Total Reward Plan for Newbies Electronics - Case Study Example

Total Reward Plan for Newbies Electronics

Company Description

The company will be a conglomeration of electronic shops. The company will have shops in different parts of the country with their headquarters being located in New York. The company will play different roles in its operations. Since the company is not the main manufacturer, it will act as a certified distributor and seller of the major electronic companies. The distribution part will make up a majority of the revenue of the company. The company will also sell electronics on the wholesale and retail basis. The company will work with importers to get the best electronics and sell them locally. The electronics company will not only be involved in the act of selling, but also it will deal with delivering of orders or being a local distributor of the major electronic companies that exist worldwide. As such, the company will have the main top management, transport department, stock and store department, sales and marketing department, human resource department, financial department and, public relations department.

Types of Positions

The company will be headed by a CEO, who will be mainly located at the headquarters. However, the CEO will have offices in all the branches/shops that are owned by the company and as such, the CEO may be available at a certain shop whenever they deem it fit. COO will assist the CEO. The COO will coordinate all the operations of the different shops to fall in line with the ambitions and objectives of the organization. Under the COO there will be two groups of managers. There will be overall managers and the branch managers. Overall managers will include; financial managers, transport managers, public relations managers and stock and store managers. The managers will look at the overall aspect of the company in regards to their position. The branch managers will be in charge of different shops they will ensure that the shops run effectively, they have enough employees to attain the goals set out by the top management and, they will make sure they coordinate all the activities of the branches. They will be answerable to the top management and the CEO directly. Under the managers immediately will be supervisors by the main categories of the shops. There will be sales and marketing supervisors, there will be stock and stores supervisors, and there will be assistant accountants who will act as financial supervisors and public relation supervisors. Under the supervisors will be ordinary workers in each and every department. Other workers will include messengers, cleaners, and cooks.

Reward Plan and Cost

Total Compensation Plan

The first and important reward system that will be employed by the company will be the total compensation system. The total compensation plan will have two main categories. There will be the base pay system that will be accompanied by the incentive system. The different jobs will be evaluated differently and their difference in requirement and importance to the company established. The jobs will also be classified according to the different job groups and their minimum wage rate per hour established. The base pay will be fixed. The base pay will not include the overtime pay or any payment benefits that the employee may have earned in the course of the payment period. Additionally, there will be differences in how the employees will be paid at the workplace. The pay will depend on many factors which will include; the level of knowledge and skill, employment type and tenure, employment performance, employment class and profitability to the organization. The second compensation plan will be the incentives. As much as workers work and they are supposed to receive their base pay; there is a way to ensure that they achieve more regarding productivity and profitability, and that’s through incentives that they receive (Amah, Nwuche, and Chukwuigwe, 75). The incentives will be given in different forms, but most of them will involve the achievement of a certain target. There will be three types of incentives. First and foremost if the organization as a whole achieve a certain target, they will receive a percentage of their base pay as an incentive. Then there are the branch incentives that will deal with the achievement of a goal by the shops. Finally, individual’s targets will also be set by the managers, and their achievement will also mean that an extra amount will be received.

Benefits Package

The benefits will act as the second phase of the reward process/ plan. The benefits that the company will provide will include, medical cover and medical insurance. The medical cover will involve accidents or illness that occurs to the workers in the day to day running of the company directly. The medical cover will also include yearly medical checkups that will be conducted by the company. Medical insurance will be provided by the company to the main extent. The company will provide 76% of the medical insurance premiums for the employees. The employees will only be required to pay the rest of the medical insurance premium depending on the policy that they have obtained. The next benefit that the company will offer will be paid off days. Every employee of the company will be entitled to one day off work. However, the day will be paid for in full as if the employee was at work. On the same note, the employees will be entitled to 24 days a year leave. The company will pay the workers half the base pay on days when they used their 24 days a year leave. The company will also offer social security to the workers. Additionally, the company will offer retirement benefits to the workers who decide to retire at the end of their employment tenure. The company will use contribution plan in its effort to make life easy for the employees when they finally decide to retire. The company will encourage the workers to contribute part of their annual or weekly salaries towards retirement plan. The company will promise to add 30% of what the employees have contributed towards retirement in their retirement kitty. Lastly, the company will offer specialty benefits. The benefits will include disability insurance for the disable workers; it will also include eye checkups and treatments and, dental and vision coverage.

Work-life Balance and Training

The last phase of the benefit plan will involve work and life balance, growth and training. The company to ensure that it takes care of the balance, it will offer a fitness center on company premises and the workers will have free access. Additionally for those willing to continue with their studies the company may decide to give loans for further studies which will carry no interest and the employees will pay for them at a slow rate. Life today keeps on changing and so does career requirement and job requirements. On that note, the company will be offering a different training program for the different workers. In particular, there will be annual training programs that will take place every six months of the financial year to keep tabs with goals and objectives that the organization has set for itself.

Cost of the Rewards Plan

The company will have at most 120 workers with 10 in the top management, seven managers, 35 supervisors, 50 workers and 15 auxiliary workers. The base pay for the auxiliary workers and the normal workers is $7.25 per hour. The base pay for the supervisors will be $8.5 per hour while the managers will receive $9.0 per hour. The CEO and the COO will receive $10.5 per hour. In total, the company will spend $828 per hour which equals $46,368 per week. If the targets are all achieved on weekly calculation, it is estimated that the company will have to pay $30,634 per week. The benefits target which includes retirement contribution, medical cover and insurance and, specialty insurance will cost the company $24,300. Training and growth for the employees will be a major benefit factor, and it will include training of both the top management and the other workers. Secondly, education advancement will also include both the employees in the organization. The company will set up a maximum of $50,000 for education purposes on a weekly basis and $ 10,000 for training also on a weekly basis. As such, in one week the benefits will cost the company a total of $92,031.

Importance of the Wages and Benefits in Recruitment and Retention

Every business or company will like to have and retain its employees since the traditions of the company will be well protected and on the same note, they will save recruitment cost and the lag that occurs when an employee has to be replaced. The reward system will be able to help the company in retaining the services of its employees since through the benefits; the workers will feel appreciated and that they are a vital part of the company as a whole. As such, they will give their all to the company. It will be hard for a competitor to be able to poach the services of the workers since they are satisfied at the company and the worker will feel that they may not be able to get as much as benefits as they get while at the company. On the same note, it will be easy for the company to retain its workers since it will be easier for the company to convince its employees to stay in the company while citing the facts that it has offered them benefits that they may not get in the other company. Secondly, through the company offering the benefits and the compensation plans, other employees will hear of the rumors, and they will want to be associated with the company with such good compensation plan and benefits. As such, if the company carries on a recruitment process it will not lack potential employees.