Organizational Analysis Part 2

Assignment 2: Organizational Analysis Part 2

Human Resource Management

(Assignment 2)

Bass Pro was envisioned back in 1971, by John L. Morris after he seen the bass tournament circuit, and all the modern tackle that was being used by the pros. He then realized that there wasn’t a supplier for the new tackle in the Springfield, Missouri area, so he decided to supply exactly to this new market and founded Bass Pro Shops by offering this particular selection of bass fishing equipment. (Bass Pro Shops, 2011, p.3)

Today Bass Pro has more than 58 stores nationwide. (Bass Pro Shops, 2011, p.3) With that many stores there is a need for making informed human resource decisions with in this organization compensation practices. The reason for this is because it has a great effect on their competitiveness. Richard Henderson, which is a compensation expert, said, “To develop a competitive advantage in global economy, the compensation program of the organization must support totally the strategic plans and actions of the organization.” (Employee Compensation, 2012)

The cost of labor has effects on the competitive advantage of any company no matter how big the company is. Cost of labor represents an immense portion of its operating budget. An organization of this size effectively controls this cost, if it is done correctly it can achieve cost management. Labor costs of competitive advantage are strong in service and other labor intensive organizations. All employees spend between 40 to 80 cents of each dollar made for the revenue. This means that for every dollar of revenue made, each employee may pay as much as 80 cents to pay and benefits. (Employee Compensation, 2012)

The compensation costs have rose sharply in the last decade; the reason for this is of ever-increasing benefit costs. Employers spend more than $1 trillion on these benefits for their employees. In 2003 the Society for Human Resource Management stated that benefit cost around 39 percent of the overall payroll in 2001, this was an increase of 2.5 percent form 2000. So with the increase employers provide about $18,000 in benefits to each employee every year. Out of all the cost the biggest increases has been in health benefits, which have rose on average of 12 percent every year for the past few years. (Employee Compensation, 2012)

The organization should contain this increasing cost if it wants to get a suitable return on its human resource investment, by doing this it will gain the competitive advantage. When the related cost of compensation escalate, the organization must find ways to equipoise them. In the past companies passed the upturn of cost to the customer in the form of higher prices. By doing this companies will not gain any competitive