Hrm 531 Week 3 Compensation and Benefits Strategy - Norfolk Southern

Compensation and Benefits Strategy

Compensation and Benefits Strategy

Compensation and benefits are very important to employees and potential candidates. Organizations can benefit from developing an attractive total rewards strategy to attract and retain employees. Norfolk Southern is on the right track, as they have developed a pretty attractive strategy for potential employees. The problem with the organizations plan, however, is that retention, especially in the operations departments, is not very good. Candidates are attracted to the benefits, but some find the positions too demanding and not worth the compensation and benefits offered.

Current Strategy

Retirement

Norfolk Southern (NS) currently offers a very attractive compensation package. Like all organizations within the railroad industry, NS employees are entitled to Railroad Retirement. Railroad Retirement takes place of social security for railroaders who retire from the industry. Railroad Retirement was developed during the 1930s by Congress to ensure adequate retirement benefits for retired railroaders. The tax paid by railroaders is known as the Railroad Retirement Tax Act, or RRTA, and is split into two tiers that provide for retirement benefits, death benefits, spousal benefits, and unemployment benefits. This benefit alone attracts many candidates to the railroad industry because it provides a clear and adequate retirement plan to those who stay with the industry (Whitman, 2008).

In addition to RRTA, management employees also receive a corporate pension and 401K plan. For those focused on finding a career with good retirement benefits, NS has definitely met the demand. Employees who retire with twenty years service or more and properly invest in their 401K can see retirement benefits of 100 to 110 percent of their highest earning years.

Health and Wellness Benefits

Health and wellness benefits are a must for employees today. In addition to the rising cost of medical care, the Affordable Health Care Act requires people to have health insurance coverage. For many, health insurance can be very expensive to pay for on their own, so they look to their employer for coverage. NS provides all employees with health insurance that is mostly funded by the company, with low payments required by the employee. In addition, the company also offers low cost dental and vision coverage.

Other Benefits

Norfolk Southern has incorporated other attractive benefits that it offers employees. Among these benefits is education reimbursement for employees who continue their education while employed at NS. The current benefit is $5125 per year for qualifying education. Qualifying education is any education in a field that relates to NS positions ("NS Employee Web Portal", 2016).

Another benefit that operations managers receive is a corporate vehicle and cell phone. Corporate vehicles can be a great benefit for employees as the company allows them to take them home and covers all fuel and maintenance costs. Corporate cell phones allow employees to have mobile communication without having to pay their own bill.