E and Wal-Mart both offer similar direct pay compensation methods, such as performance bonuses, PTO, paid vacation, sick, and holidaysSimilarities with indirect compensation includes medical insurances like health, dental and vision, and offer 401k optionsPG&E offers indirect compensation options like Flexible spending account (FSA) and Health savings account (HSA)Wal-Mart offers indirect compensation options like disability, occupational accident, after death and dismemberment insurances (AD&D), and stock optionsAligned pay is better with PG&E, but Wal-Mart offers a larger variety of indirect compensation
References
Bureau of Labors Statistics. Health Savings Accounts. Retrieved from https://data.bls.gov/search/query/results?cx=013738036195919377644%3A6ih0hfrgl50&q=Health+Savings+AccountsExecuNet. (2017). Retrieved from https://www.execunet.com/critical-components-executive-compensation/ (Image)glassdoor. (2008-2018). Retrieved from https://www.glassdoor.com/Benefits/Pacific-Gas-and-Electric-US-Benefits-EI_IE15208.0,24_IL.25,27_IN1.htmglassdoor. (2008-2018). Retrieved from https://www.glassdoor.com/Benefits/Walmart-US-Benefits-EI_IE715.0,7_IL.8,10_IN1.htmLinked in. (2018). Retrieved from https://www.linkedin.com/pulse/multi-functional-organizations-common-objectives-met-your-velez (Image)Linked in. (2018). Retrieved from https://www.linkedin.com/pulse/compensation-benefits-tharwat-mohamed-ayad (Image)Martocchio, J. (2017). Strategic compensation: A human resource management approach (9th ed.). Upper Saddle River, NJ: Pearson.PG&E. (2015). My PG&E Benefits. Retrieved from http://www.mypgebenefits.com/Leader_Benefit_Info.shtml
References (Continued)
PG&E.com. Retrieved from http://www.pgecorp.com/aboutus/careers/benefits/PG&E (2018). Pacific Gas & Electric Company Salaries in the United States. Retrieved from https://www.indeed.com/cmp/Pacific-Gas-and-Electric-Company-(pg&E)/SalariesUnited States Department of Labor. Definitions of Health Insurance Terms. Retrieved from : https://search.usa.gov/search?query=Flexible+Spending+Account&utf8=%E2%9C%93&affiliate=u.s.departmentoflaborWalmart. (2018). Working at Walmart. Retrieved from https://corporate.walmart.com/our-story/working-at-walmartWalmart (2018). Walmart Salaries. Retrieved from https://www.glassdoor.com/Salary/Walmart-Salaries-E715.htmwww.researchomatic.com. Walmart Compensation and Benefits. Retrieved from: http://www.researchomatic.com/WalMart-Employee-Compensation-And-Benefits-111477.htmlYuan, K., Le,V., McCaffrey D., Marsh J., Hamilton L., Stecher B., Springer M. (2013, March). Incentive Pay Programs Do Not Affect Teacher Motivation or Reported Practices: Results From Three Randomized Studies. Educational Evaluation and Policy Analysis , 35(1), 3-22.
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