Recognizing Employee Contributions - Report Example

Executive summary

Effective and elaborate compensation of employees is important for the maintenance of productivity by the company. Compensations for good work by the employees can be merited through benefits or incentives. There are benefits that are assured by the law as well as those crafted by the organizations to ensure proper compensation for the employees. The government benefits are mostly taxable’s that develop a pool of funds that may be paid at a later date. The companies benefits can include other important aspects that make work effectively a deliverable or an incentive. However, the incentive has the attraction of unethical issue of great conce

Profit or gain sharing

The retail company develops a strategic method for the sharing of the profits of the company. The structure of incentive system involves the use of specific targets by the organization, employee performance and the rationalization of the profit sharing method. The method of rationalization ensures the employee seeks the achievement of a comprehensive goal of the organization for the incentive. The profit sharing system uses the deferred compensation, where the earnings are paid out to the employee’s accounts at a later date. Most companies determine the pay incentive for its employees through a similar increment in the profitability of the organization. The profits shared can be either through cash or through stock however according to federal legislations the share is taxable but subject to limited regulations.

Cash Bonuses

The organization can take up the awarding of a onetime bonus for its employees. The structure of the onetime bonus has the inclusivity of particular elements. First is the selection of the particulars for awarding the incentive. For the retail company it should focus on awarding best practice amongst the employees, meeting the set targets, ability to retain a customer by the employee and best service provision. The company awards the incentives at the time specific to achievement, the size of the incentive depends on the type of the achievement. An example of such a Bonus incentive that affects the whole operation is one developed by Robinson Resource group. The promised its staff in 2010 that every employee will earn 100,000 dollars if the company doubles its reserves and production rate as at 2015.

Legal requirements on benefits

Social security

In the United States, the law assures the employees some three types of benefits. They are inclusive of unemployment insurance, workers compensation, as well as social security. However, in all this benefits the employees are required to contribute towards their attainment. The social security benefit is also known as disability, survivors, or old age insurance. The insurance income is for dependants, retired workers and the disabled workers. The social security act of 1935 provides the basis for the provision of the insurance policy. The social security fund is financed through the payroll tax of workers’ wages. The tax is a consequence of a 6.2 percent taxable income for earnings to the tune of 110,000. By the year 2012, social security was getting 4.2 percent of the 6.2 taxable.

Medicare

The Medicare that seeks the payment of medical care for retirees and persons affected by long-term disabilities. The Medicare benefit is a consequence of the amendment of the social security act of 1965. The Medicare assures the reimbursement of hospitals, medical clinics, and doctors for the provision of services to beneficiaries of the Medicare. By the year 2012, the Medicare rate was 1.45% of the taxable income of the employees. Since 1966, the insurance program uses about 30 to 50 private insurance companies. According to a survey of 2015, Medicare provides a health insurance to more than 46 million people above the ages of 65 and 9 million young individuals.

Federal Unemployment Tax

Commonly known as the Act FUTA, the state unemployment programs and federal unemployment insurance provides benefits to the workers who lose their jobs. FUTA assures the coverage of the cost involved in the administration of unemployment insurance as well as the service programs in the states. Additionally the FUTA pays a half of the cost of unemployment during long periods of unemployment. FUTA can as well loan the funds to the states during difficult times to assist in the payment of unemployment benefits. FUTA takes up 6 percent of the employee wages with a maximum of 7,000 dollars in a year. On the other hand, employers that make timely payments of the unemployment taxes are eligible for a credit of up to 5.4 percent.

Other benefits

Compensation time

Employers who offer payment for employees who work overtime are generally attractive. Some of the employers work with a comp time payment system. The system provides an hour off work for every extra hour the employee works. The system is developed in a formal manner with records of the extra time as an important element. However, the comp time has rules regulating its articulation for the insurance of lack or reduced abuse of the system.

Family-friendly benefits

A survey by a World labor organization provides that employers who have developed a proper policy for employees and their families generally are able to retain the best employees. An example of an effective policy is staff opportunity to telework, creation of their won convenient working schedules, and paid leave for the care of newborns or sick family members. Other work place practices revolve around the recognition of mothers and father responsibilities, consideration for bonuses, raises, and promotions.

Flex Time

Most employers can be flexible about the salaries however; they never accord a similar flexibility in the working hours. Better policies for companies on working hours are such as reduced number of working hours. The provision of alternate working hours, this will allow the workers the opportunity for pursuance of other passions, and hobbies. The company can as well adopt flexibility in the job sharing patterns, telecommunication, and compressed workweek schedules.

Job resources

The workplace is very important for the determination of delivery of best results. The company can adopt the availability of resources and policy to ensure the efficiency of workers. The resources for the organizations are such as office space, budgets, software, equipment, policies, and personnel. The company should adjust their investment for the accommodations of all the needs for best practice. Consequently, assurance of all the information required by the worker for the proper deliver of results and evaluation of the job is critical.

Technique for communicating compensation and benefits

The company does communication of benefits and compensation to the employees through an elaborate policy development. A significant number of organizations develop this policy framework through several steps. The communication of this policies developed by the organization should be effective and understandable by employees. The efficiency in the communication of the strategies is developed by certain factors. The factors for consideration in the many techniques for communications are inclusive of Demographics of the ages of employees, gender, and ethnicity. Young people are considered more productive as compared to the elderly while there would be 11% more females in the workplace in 2018 as compared to 2017.

The second factor that takes consideration from most of the organizations is life stage. At what stage are most of the employees are they newly married, singles, newly promoted or approaching their retirement. Depending on the type of employee, that the organization requires it would consider the different needs in developing proper communication. The location of the employees has often complicated the communication of benefits and compensations. Employees who work in different locations require a comprehensive communication system. The culture of the employee as well determines the communication strategy. Most of the information is communicated on the need to know basis. Technology has also affected the communication strategy with most employers’ choose the system as it is effective and convenient.

Ethical risk of incentive use

Incentive attracts unethical practices by workers within an organization. Unethical conduct can include the cheating of numbers where an individual gives a wrong assessment of self. On the other hand, an incentive can create an unhealthy working environment in which individual success is important than team work. The company can mitigate the effects of the two by first ensuring the existence of supervisory technology in the work environment of all the employees. Technological supervision will ensure effective productivity. The process of incentive should be effected amongst groups of employees as well as at individual level. Fundamentally, this will ensure a participatory approach to the deliverables.