Recent Trends in Compensation Practices - Assignment Example

Compensation Practice Briefly describe the company you researched, its compensation strategy, best practices they are applying,and compensation-related challenges they are facing. Verizon Communications Inc. offered telecommunications and broadband services and was formed in the year 2000. From late 2014 the company was the largest provider of wireless communications service. Likewise, Verizon is a current global leader in offering innovative technology and communications solutions that enhance the way their customers live, play and work. The company designs, develops and operate various global networks, mobile technologies, and information systems that grow economies and connect people, and improve the society. In every last association individuals work for to receive something consequently or they expect something after consummation of their work structure head honchos. We probably heard a typical expression: give and take. We should dependably things to individuals in return for what you issue them. Remuneration alludes to this Exchange, however in fiscal terms. Remuneration from the executive a representative criticism for work. Its simply the money related quality that head honchos trade for their workers with the administrations that representatives gave. Human Resource Management characterizes pay in these words "worker remuneration alludes to all types of compensation to laborers and emerging from their job (Hill & Jones, 2007). In the recent years many organizations including Verizon Communications Inc. have been designing implementing effective reward system demand to clear fit between the compensation strategy and overall business planning. Compensation system can be considered as the collection of pay decision utilized by administration that may under specific conditions influences organizational operations related to payment of workers and compensation of their various activities is done. (Lebow, 2012). Lately, numerous associations including Verizon Communications Inc. have been designing implementing effective reward system demand to clear fit between the compensation strategy and overall business planning (Hill & Jones, 2007). The degree attaining success related to various pay choices is dependent on the contingencies facing the management of question. For the case of Verizon Communications Inc., they Compensation practices are a set of commitments to following better compensation practices to employees. Compensation strategies act as a booster to motivate various employees as they work to achieve the organization goals. This is to say, any organization including Verizon Communications Inc., that have a better compensation strategy have been able to keep their trusted employees and build a skillful workforce since its establishment. In the long run, the company has been able to be more competitive telecommunications and broadband provision. To start with, it is in the general public domain that Verizon Communications Inc. is an equal employer. This has been witnessed in the manner in which they recruit their employees. For instance, it doesn’t discriminate potential employees on gender, state, race of origin among other aspects. Nonetheless, after placement, there is variation in employees’ salaries or wages depending on various factors such as skills, experience, geographical location, duties and responsibilities the worker holds and the nature of work among other factors. With the exception of the key executive members, compensation strategy is in such a way that most of the employees at Verizon Communications Inc. have their salaries and wages calculated on an hourly basis. Verizon Communications Inc. as a company has benefited from this compensation strategy since it has enabled the company effectively provide key services to their clients particularly the vibrant wireless section that offers data services and wireless voice that enables its clients to access the Internet from basic phones, smartphones notebook computers among others. As mentioned, there are salaried executives as well within Verizon Communications Inc., These service executives are compensated salary wise depending on the roles each play and the service supervisors they handle. In other words, the salaries are determined by the responsibility assigned at intervals. Verizon Communications Inc ensures they remain competitive by initiating performance pay system. The compensation program is tailored to reward various performances that create long-term value for shareholder. The compensation strategy requires that workers are at their best in their duty of offering telecommunications and broadband services to the clients. Verizon Communications Inc, thus, takes advantage and initiates various benefits with an objective of retaining the large pool of experienced and skillful employees. This is portrayed in the long-term orientation of the haul compensation mix, with the considerable majority of all the named executive officers and their total compensation prospect in long-term equity or performance based awards; considerable linkage of pay to long haul stock execution. Likewise, solid total and relative execution keeping in mind the end goal attain to above median pay levels. Verizon Communications Inc additionally ensures there is the pay base compensation system by reviewing yearly internal peer data and the data from the external market. Despite Verizon Communications Inc having various compensation strategies, it has a various challenge such as high turnover rate of their current employees. Verizon Communications Inc normally recruits annually due to the uncertainty of the availability of current employees in future. This has been attributed to the dynamic and competitive market they operate in. Such strategies have caused uproar particularly among the junior employees who feel despite their huge contribution they are less compensated. Verizon Communications Inc is today the largest American telecommunications and broadband company and has many plans to expand to new global markets. One can argue that globalization has brought with it a lot of opportunities and so are draw backs. Labor laws are different in the global setting and this as affected the company. Likewise the cost of doing business and trade regulation varies significantly. Thus, Verizon Communications Inc has to ensure that it compensation strategies is in line with the ever dynamic government regulation in their dream operating countries (Lebow, 2012). Finally, Verizon Communications Inc also has many employees located in various location, hence it may incur various cost depending on the benefits for instance insurance and health examination. This calls for uniform policy to guide the compensation in question. Analyze how your company applies compensation practice to determine the positive or negative impact on the company and its stakeholders. Just as the case with many organizations globally, Verizon Communications Inc have various stakeholders that look to them with high expectation. The stakeholders are important in ensuring the growth of the company. Therefore, the company has strategized its compensation policies such that they are put in line with the competitive market expectations. Each individual has been given their role with the overall managers given power to determine various remuneration packages (Martocchio, 2013). The company has also ensured there is morale boost through annual salaries increment and introduction of new benefits. Examine the ways in which laws, labor unions, and market factors impact the company’s compensation practices. Provide specific examples to support your response. Verizon Communications Inc operates in an environment govern by various laws and regulations that goes a long way in influencing their service delivery to their clients. For instance, labor law affects minimum hourly wage rate and other benefits that Verizon Communications Inc has to offer to their employees. Likewise, due to the vibrancy of labor unions in the United States, they ensure that working conditions and wellbeing of every worker is safeguarded. All these considerations affect Verizon Communications Inc compensation practices. The market environment or factors have in recent years influenced the way Verizon Communications Inc handle its employees. The market factors have also dictated the company updates its payment system so as to be line with the other players in telecommunications and broadband industry (Hill & Jones, 2007). For example, as a result of various industries establishing free eye camp center that allow employees to access these services, Verizon Communications Inc has also created such a unit. Such initiatives assist employees to remain focused towards ensuring company’s success. Evaluate the effectiveness of traditional bases for pay at the company you researched. Verizon Communications Inc is traditionally known for compensating employees based on responsibilities and their performance. Such strategies have been advantageous to the company in the long run since the motivation of workers trickle down to the services they offer the clients. Through the traditional approach, Verizon Communications Inc have been able to attract new and variant employees and retain experienced and trusted workforce. The traditional approach is a good scorecard of employee’s efforts towards their responsibilities. In addition, the employees still strive for better benefits and promotion while at Verizon Communications Inc. Finally, through the traditional approach, the talented individuals are singled out and trained to further increase their potential and company‘s productivity. In conclusion, as exemplified in the research, compensation strategies used by Verizon Communications Inc. have been workable from the start of the company in the year 2000. The evidence is seen from the way the company in 14 years has been able to be the largest American telecommunications and broadband company. Through the company, one is able to understand the critical role played by compensation strategies in enhancing company’s competitiveness. Obtaining a workforce with the right attitude and dedicated is in many times challenging and very costly. Thus, compensation practices has been a vital motivator towards ensuring that once a Verizon Communications Inc has noticed the existence of a rare talent within the workforce, the individual is well taken care off, compensated better through remuneration package and better benefits. With the example of Verizon Communications Inc where they value the top executives who are charged with the duty of formulation of critical decisions, other companies around the globe can borrow a leaf and, therefore, be able to have succeed in various strategies (Martocchio, 2013). References Top of Form Hill, C. W. L., & Jones, G. R. (2007). Strategic management: an integrated approach. Boston, Mass, Houghton Mifflin. Bottom of Form Lebow, D. E. (2012). Recent trends in compensation practices. Washington, D.C.: Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board. Martocchio, J. J. (2013). Strategic compensation: A human resource management approach (7th ed.). Upper Saddle River, NJ: Prentice Hall / Pearson. Read More