Employee Compensation and Benefits
HRM 530 Assignment 5
Section 2: Presentation
– Compensation Plan Objectives
– Compensation Plan
– Compensation Structure
– Intangible Rewards
– Exempt Status
– Overtime Policy
– Future Benefits
– Internal Equity
– External Equity
– Organizational Comparison
– Government Regulations
– Legally Required Benefits
– HRM Strategy
– HRM Strategy Alignment
Presentation Index Cont.
Organization : Small Advertising Agency
Job Position: Office Assistant
Fixed Location (No Travel)
Overview of Position
Attract High Quality Applicants to Position
Motivate High Performance
Retain Employee (minimum 3 years)
Achieve Internal and External Equity
Contribute to Company Goals / Proftitability
Compensation Plan Objectives
Components of the compensation plan offered the Office Assistant include
Hourly Wage Rate
Retirement 401k (Employer matching funds)
Annual Raises and Bonuses
Health Insurance Plan
Paid Time Off
Employee Compensation Plan
Hourly Wage Rate -$22
Annual Increment on Base Pay – 5%-10%
Medical Allowance -$1500
Annual Bonus Paid -$5000
Stock Options (Discounted Rate) – $1000 in stock options
Retirement/ 401k – 6% Employer Match
Tuition Assistance Allowance Quarterly – $1100
Paid Days Off – 22 Days
Employee of the month (Parking/ Recognition)
Access to Networking Events
According to the Fair Labor Standards Act (FLSA) an Employee can be Exempt or Nonexempt based on Job pay and Job description and responsibilities.
For our Office Assistant they will be hourly employee without any direct reports to them.
In this scenario the office assistant would be nonexempt and eligible for overtime after 40 hrs.
Exempt / Nonexempt Employee
The office assistant will be an hourly employee
The position will be eligible for 20 hrs of over time per month.
Over Time Policy
Paid Gym Memberships
Corporate Memberships / Discounts
Benefits Considered in the Future
The employee will receive the base compensation elements offered to the rest of the staff starting day one.
Have also done a compensation review of internal employees to determine if the company as a whole is at, below, or above market levels.
The organization has conducted pay surveys amongst its competitors in the market place.
Proposed compensation structure competitive in the market place.
Wages, benefits are at market or above market averages for an office assistant.
Health Care (no dental)
No Tuition Assistance
Paid Time Off
Paid Time off
401 K / Retirement
No 401 k / Retirement
Comparison to two external companies compensation plan for a similar position.
Some Laws that need to be considered when designing the compensation structure are as follows
ADA (American’s with Disabilities Act
Age Discrimination Act
Omnibus budget reconciliation act
Health insurance act
Family and medical leave (FMLA)
Legally Required Benefits
Employee must meet certain qualifications
High pay will be dependent upon talent and qualification
Education and training will be offered
Employee will be offered competitive performance-based pay
Constant monitoring for feedback
Employee satisfaction through enticing benefits package
HRM Strategy Alignment
HRM needs to consider all positives and negatives when including a element in the compensation structure.
Company must take into consideration the updates in legal requirements to adapt it to the company.
Compensation structure needs to compliment the over all HRM Strategy.
Compensation Structure meets internal and external equity requirements.
Designed to attract, retain, and motivate potential employees
Legally sound structure with low risk
Subject to yearly review
Sibson, R. (1990). Compensation (1st ed.). New York, NY: American Management Association.
Graham, M., Roth, T., & Dugan, D. (2008). Effective executive compensation (1st ed.). New York: AMACOM/American Management Association.
Gerhart, B., Minkoff, H., & Olsen, R. (1995). Employee compensation: Theory, practice, and evidence.
Sba.gov,. (2014). Optional Employee Benefits. Retrieved 6 June 2015, from http://www.sba.gov/content/optional-employee-benefits
HR Manager – Andrew D Martin
Work # 800-922-0204
Cell # 207-431-5808
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HRM 530 Assignment 5 Employee Compensation and Benefits.pptx