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Assignment 2: Compensation Plan Outline
(I did a small business plan on my Shape Fitness Center) Assignment 1
Using the
same company you researched in Assignment 1, evaluate the company’s
compensation plan to determine how it could be improved.

Write a six to eight (6-8) page paper in which you:

  • Evaluate the existing compensation plan to determine if it is the most appropriate for your company. Explain your rationale.
  • Determine
    the most beneficial ratio of internally consistent and market
    consistent compensations systems for the company you selected.
  • Evaluate the current pay structure used by your company and assess the recognition of employee contributions.
  • Make two (2) recommendations for improving the effectiveness of the discretionary benefits provided by the company you selected.
  • Evaluate
    the types of employer-sponsored retirement plans and health insurance
    programs provided by the company you selected and compare them to that
    company’s major competitors.
  • Use at least three (3) quality references. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

  • Be
    typed, double spaced, using Times New Roman font (size 12), with
    one-inch margins on all sides; references must follow APA or
    school-specific format. Check with your professor for any additional
  • Include a cover page containing the
    title of the assignment, the student’s name, the professor’s name, the
    course title, and the date. The cover page and the reference page are
    not included in the required page length.

The specific course learning outcomes associated with this assignment are:

  • Evaluate
    the effectiveness of traditional bases for pay (seniority and merit)
    against incentive-based and person-focused compensation approaches.
  • Compare and contrast internally consistent and market-competitive compensation systems.
  • Evaluate the role of benefits in strategic compensation.
  • Use technology and information resources to research issues in compensation management.
  • Write clearly and concisely about compensation management using proper writing mechanics.

Grading for this assignment will be based on answer quality, logic /
organization of the paper, and language and writing skills,


few days ago, I posted an announcement that answered questions about
Assignment 2.  A common question that often comes is, “I can’t find
specific information about a company’s compensation plan.”

in mind that a compensation plan is a broad topic.  It includes
incentives, benefits, and other aspects of an employee’s total
compensation.  Specifics regarding how much people are paid, pay scales,
etc., are not going to be published.  But this isn’t the only aspect of
a compensation plan.  You have to look at what a company is doing in
terms of all areas of compensation.  

key to most of the questions in this assignment is making “educated
assumptions.”  What I mean is, you have to look at what information is
provided and make the connections to the concepts discussed in the
textbook.  It’s like the discussion question that dealt with
discretionary benefits.  Companies don’t usually pull benefits out of a
hat, there is usually a reason most benefits are offered.  For example, a
wellness program might improve the health of employees, which in turn
decreases the claims to the health insurance carrier thereby decreasing
the company’s costs.  

key to this assignment is making those connections between what you
know about the company and what you know about the concepts discussed in
the textbook.  As I’ve mentioned before, we have to think like a
company executive, not an employee.  Of course an employee wants lots of
benefits, bonuses, high pay rates, regular increases, etc.  But this
isn’t reality and we need to address why compensation decisions are made
by a company.  This requires analysis and connecting what a company is
doing to what you know about strategic compensation.

this isn’t a biography of a company.  We’re past that type of essay;
rather, we need to apply analysis and make interpretations of the data
we uncover with thorough research.

Assignment 2

Posted on: Wednesday, May 27, 2015


I did with Assignment 1, I wanted to share with you some questions I’ve
received and my answers that concern Assignment 2.  Perhaps these
questions are ones that you share as well!  If you have different
questions about this assignment, please let me know!

Question: I need some clarification about the second question of the assignment.  What is meant by a “beneficial ratio?”

question 2, you’ll need to review the information that is chapter 6 and
chapter 7 in the textbook.  You’ll need to evaluate the company that
you are researching and determine how the company should balance
internally consistent compensation systems and market competitive
systems.  A company that wants to be a market leader in compensation,
may rely more heavily on compensation surveys, wage data, etc. to stay
ahead of their competitors in terms of compensation.  On the other hand,
maybe a company just wants an equal balance, they just want their
compensation levels to be near the same rate as competitors.  Job
analysis and job evaluation are important components of internal
consistency, as is performance appraisals.  You have to think about how
easy or difficult it is for the company to recruit employees and the
need to retain employees.  Companies have different needs and concerns,
which dictates whether they strike an equal balance between internal
consistency and market competitive systems, or they have issues that
might need more emphasis one direction or the other.  So a “beneficial
ratio” means how the company uses one system more, less, or equally with
the other system.

Question: Can you explain what you’re looking for in question 3?  I can’t find specific pay structures for my company.

question 3, you’ll need to review the information that is in chapter 8
of the textbook.  A pay structure is a way to assign pay rates to jobs
and provides a way to recognize individual employee contributions.  This
is where we discussed pay grids, merit pay systems, commission-based
pay, and person-focused programs.  Again, you would need to provide your
analysis based on what information you uncover in your research as to
whether these systems might be in place.  This type of information is
not always provided by an organization, so you may have to make
assumptions and predictions based on what information you do find.  For
example, if you see that the company strongly encourages cross-training,
job development, etc., you might assume they have a person-focused
policy in place.

Question: For question 4, should we list all of the benefits offered by the company?

 You can certainly mention examples of some of the benefits that the
company offers, but long lists are not necessary.  The question doesn’t ask
“what benefits does the company offer,” it asks you to recommend
improvements to their discretionary benefits.  Whenever you offer
recommendations, it is vitally important that you provide rationale.  Is
there research that supports why a particular benefit should be
offered?  How will it improve the company?  That last question is
important because we must look at benefits from the perspective of the
company, not necessarily the perspective of the employee.

you write this paper, just remember that you don’t work for the public
relations department, rather you should think of yourself as an
independent consultant.  Also, sometimes we have to do things that may
not be in the best interest of the employee, but is in the best interest
of the company.  Companies can’t always pay top dollar or offer
extensive benefits and perks.  For some, to do so might bankrupt the
company, which is not a good thing for the employees!

I hope you find this information helpful

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