Business Research Report
Compensation Strategies for 2014
Assessment Code: RWT1
Table of Contents
This report reviews three different compensation strategies PepsiCo can develop and implement within all of our PepsiCo. Brands and businesses for our employees. Compensation is one of the most important and rewarding factors for our employees based on our organizational health survey conducted in 2011, so a thoughtful and thorough approach should be taken as we think about changing the way in which our companies reward our employees for the work they perform on a daily basis. Salary and hourly compensations are easy and constant ways of paying the employees of our companies. Salary and hourly compensation can be a set wages employees will earn based on their job description. This wage will not change based on seniority or merit. The stability of this type of compensation system is appealing to employees as they are aware of how much income they will receive on a regular basis. Hourly based pay has very little room for opportunity of growth for the employees. Commission/productivity based pay also known as performance based pay is a relatively common and popular approach to compensation where the employee is paid by the employer based on their job performance; this inspires them to do their best work on a daily basis and gives the employees control of how much they make to maximize their own income. With quality performance and high productivity, employers are able to increase profit and become more competitive. Longevity Pay is the last recommendation of compensation we as a company can consider for our employees. Longevity Pay is compensation based on the employee's length of service, seniority, or tenure. This compensation can be in the form of monthly amounts added to their checks, or annual bonuses on their employment anniversary date. This provides motivation to the employees to continue their employment and career with the company.
As a member of the human resources department in a PepsiCo. Manufacturing facility with 120 employees, I have been asked to evaluate different compensation strategies that are available for adoption within the PepsiCo. Organization. I have compared and contrasted three compensation strategies and determined recommendations for how they may be implemented within our organization.
I have selected three very different but potentially productive strategies I feel would best fit our business needs as well as the needs of our employees. The first is Salaried/Hourly compensation, second is Commission/Productivity based compensation, and last is Longevity compensations. All of these strategies have equal advantages and disadvantages and are based on the position for which the employee applies. In conclusion I have listed my recommendations for implementing each strategy.
Possible Compensation Strategies
a. Salaried/Hourly Compensation
Summary: Well established pay ranges provide structure for employees to learn their positions in the organization and ensures pay increases are administered impartially. “Salaried/Hourly compensation helps the organization to stay competitive in the job market as well as attracting and retaining talent.” (Besedes, Tibor, Cary Deck, Sudipta Sarangi, and Mikhael Shor - 2012). Salaried: Most salaried employees like the stability that making a set amount of money offers. With the salaried approach companies are better able to predict their payroll expenses. The disadvantage of salaried employment is the hours work verses the hours paid. More often than not the salary worker puts in more hours than an hourly employee and still gets paid the base pay without...
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