Lockheed Martin Compensation Plan Outline
Compensation Management BUS 409
A compensation plan is the way and employer awards its employee for their efforts and it ensures that the employees stay with the company, in that they are satisfied over a longer period of time. This allows the employee a revision in salary, and incentives with time. It is a systematic way to plan the compensation for the employees.
Just like most companies there are salary employees and hourly employees. Lockheed Martin practices the same in this manner. Every position has a title or classification assigned by the Human Resource Department. Regular full time employees normally work 40 hours per week. They use the Kronos Workforce Timekeeper system for recording work time. Employees use their identification badges when clocking in and out. With overtime compensation it is based on the employee’s classification, as there are certain executive, administrative and professional employees that fall under the Exempt-Job Basis. For non-exempt classification employees who are covered by FLSA. They are compensated at the time and one-half rate for hours actually worked in excess of 40 hours per week. Lockheed Martin also offers Compensatory Time Off this may be paid in money or equivalent time off from work. Across the board this is pretty standard operations for major corporations and works well with in the Lockheed Martin system.
Beneficial Ratio of Internal and Market Consistence Compensations Systems
The Lockheed Martin embraces the pay for performance philosophy to set pay and targets at market levels, but pay incentive compensation to reflect actual performance increased abruptly in fresh years, chiefly as of mounting benefit prices. Lockheed Martin is operationally and financially stronger than ever. Their consistent performance is overwhelming the majority of programs, and the company’s ability to win new businesses across the board. They have sustained the momentum and financial strength throughout the years allowing for growth. As they focus on cash, operational excellence, and strategically place acquisitions in a current economic downturn, their stock holders say a total return of 32 %. This has led to an impressive 307 % total return over the past five years. Since compensation performs heavily affect recruitment, income, and worker output, it is significant that candidates and workers view these performs and are urged to read the proxy statement and cast their vote in accordance with the Board of Directors’ recommendations as it effects the incentive and pay for work performance held with the Lockheed Martin system. https://www.sec.gov/Archives/edgar/data/936468/000120677418000848/lockheed3346761-def14a.htm .
Present Pay Construction and Acknowledgement of Worker Contributions.
Lockheed Martin has a pay salary that only the top business managers are qualified for extras, as shown on the https://www1.salary.com/LOCKHEED-MARTIN-CORP-Executive-Salaries.html website where you will see that the top executives have equity, as compensation and other. For hourly employees they are under the Performance Review system. The employee’s immediate supervisor evaluates and rates the employee’s performance and discusses threating with the employee periodically. The Performance Evaluation is also reviewed and signed by a higher level supervisor. The purpose of the Performance Evaluation is to provide the employee with an honest appraisal of the current work performance as well as provide guidance form improvement. An employee must receive a satisfactory evaluation in order to receive a merit pay increase.
Two Recommendations For Cultivating The Efficiency Of The Flexible Benefits
In an article from Lockheed Martin as of September11, 2018 Lockheed Martin listed on the web that they had closed their pension plan to new participants in 2006 for the 401K plan and they expect that by 2016the majority of their employees will not be pension participants. They say that taking these actions will help offset the significant pension cost growth being driven by the increased life expectancy of retirees. This allows for managing the cost growth of its pension fund to ensure they remain a strong and competitive company for the long term. https://www.lockheedmartin.com/en-us/employees/pension-plan-change-faqs.html
Offer a 401B plan to its employees. Because Lockheed Martin gets some of it’s funding from the government in the form of aerospace missile assignments. They should fall under the guidelines of the 403B retirement plan it that it is offered to employees of government and tax exempt groups, such as schools, hospitals and churches. This is where the employees are eligible to defer money from their paycheck. This plan is also sometimes offered as Roth plans of tax sheltered annuity plans. There is a benefit for the employee to have this plan. For example, an employer matches funds at 50 percent of any employee contribution up to 6 percent of his or her salary. If an employee earns $75,000 and contributes 6 percent per year, the employer contributes $2,250 per year, which is essentially free money toward the employee’s retirement. This helps employees exceed the annual maximum
contribution limits, receive tax deductions and accelerate their retirement goals. All employee contributions are limited to $18,500 per year, as of 2018. The combination of employee and employer contributions are limited to the lesser of $55,000 per year, as of 2018, or 100 percent of the employee’s most recent yearly salary. This would eliminate having to end the 401K plan that Lockheed Martin had in place.
Lockheed Martin also stated that they only eliminated this retirement fund for the U.S. based employees, because employees based internationally have different retirement benefit programs, which are subject to country specific laws and regulations. If these regulations and laws benefit the company in a money saving way, why not introduce these retirement plans to the U.S. employees
Lockheed Martin currently has a pension plan that is annuity based on average pay and years of service. For Salaried savings plan 401K plan the company matched contributions up to 4 %. They changed this plan in January 2016 where Lockheed Martin Retirement saving Program automatically contributes 2 %. Beginning January 1, 2020 the pension plan with pay as of January 1, 2016 service as of January 1, 2020. Salaried Savings Plan 401K the company will match contributions up to 4 %. Lockheed Martin Retirement Savings Program automatic company contributions 6% =Lockheed Martin contributes up to 10% of your salary for retirement.
Health insurance programs and company’s major competitors.
Lockheed Martin allows their retired employees access to view their pension plan, health care plan and other retiree benefits via logging into the network. The health care plan allows a discounted rate for continued coverage. After modeling individual health care coverage for post-age 65, Medicare-eligible retirees and their spouses/same-sex domestic partners, the Company found that moving from the current Lockheed Martin retiree health care coverage to a private Medicare exchange will provide retirees with more choices, greater flexibility.
Lockheed Martin 2018 Proxy Statement
https://www.lockheedmartin.com/content/dam/lockheed-martin/eo/documents/annual-reports/2018-proxy-statement.pdf Retrieved 24, February 2019
Employees Pension Plan Change Frequently Asked Questions https://www.lockheedmartin.com/en-us/employees/pension-plan-change-faqs.html
Retrieved 24, February 2019
Lockheed Martin Board of Directors Pay https://www.sec.gov/Archives/edgar/data/936468/000120677418000848/lockheed3346761-def14a.htm . Retrieved 24, February 2019
Lockheed Martin Corp Executive Salaries & Other Compensation https://www1.salary.com/LOCKHEED-MARTIN-CORP-Executive-Salaries.html
Retrieved 24, February 2019
Lockheed Martin Corporation 2008 Annual Report https://www.lockheedmartin.com/content/dam/lockheed-martin/eo/documents/annual-reports/2008-annual-report.pdf Retrieved 24, February 2019