Compensation and Benefits System at American Express - Research Paper Example

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Human resource professionals must reorganize the short-term and long-term compensation programs to cope with today’s challenging business markets. In order to deal with internal and external market risks and strategically manage a company in such a manner that it can hire and retain quality human resource, expertly designed compensation and benefits packages are necessary. …
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Compensation and Benefits System at American Express
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Compensation and Benefits System at American Express Brief introduction about compensation and benefits Although it is not always considered most important, compensation is an essential element in the value of employment. Human resource professionals must reorganize the short-term and long-term compensation programs to cope with today’s challenging business markets. In order to deal with internal and external market risks and strategically manage a company in such a manner that it can hire and retain quality human resource, expertly designed compensation and benefits packages are necessary (Snell & Bohlander, 2013). The compensation plans that organizations increasingly employ are routinely in line with the shareholder interests, cost constraints, and profitability targets, while concomitantly supporting employee development and retention. The aim of rewarding and recognizing is to show employees that their contributions are valuable and appreciated by the company (Kearns, 2009). Rewards and recognition makes employees feel validated, respected and important. In this section of research paper, we have examined the compensation and benefits system at American Express. 2. Rewards and recognition At American express, employees are recognized and rewarded through several tailored programs: a) Employee appreciation month American Express applauds and appreciates great work done by employees through the RewardBlue program, an American express brand. It dedicates an entire month to celebrate recognition across businesses and markets globally. During the month, a series of prizes and contests take place to reward and appreciate colleagues using RewardBlue. Employees using RewardBlue during this month to recognize colleagues enter a contest to win the Reward and Recognition platform (CNNMoney). b) Benchmarking activities The pay-for-performance program is a unique pay structure that offers an incentive of employees in the most intense, complete and productive use of their time. Tasks with greater qualification are paid higher than ones that are unskilled, which motivates the staff in education level, professional development and professional skill (Billsberry et al., 2005). The individual performance level of the employee is the benchmark for reward. The company also has a Long-term Incentive Awards (LTIAs) for to recognize employees for their loyalty and performance at the same time. 3. Wellness programs As the idea of corporate wellness gains value in businesses today, several strategies and approaches are being created in efforts to find the best means of keeping employees healthy in order to enhance and extend their performance to better suit the needs of the business and overall health. American express operates the American Express Healthy Living corporate wellness program that entails health assessments and wellness coaching initiatives. This program, developed in 2009, provides services such as subsidized gym membership and onsite fitness centers. The initiatives have formed an incorporated model for wellness; enabling employees and their families to have quicker and better access to healthcare, while motivating them to adopt or sustain good health practices for psychological, physical and social well-being. Since the programs initiation four years ago, the company has witnessed improvements across all employee risk factors due to high participation in the Healthy Living Program. 4. Benefits The company’s employees enjoy several benefits which include: a) Pension scheme Two defined benefits (American Express Retirement Plan & Supplemental Retirement Plan) and stakeholder scheme with 3% company contribution in case an employee fails to contribute. b) Healthcare and wellbeing The benefits include employee assistance programme, private medical insurance for all employees, health cash plan, health screening and free on-site health checks, smoking cessation support, on-site and off-site physiotherapy, wellness programme and coaching, and bikes-for-work scheme. c) Recognition Benefits in this area are global peer-to-peer recognition scheme and long-service awards. d) Work-life balance/family-friendly policies Childcare vouchers, Sabbatical programme, subsidized football coach training and football clinic for employees’ children (CNNMoney). (The sources must be provided) 5. Compensation packages a) Pay structure At American Express, the internal employee pay structure is integrated with that of market. The company has created various pay ranges and grades in its Performance Management Structure to award specific compensation to employees based on their effort and performance. The organization strives to avoid placing a cap onto the achievement of an employee within its structure as each employee is compensated by maintaining his/her performance on course (Varma et al., 2008). 6. Recommendations/Implications a) The compensation and benefits system at American Express is a perfect exemplary scheme for other companies. Other companies can use this model to tackle the challenges of managing cost benefits and healthcare plans which are constantly on an upward trend. Human resource professionals in other companies can learn to design and embrace policies that are in line with government regulations. b) To ensure that the rewards and recognition systems at American express is efficient effectual, the company must ensure that the programs reinforce company goals and values, while encouraging employees to work to achieve these goals. Rewards and recognition systems out of kilter with corporate objectives can lead to undesired or unanticipated behavior that may be only favor one side of the company while destroying the other (Holbeche, 2006). The compensation levels for the non-revenue generating employee sectors should be improve to transform the current approach to employee motivation and retention. 7. Conclusion Implementation of a rewards and recognition plan requires strict consideration of a wide range of aspects. It encompasses comprehending objectives, classifying metrics, devising the plan to track and measure success against the defined goals and metrics and settling on the types of rewards (Kearns, 2009). The compensation and benefits scheme at American Express is highly transparent and offers employees much trust and responsibility about the company. Consequently, employees feel comfortable and take pride in working for the company which is beneficial to both American Express and its employees. (There is nothing wrong quoting a conclusion, but in addition, this section should have been summarized about what you think of all the topics that you have researched about the company) REMINDER: This is Just a reminder about the Power Point. It is 1 or 2 HR best practice slide to share with the class just for 2 minutes and explain what so good about it References Billsberry, J., Salaman, G., & Storey, J. (2005). Strategic human resource management: Theory and practice. London [u.a.: SAGE. Holbeche, L. (2006). Understanding change: Theory, implementation and success. Oxford: Elsevier Butterworth-Heinemann. Kearns, P. (2009). HR strategy. Oxford: Butterworth-Heinemann. Snell, S., & Bohlander, G. W. (2013). Managing human resources. Mason, Ohio: South- Western. Varma, A., Budhwar, P. S., & DeNisi, A. (2008). Performance Management Systems: A Global Perspective. Global HRM Series. Taylor & Francis. "25 Best Global Companies to Work For." CNNMoney. Cable News Network, n.d. Web. 24 Oct. 2013. . For the references, they are not in APA style but it is OK I will fix them myself. It is important for me to get the original sources that you used because this paper is going to be put to TURNITIN.COM and I want to make sure that everything is OK Read More
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