MGMT449 Blog - Cassidie Parker

If given the opportunities to work internationally there are many variables and factors that I would take in to consider before pursuing the opportunity. As this can be a huge move for my career and personal path as it requires logistics to be addressed in terms of relocation, the scope of the job, duration, and how I will be compensated for the position.

As learned from the textbook reading HR professionals construct international compensation packages based on three factors: the term of an international assignment, staff mobility, and equity pay referent groups (Martocchio, 2019). With this, I would consider these variables when deciding to go as the term of the assignment compensation can be varied based on the duration of the assignment which would influence my decision to take the position.

The first consideration I would evaluate would be the duration of the assignment as short – term assignment of less than a year does not require much change to domestic compensation. However, long assignments require more benefits such as education expenses for children, housing allowances, adjustments to avoid paying double income taxes (Martocchio, 2019). Depending on how long I will be working overseas I would want to be compensated appropriately for my duration. As I am picking up my life and moving across the country which is not an easy decision. The compensation and benefits would have to be worth it for me to convince myself to move and pick up my life and career.

To add, I would need a set time and duration of the assignment. Having a clear understanding of the duration of my position would influence my decision to take the position and influence how well I could get adjusted moving. Without a clear timeline, I do think that it would be hard to not only do my job well but, get adjusted because I would never know how long it would take to get acclimated to the location and work environment.

Another variable that I would take in would be the company’s willingness to accommodate me to move to a foreign place. Not only monetary compensation would be considered but, the incentive to get me to feel comfortable working and wanting to work in a new location. Based on this, I would consider how well the company is willing to invest and take care of me when it comes to working in another company. Without support from the company, I would most likely not take the position.

Lastly, I would consider what the company would be willing to pay me based on referent groups (Martocchio, 2019). Along with how they determine my compensation packaage and salary as a whole which can be subjective due to the country averages and rates for positions.

With this, depending on the location and position it would influence my decision to take the job because compensation packages can vary from place to place. Lastly, I would want to be accommodated appropriately based on the scope of the job but, also the cost of living and depending on what is being offered it would influence my decision to take the position.

Reference:

Martocchio, J. (2019). Pearson etext for strategic compensation: A human resource management approach — access card (10th ed.). Pearson.

When it comes to the idea of executive compensation, I would argue that the compensation is excessive between the pay gap among workers on the lowest levels and those in higher position. With this, I can see how the excessive salary can be justified and can be a valid argument from those in executive positions to some extent. My rational for this is that those in executive position have more responsibilities, demand, and their workload is more intense than those on lower levels. However, I would argue that the amount they are being paid are too much which is creating a large pay inequity among companies. An example, of this can be seen in 2018, where the median total compensation for S&P 500 CEO rose 4% to $12.3 million. As well, this can be seen in Microsoft’s CEO Satya Nadell who got a 66% raise making his compensation roughly $43 millions and CEO Bog Iger $66 million compensation package which was greater than 1,000 more than the median pay of employees at Disney (Sahadi, 2019). 

To add, something that was interesting when it comes to executive compensation is CEO compensation has grown quicker than the pay of the top 0.1% of wage earners which indicates that CEO compensation growth does not reflect a competitive race for skills and productivity only rather it reflects an increase in the value of highly paid professionals. Rather, CEO compensation can reflect the power of CEOs to extract concessions (Mishel, 2021). 

Some factors of that can help explain the rise in executive compensation can be the components of executive compensation packages which can include the annual base pay and bonuses, short term incentives, differed compensation, equity agreements, and stock options (Mochichi, 2019). In which these variables are taken in consideration when choosing to hire and retain CEO’s and be competitive in the market. As companies are matching and or trying to gain a competitive advantage when securing a valued CEO which is causing a rise in compensation.

Another factor, that can be the board of directors of a said company who can advocated and argue for a said salary. As they are key stakeholder within the company, they can use their power within to advocate for raised based on how well the company is preforming and base their decision on how they feel the CEO is doing and or the direction the company is headed. In combination, hiring and retaining a CEO that has a good reputation and is paid well can indicate perceptions of profitability and can gain new investor interests (Whelton,n.d). 

When it comes to executive compensation, I do think that it is subjective to the company. As the company and its shareholders have an influence on how much they are willing to pay their executives and benefits to offer them. However, to reduce inequity’s among executive compensation and those that are lower there needs to be some sort of policy that put limitations on how much a CEO can make and or have a capped salary increase during the year. 

Along with this, I do think that there needs to be a better way to manage CEO performance and compensation should be adequately based on those said performance metrics. 

Bibliography

Mishel, Lawrence. 2021. “CEO Pay Has Skyrocketed 1,322% since 1978: CEOs Were Paid 351 Times as Much as a Typical Worker in 2020.” Economic Policy Institute. Retrieved March 5, 2022 (https://www.epi.org/publication/ceo-pay-in-2020/).

Sahadi, Jeanne. 2019. “Why CEOs Are Paid so Much.” CNN, October 24.

Whelton, Russell S., and Deborah R. Bishop. n.d. “Effects of Excessive CEO Pay on U.s. Society.” Svsu.Edu. Retrieved March 5, 2022 (https://www.svsu.edu/media/writingprogram/activedocs/Whelton_article.pdf).

Martocchio, J. (2019). Pearson etext for strategic compensation: A human resource management approach — access card (10th ed.). Pearson.

Learned from this week’s materials discretionary benefits are benefits that are not required by the law and are used to build a competitive edge when it comes to attracting employees and retaining (UCB, 2017). To add, discretionary benefits are a large cost for companies, and some are needed to be cut for the better of the company budget and have varying level of importance to employees.

When thinking discretionary benefits my ranking of benefits I would most likely eliminate to the ones least likely eliminate can be seen below.

• Tuition Reimbursement
• Outplacement Counseling
• Employee Assistance Programs
• Transportation Services
• Paid Time Off
• Disability & Life Insurance
• Retirement
• Family Assistance

Based on my ranking one benefit that I believe that could be cut is tuition reimbursement to cut costs. My rational for cutting this program is that it is very costly and can add up if there are many employees seeking higher education. As the costs of education is on the rise, it will lead more and more incurred costs to the company in the long run. Too add, I do think there is risk in investing in this as the employee is not guaranteed to stay with the company after completing their education.

As well, outplacement counseling can be reduced. As this benefit can be valuable to the company as it can help save reputation for those that are being let go. However, the costs and time do not outweigh the benefits to help those who are leaving the company. My decision to cut these benefits come smore from a financial standpoint and can be subjective.

In comparison, I ranked retirement programs and family assistance programs the highest. My rational for this is they bring more value to the company and the employee. As family assistance as this can relate to providing elder care and childcare (Martocchio, 2017). With this, in place it allows for employees to be able to better balance and have support to manage their work and home life. Along with retirement plans can help support employees later in their life and can be incentives to continue working to work with a company knowing their return in investment is worthwhile.

One factor that can influence benefits an organization offers is the costs associated. As discretionary benefits are costly to implement the financial means of a company has influences how much they are able to provide. This can depend on their budget, size of company, and financial stability which are all variables that can influence which benefits are implemented and which ones the company feels are most important.

Another factor can be company culture which can influence type of benefits are offered. Depending on the company’s values they wish to uphold it can influence which benefits they want to provide to their employees. An example, of this could be a company that has fostered a company culture that emphasizes family. They would be more likely to support family assistance programs and PTO rather than tuition reimbursement.

In sum, these factors influence an organizations benefits packages based on their financial capacities to implement and which ones to prioritize. Along with, the benefits they choose to offer can influence employee retention and recruitment when it comes to a company. In combination, the benefits offered can affect and employees behavior in which they perceive the company they work for and how employees are valued which can influence their motivation and willingness to contribute to the organization.

References

Jones, K. (2017, February 15). The Most Desirable Employee Benefits. Ebscohost.Com. https://web.p.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=1&sid=c44871cf-5aae-44d4-994f-88f7b6d12c10%40redis

Martocchio, J. (2019). Pearson etext for strategic compensation: A human resource management approach — access card (10th ed.). Pearson.

UBC. (2021, January 27). Discretionary benefits – what are they and should you consider them? UBC Insurance Solutions. https://www.ubcinsurance.com/what-are-discretionary-benefits-and-should-you-consider-them/

Week 5 – Post Graduation Pay Rate

A job post-graduation I found to be interesting on LinkedIn was an entry-level HR Coordinator with the company Robert Half which is a staffing and consulting company. The position is in Minneapolis, MN. Based on the job description responsibilities for this position include planning employee orientation meetings, searching for potential customers, conducting administrative tasks serving employee database records. As well, including at least one year of experience and or HR courses (Entry, n.d.).

As this position is for an entry-level salary, I found that the average human resource coordinator salary is $39,000 and the average pay in Minnesota is $37,389 (Average, 2020). Along with, consideration to the location of the job from being raised in Minnesota the cost of living in the Minneapolis –, St. Paul Metro is less expensive than living on the West Coast making this a reasonable income.

To add, supported from the textbook most companies’ salary range spreads between 20% – 80% as most of them use progressively higher spreads based on the value of the job based on company criteria and complexity (Martocchio, 2017). With this understanding, I would estimate an entry-level salary range of $26,000 – $28,000k for an entry-level position based on the job demands. With the assumption that those in a similar HR position would be compensated based on the responsibilities and demands. 

Under the assumption of the pay range during the interview I would provide them with a range between $27,000 – $34,00 based on my own experiences and knowledge in the field. For justification of this salary, I would vouch based on my experiences in management capacities through internships, jobs, and completing an MBA with a focus on HR to show interviewers that I am an asset to the company and seeking opportunities and grow within their company. Doing this can help me leverage my skills and abilities to seek the salary that I desire. 

I do think that this range is reasonable because once further along in the interview process I can negotiate my compensation package depending on what salary they suggest, and benefits included as one could weigh more heavily on my decision for the position. Along with I do think that I would bring value to the position based on previous experience and knowledge. Not only, when negotiating we should overestimate salary ranges because we never know what an organization might say and should never undermine our skills and abilities.

Overall, this would be a position that would be great to start a post-graduation job that could help me expand my skills within HR and then have the ability to take on a larger role later on.

References

Average Human Resources Coordinator salary. (2020, May 18). Zippia.Com. https://www.zippia.com/human-resources-coordinator-jobs/salary/

Entry Level Hr Coordinator job in Minneapolis. (n.d.). Roberthalf.Com. Retrieved February 5, 2022, from https://www.roberthalf.com/job/minneapolis-mn/entry-level-hr-coordinator/02313-9503233979-usen?rh_job-feed=true

Martocchio, J. J. (2017). Strategic compensation: a human resource management approach. Pearson.

Week 4 – Compensation Systems

When considering the complexity of developing a compensation systems that is both internally consistent and market competitive it it is very complex. However, it can be done with strategic planning to be implemented correctly and efficiently. 

A challenge of this can come from the internal consistent compensation system which “defines the relative values of each job among all jobs within a company” (Martocchio, 2017). The challenge with this comes from having a clear job structure that is based on complexity, responsibilities, and qualifications of jobs in which they are paid higher than position with less responsibilities and qualifications. Therefore, it can be difficult to match and or remain competitive with other competitors because it means raising wages for positions to retain and attract employees in which organizations may not have the capacity to do so. 

Another challenge can be when creating a market – competitive pay system that is also internally consistent it requires extensive time and effort. Reasoning being creating a competitive pay system is based on four comprehensive activities which include conducting a strategic analysis, assessing competitors pay practices through compensation surveys, integrating internal job structure with external market, pay rate, and determining compensation policies (Martocchio, 2017). These are not activities that can be completed quickly and it does not mean implementation will run smoothly. Evaluation, analysis, and adjustments will need to be made to ensure that implementation is correct and measures align with the organizations goals and values to be able to best attract and retain employees in a competitive job market.

References:

Martocchio, J. J. (2017). Strategic compensation: a human resource management approach. Pearson.

Swift, M. (2021). Introduction to Compensation [Lecture recording]. Canvas@Oregon State University. http://canvas.oregonstate.edu/courses/1842591/pages/week-4-learning-materials

Week 2 – Compensation Management

The company I further explored was Ikea and it was clear that they are a company that values its employees. Ikea operates on a low-cost structure by providing home furnishing products at the most affordable (lowest) price possible for consumers. Compared to other competitors such as Crate and Barrel, Restoration Hardware product prices are significantly cheaper.

Not only, Ikea thrives because of the lower costs in combination to providing quality, sustainable, diverse products that hold onto the traditional Swedish furniture style which helps set them apart from competitors.

To keep costs down Ikea chooses a set price they want to sell a product at, and designers and suppliers work together to see it through with a minimalistic design (Tyler, 2018). By doing this, it helps reduce the chance of extra expenses in the design and manufacturing process which would raise product prices.

To add, a large cost break comes to their “flat packing” in which all their products are in flat boxes while being transported and stored (Tyler, 2018). This method of packaging is less expensive because it requires customers to manually assemble their products on their own and storing of products takes less room.

Ikea’s compensation can include maternity/parental leave, discounts on merchandise, health insurance, pet insurance, in-store meal discounts, paid time off, retirement funds. As well, a loyalty program that gives extra contributions to employee pension funds regardless of salary and position when company goals are reached (Samuel, 2021).

As a whole, I would say that Ikea’s approach to compensation does support their competitive strategy because they want to be inclusive to all. Similar, to producing products that are affordable to all people. To add, a large reason why they can provide extensive compensation to their workers is due to keeping their company costs down. Which better, allows them to invest in their workers who bring value to their company and keep them leading in the industry.

Furthermore, Ikea’s product market and labor practice changes in supply and demand which can influence the availability of products and costs compensation remains the same within the company. A large reason for this can stem from the companies’ values of togetherness, caring for people and the planet, cost – consciousness, simplicity, renewal, and improvement, different with meaning, giving and taking responsibility, and leading by example (Ikea, 2022).

Ikea focuses on retaining their employees by keeping them happy and wanting to be a part of the positive company culture through their values. Along with, recognizing workers’ hard work and dedication in the company. Despite facing adversity within their supply chain and the influx of products in the market they take an emphasis on caring for their workers as they are key players in keeping the company successful.

References

IKEA business strategy and competitive advantage: Capitalising on IKEA concept. (2019, November 2). Research-Methodology. https://research-methodology.net/ikea-business-strategy-competitive-advantage-capitalising-ikea-concept/

IKEA culture and values. (2022). Ikea.Com. https://about.ikea.com/en/about-us/ikea-culture-and-values

Samuel. (2021, October 14). IKEA Employee Benefits- IKEA overview. How I Got The Job. https://howigotjob.com/employee-benefits/ikea-employee-benefits-ikea-overview/

Tyler, J. (2018, October 12). Here are IKEA’s secrets to keeping its prices so low. Insider. https://www.businessinsider.com/why-ikea-is-so-cheap-2018-10

Week 1 – Compensation Management

A situation that comes to mind of someone that engaged in a set of behaviors and compensation was a motivating factor is through my Mom and a decline of a job offer. My mom declined a job as an Executive Assistant within a fortune 500 company to be able to continue as an Operation Manager for a DEI organization composed of less than 50 workers. 

 One reasoning for the decline of the job was based on the motivation of intrinsic compensation which is the psychological mindset those results from performing a job (Swift, 2021). She felt the work that she was already doing mattered more and it was more rewarding than accepting the other job offer. She felt more connected to her colleagues, the work that she produces is valued and highly recognized when working in a smaller organization. In combination, factors such as her prior work experience, skills, and demands of the job offer were not worth her time as she felt that she was overqualified for the position. 

To add on, another reason for the decline in the job can be the extrinsic compensation for the new job offer which had less monetary and nonmonetary rewards (Martocchio, 2017). In comparison, the compensation that her current job was more appealing and comprehensive based on the core compensation elements (Martocchio, 2017). Her decision to turn down the job offer was further analyzed as she weighed out the pros and cons of the compensation packages the organization offered her which ultimately lead her to decline the new job offer. 

References

Martocchio, J. J. (2017). Strategic compensation: a human resource management approach. Pearson.

Swift, M. (2021). Introduction to Compensation [Lecture recording]. Canvas@Oregon State University. https://canvas.oregonstate.edu/courses/1842591/pages/week-1-learning-materials?module_item_id=21647282