Case 2 TD-MGT 411 Compensation: Benefits - Essay Example

Employee benefits package Morale and profits It is essential to that Newco prevents interference with the former staff by hiring out 400 new employees to work in two new offices. In this sense, the firm does not seek to destabilize the working of the existing departments. Besides, the firm does not seek to overwork the existing staff by introducing higher amounts of work. This move has two contrasting sides. The fact that a firm participates in the hiring of new employees is significant for its branding.

On the other hand, the fact that the firm does not offer benefits package to the new employees serve as a drawback to employee retention. This is because a proper benefits package is one of the core things that attract employees to an organization. Employees are highly likely to a proper benefits package as a sign of corporate responsibility. A mere salary package seems to compensate the worker for the responsibilities that one carries out in a firm. On the other hand, a benefits package means that a company minds employees’ welfare beyond profits.

In turn, the new program will induce a higher turnover rate. This is because as employees stay in the company, they are highly likely to meet opportunities that accord them privileges, which Newco does not offer. A modern employee looks beyond the salary package in determining the suitability of a company. A rational employee knows that a benefits package saves an individual from incurring costs of items such as health insurance. The approach, however, may result in short-term new profits since the firm will incur less cost in having the new employees.

On the other hand, low morale of the new employees may cut on down on productivity thereby reducing profits in the long-run. ReferencePhillips, J., & Edwards, L. (2008). Managing Talent Retention: An ROI Approach. Hoboken, NJ: John Wiley & Sons.