Hrm 548 Week 5 - Reward and Compensation Plan

Reward and Compensation Plan

Harrison Corporation is a corporation based in the United States based corporation with units in Europe and South America. The company decided to create a business unit focusing on expanding into Central America. Within the recruitment and selection strategy, all upper management and supervisors should be familiar with rewards and compensation. This draft will cover how to determine base pay, reward considerations, and incentive packages.

Base Pay

According to the article Key Steps for Establishing a Sound Base Pay Program (Morrow, 2016), there are seven factors to look at when trying to determine base pay. The following steps can be a benefit to Harrison Corporation as a way to develop their base pay strategies. The first step in this process is to establish an understanding of the job followed by the job requirements. The second step in this process would be to determine the value of the profession since not all positions exist in every company. In this situation, the pay would determine base on the valve this particular job brings to the organization.

The third step is to do a market analysis to see what the industry is paying for people in this positions or similar to it. Therefore, this would need to be done on a horizontal and vertical level to determine the best pay scale for each type of movement within your organization. Since many organizations use salary surveys, this would be a good way to get the information needed to appreciate the competitiveness the of salary market. In the fourth step of this process, an employer would develop a salary structure with a minimum, midpoint and maximum scale (Morrow, 2016). One of the new things companies are doing now is establishing salary bands. Salary bands allow the employer to go beyond the 100% for the more seasoned employees.

The next step in this process is step 5, in this is the opportunity to devise a worthy and logical performance management process (PMP). The key to construction a successful PMP is to ensure the employees have a clear understanding of the expectations as it relates to their job performance evaluation.

Step six is the Merit Increase system, which includes factors such as market salary comparison and employee’s work performance. The final step is Salary management; this should be done on an annual base to review pay equity within the different department within the company. Following these seven steps will assistance a corporation in establishing a base pay system allowing them an opportunity to determine whether to have a job based or person-based pay structure. In a job-based pay structure the pay is determined by the responsibility of the job and sometimes the conditions and schedule time for the job; whereas a person-based pay, structure is determined by the understanding of the job responsibilities and task related to the job