Essay on Compensation and Benefits Strategy

1040 Words5 Pages
Compensation and Benefits Strategy
Landslide Limousine (LL), a small business in Austin, Texas, hired Atwood and Allen Consulting (AAC) to conduct a market evaluation and provide recommendations for the following: a position in the market, a compensation structure, a total compensation and benefits strategy, and performance incentives and merit-based pay to recognize and engage employees. This will help to identify applicable laws related to pay and benefits. This paper includes citations from one peer-reviewed book, three government websites, four commercial websites, and one University of Phoenix online course material. Market Evaluation
Atwood and Allen’s market evaluation found the average salary for a limousine driver in Austin,
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Position in the Market
The company’s ability to pay is less than that of its competitors and will remain constrained until the company can establish a reputation and gain a share of the market (Cascio, 2013, p. 420), so the company should position itself carefully in the market. LL should allocate 25% of its budget for salary and benefits and use performance incentives, merit-based pay to keep fixed labor costs low. LL should pay employees $9.33 per hour, which is $19,406 per year and is $2 per hour less than industry average for Austin, Texas. The company should pay management a salary 5% higher than employees to maintain the balance of compensation rates (Cascio, 2013, pp. 423-424). The company should use additional benefits, performance-based incentives, and merit pay to attract, retain, and motivate employees who share the company’s vision and goals (Cascio, 2013, p. 423).
Total Compensation and Benefits Strategy The total compensation and benefits strategy of the company should place an emphasis on compensation through incentives with a reduced fixed labor cost. If the company is successful, employees receive additional compensation and if the company is experiencing difficulty gaining a market share or if there is an economic downturn, the company has a reduced labor cost (Cascio, 2013, p. 420). The company should not use pay grades because of hybrid positions and maintaining the flexibility to modify job descriptions to fit the needs of the
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