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The purpose of this paper is to discuss various aspects of employee compensation. There are many laws in place that help to protect workers and to help set some standards in fair compensation policies

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Introduction

Employee Compensation Michael Jack MGT 431 Joseph Ferrado DECEMBER 7, 2004 Introduction The purpose of this paper is to discuss various aspects of employee compensation. There are many laws in place that help to protect workers and to help set some standards in fair compensation policies. The practices of salary surreys and other mechanisms for determining what is fair compensation for specific employees will be discussed along with how comparable worth affects compensation policies and guidelines. Employee Compensation Law (FLSA) Employee compensation can be a complex and controversial subject. Compensation is the basis for why employees work. Many factors can play a role in how an employee's compensation is determined including: employee education, type of job (industry), job market conditions, geographic location, and many other factors. A major law that pertains to compensation is the Fair Labor Standards Act (FLSA) of 1938. The FLSA established a set of guidelines and rules that cover many legal aspects that employers must follow pertaining to employee compensation. FLSA was a set of laws put into place during the recovery of the great depression. ...read more.

Middle

There are also many private resources available. Salary.com is a private web based tool that employers and prospective employees can use to get guideline salary information for hundreds of job categories. Salary.com has an extensive methodology for gathering specific details on salary conditions for job type and geographic region. "To determine the market pay ranges, Salary.com's compensation consultants have collected and reviewed data covering more than 1.3 million individuals working at more than 5,000 companies" (www.salary.com) These tools allow employers to set proper pay ranges for the jobs they are offering and remain competitive as they are seeking talent in the available work force. Using salary surveys to determine what to pay an employee can be helpful when used as a guideline and not a hard rule. Perhaps an employer wants to attract and keep the most talented people for competitive reasons. Then paying above market may help to attain this goal. Other initiatives can be used to set pay and compensation for employees. In the world of high tech stock options are used as a means to keep people with the possibility that the options many have high value after a certain amount of time (usually 3 years). ...read more.

Conclusion

However covering your employees with options for different types of health plans and family coverage encourages both good health but is an incentive to keep good employees. 2. Stock options have been popular in many industries to keep good talent and even in these days where you don't see 25 year old paper millionaires too often they are a good tool in giving employees a part of the company and if the company successful the employee will be able to financially participate in that success. 3. The finally benefit I think employers should consider is some form of 401k or equivalent retirement savings plan. Whether or not the employer provides matching funds it is wise to allow the employee to contribute to a plan that encourages long term savings and can ease their tax burden As discussed employee compensation is a complex and multi faceted topic. Laws have been established to help make a relatively fair playing field for workers however there still is a lagging disparity in compensation for certain groups of individuals. And strong and fair benefit packages will not ensure the retention of good talent but certainly can help make an organization more competitive for seeking the best candidates for employees. ...read more.

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