The Importance of Compesantions and Benefits

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Compensations and Benefits
Compensation and benefits are vital in maintaining morale/satisfaction, encourage performance, and organization loyalty. Furthermore, it helps an organization to internal and external equity and reduce turnover. FedEx is an industry leader in US air freight and maintain high revenue growth while controlling market share. As stated in the case, FedEx was changing the traditional pension plan to a cash balance plan due to recent accounting rule changes and employees desired to make pension plan more portable.
The primary focus of FedEx is that their people are the primary entity in the value chain and that’s why it is important to focus on the employees first. However, FedEx Corp is facing a lot of problems in their pension policy. Two key problems that FedEx faced pertaining to compensation and benefits: (1) FedEx must determine the best account exclusive compensation plan for the combined of FedEx Express and FedEx Ground services that is in accord with the recent accounting rule changes and (2) FedEx must decide how to appropriately evaluate the understanding and successes of the new cash balance plan along with a positive acceptance from all employees. The new cash balance plan employees’ will receive annual pay credits based on a points system and the combination of age and service will can range from five percent to eight percent of the pay. The problem is FedEx will cap their contribution $500 with no inflation protection. Many employees

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