MGT2388 Compensation Management

Objective of this Assignment:  To demonstrate knowledge and understanding of the process of choosing a compensation model that fits within the organizational setting and framework.

For this assignment, read the following scenario:

For more than 10 years you have been a human resources manager at a recently unionized tool manufacturing company. Your company is home to more than 50 employees, ranging from machinists to metal fabricators, to accounting and inventory clerks.  Your firm has built a reputation of quality, and the relationships of your long-time employee team with customers are a key pillar of your client service strategy, as well as the willingness of most clients to pay above market norms for your products. Simply put, your products are high-quality, your team is solid and so is your reputation.

Given the recent unionization, you have determined that the operating environment is far too challenging to sustain your previous approach of simply ‘leading’ in reference to your pay position, and providing benefits and performance pay for achieved targets. You decide to implement a formal compensation system that aligns to your recently negotiated employment contract. Challenges the organization faces include the need to consider performance pay for unionized workers. Everyone at the company has the same benefits package and it seems to be "ok" however no one has ever checked how their benefits compare to other firms or how employees feel about their benefits. Many employees have been with the company for a long time and are aging. Workforce demographics must be considered now and for the future and this may affect your compensation strategy

Your Assignment:

1. Create  written rationale that outlines the key factors of why the company must evolve its compensation system to meet current and future challenges.

2. Create a checklist that your team will use to ensure that the chosen system is deliberate and considers the factors that are most applicable to your environment (10-12 points i.e. job design, evaluation, compensation position, etc.).

3. Finally, draft a summary of your proposed inventory review process of the compensation system, detailing how it would unfold by  explaining the relevance of the items that you chose to include in the checklist, how they will be applied, and how it will support the fit of your future compensation system.