Month: February 2021

Discretionary benefits are a major cost that companies are facing. In fact, according to the text, these benefits account for almost 23 percent of payroll costs. If I were management, that number would be a terrifying reality. 

Discretionary benefits consist of three categories. In no order of significance, those categories include: protection programs, paid time off, and services. Within those three categories, there are a multitude of different benefits. I have been given the task, as a compensation professional, to rank each of these benefits from the ones I would most likely drop to the ones I would least likely drop. 

The category in which I would go to first in terms of elimination, would be services. Both day care and tuition reimbursement programs are two benefits that I would be quick to eliminate. I believe that family is extremely important and I should expect to have a high percentage of employees who have children, however, I do not think it should be the responsibility of the employer to provide and pay for a daycare service. Tuition reimbursement is another benefit that the employer should not be responsible for. Education should be a top priority for most companies, but there are many scholarships and other ways that employees can pay for their college career. 

Paid time off is the next category I would look into, although this category plays a huge role in the employees morale. It’s beneficial to maintain positive employee behavior as it relates to better performance. As I mentioned earlier too, having employees who want to spend time with families around the holidays is essential. 

These benefits are significant to people’s lives outside of work, however, they are not as important as the benefits under the protection program category. The three subcategories under protection programs are: disability insurance, life insurance, and retirement programs. These are all things as a compensation professional that I refuse to eliminate.

  

The company I chose to research is Sherwin Williams. There were many factors that went into this choice, however the factor that prevailed the most was the fact that I will be working with them post graduation.

With that being said, I think it is extremely important for me to learn what type of pay structure they have and what works best for both the company and their employees. One of the things that really drew me in with them, is the room for growth within the company. Their job types range from a sales associate making an hourly minimum wage, all the way to senior level managers and specialists. Whether I stick with Sherwin Williams and end up working in their headquarters or gain the experience needed to move on to the next job, compensation will play a major role in my next steps. 

Based on my personal experience with this company, the research I have done and material from the text, I would recommend Sherwin Williams offers a job-based pay structure.

One reason for this, is due to their form of a merit pay program. According to the text a merit pay program, “assumes that employees’ compensation over time should be determined, at least in part, by differences in job performance.” This means that employees will receive higher compensation based on higher job performance. This is an incentive for employees to perform better, motivates them for the future and retains valued employees. The better the manager at Sherwin Williams, the higher compensation and salary increase they will receive. 

They also have an incentive plan. I know this first handedly to be true, because in my acceptance letter there is a section titled “Compensation and Benefits”. Within this section, it describes other things I may qualify for on top of my base pay. One of those things being “the Sherwin Williams incentive plan”. 

Due to these facts and what I have learned about both pay structures, it is clear that the best structure for Sherwin Williams is job-based.