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    1. Assignment 2: Compensation Plan Outline
      Using the same company you researched


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    1. Assignment 2: Compensation Plan Outline
      Using the same company you researched in Assignment 1, evaluate the company?s compensation plan to determine how it could be improved.

The company used is GOOGLE

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.
    • I have included a copy of the first assignment

Running head: COMPENSATION PRACTICES

 

1 Compensation Practices

 

Barbara Minnis

 

Bus 409

 

August 27, 2016

 

Professor Keith Lipscomb COMPENSATION PRACTICES 2

 

About Google Google, Inc. was founded in 1998 by Larry Page and Sergey Brin. The company started

 

out as nothing more than a search engine and has grown to include Google Doodle, AdWords,

 

Gmail, Google Maps, and Google Earth. They also launched Andriod, an open platform for

 

mobile devices that is used on multiple tablets and smart phones and Google Chrome, an open

 

source browser. In 2011, the company introduced the Google+ project, with the intentions of

 

bringing the richness and nuance of real-life sharing to the web and improve Google overall by

 

including people, their interests and relationships (Google, n.d.). The company has grown

 

significantly in the industry of internet information providers in a short amount of time.

 

Compensation Strategy

 

Given the right compensation strategy, a company can attract and retain critical

 

employees. Compensation can include both monetary and non-monetary components to include

 

salary, health insurance, retirement plans and performance bonuses. Google goes the extra mile

 

to attract the top talent in the industry and was ranked first in Glassdoor?s Top 25 Companies for

 

Compensation & Benefits by their employees although they do not pay their employees the most

 

(Welch, 2014). Although Google offers competitive compensation packages, it is the perks that

 

give them an advantage over competitors when it comes to recruitment. At the Googleplex,

 

employees enjoy free of charge, on-site haircuts, a gym, laundry facilities, dry cleaning services,

 

and free meals and snacks. In addition to the free stuff, Google subsidizes child care and a

 

massage program to help employees out. Google believes that if they keep employees happy,

 

then they will be more productive. Their compensation strategy is based off of this belief

 

(Strickland, 2008).

 

Best Practices COMPENSATION PRACTICES 3 Principle recruiter for Google Engineering, Bob See, claims that Google has a unique

 

strategy for determining what compensation to offer employees and will not negotiate

 

compensation packages unless the person?s current compensation is higher or if they have a

 

current offer that is better (Gillett, 2015). Google determines candidates by gathering current and

 

competing information from the candidate and putting together a standard offer package based

 

on established ranges for the level of the position, location and role. The standard offer package

 

includes base salary, bonus, and restricted-stock units. Google does not make offers below the

 

standard range, so even if the candidate?s current compensation is significantly lower, Google

 

will not change their offer. Any changes offered above the standard offer package must be

 

approved by the business unit?s senior vice president (Gillett, 2015).

 

Compensation-related Challenges

 

At first glance it does not seem like Google has any compensation related challenges

 

especially since they offer a substantial compensation package. Unfortunately, after an employee

 

leaked a salary sheet, Google?s was accused of paying unfairly. This accusation was confirmed in

 

by Laszlo Bock in his book, ?Work Rules?. In an attempt to retain top talent, Google

 

implemented a counterintuitive strategy to pay unfairly (Feloni, 2015). The strategy resulted in

 

two people who were doing the same job to have significantly different compensation. Another

 

challenge that the company faces is that competitors and new companies are offering top talent

 

more than they are willing to give.

 

Impact on Company and Stakeholders

 

Google applies compensation practice to recruit the top talent for the company. By

 

retaining the top talent, the company maintains a competitive advantage over their competitors,

 

and increases the company?s productivity and innovation. Increased productivity and innovation COMPENSATION PRACTICES 4 result in increased revenues. This is the positive impact that compensation practices have on the

 

company and stakeholders; it brings more money into the company.

 

Compensation practices can also have a negative impact on companies and stakeholders.

 

If the company over stretches themselves in trying to recruit and retain employees, it can affect

 

their finances negatively. It is rumored that Google spent so much money on perks and benefits

 

such as free food that it was costing the company more than they were making. This makes it

 

hard for the company to meet their financial obligations and lowers the returns that stakeholders

 

get. In this scenario, the company has to make a decision whether to cut the benefit and have a

 

negative impact on the employees or take a hit financially and upset investors. Neither is an ideal

 

solution for the company.

 

Laws, Labor Unions, and Market Factors

 

There are several laws in place that regulate the compensation that employees receive.

 

The Equal Pay Act allows companies to compensate on seniority or merit and prohibits

 

compensation being based on gender. The Fair Labor Standards Act regulates the minimum wage

 

that employees are paid, overtime wages, equal pay and child labor (Johnson, n.d.). Google is

 

not impacted currently by labor unions as there is not one in place within the company. Market

 

factors do however affect compensation practices. If Google is not doing well in the market, it

 

must cut the compensation that it provides for employees. If other industries are offering

 

employees more, Google must do the same.

 

Effectiveness of Traditional Base Pay

 

The traditional bases for pay are merit and seniority. At this time, most of Google?s

 

employees are paid based on merit and performance. Employees who feel they are getting

 

compensated adequately are more productive, which is beneficial for the company. Given COMPENSATION PRACTICES 5 Google?s current level of success, it can be said that the compensation is effective in this area.

 

The company does not actually pay based on seniority. This has caused some problems for the

 

company as senior employees feel as though they should be compensated for the time they have

 

remained loyal to the company especially in such a competitive industry. COMPENSATION PRACTICES 6

 

References Feloni, R. (2015, April 4). Inside Google's policy to 'pay unfairly' - Business Insider.

 

Retrieved from http://www.businessinsider.com/google-policy-to-pay-unfairly2015-4

 

Gillett, R. (2015, July 10). Google's compensation formula - Business Insider. Retrieved

 

from http://www.businessinsider.com/googles-compensation-formula-2015-7

 

Google, Inc. (n.d.). Company ? Google. Retrieved from

 

https://www.google.com/about/company/

 

Johnson, R. (n.d.). Importance of Compensation in the Workplace | Chron.com. Retrieved

 

from http://smallbusiness.chron.com/importance-compensation-workplace38470.html

 

Strickland, J. (2008, August 4). How the Googleplex Works | HowStuffWorks. Retrieved

 

from http://computer.howstuffworks.com/googleplex.htm

 

Welch, C. (2014, May 23). Google offers employees best pay and benefits, according to

 

new survey | The Verge. Retrieved from

 

http://www.theverge.com/2014/5/23/5744614/google-offers-best-pay-benefits

 


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      Using the same company you researched .zip

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