Compensation Plan Outline Essay Example | Topics and Well Written Essays - 1250 words

Compensation Plan Outline - Essay Example Hence, companies try to adopt different compensation plans as per prevailing industry standards, work environment and employee expectations. Wal-Mart Stores Inc., under the brand name ‘Wal-Mart’ is an American multinational retail corporation. Being one of the largest retailers in the world, it runs chains of departmental stores and discount stores with large discounts. It can be declared as the world’s biggest private employer with 2.2 million associates worldwide. Hence, they ought to have a well planned compensation plan so as to motivate each associate to give their best. The competitive compensation package of Wal-Mart touched $5.2 billion last year in the United States. The employee wages are classified and structured depending on experience, skill set, problem-solving abilities and job accountability. Every associate is qualified to receive a ‘performance bonus’, based on the performance of their stores. A full - time employee is eligible to re ceive bonuses up to $1,800 at Wal-Mart per year. Also, the company is known to reward hourly associates and assistant managers who have completed 20 years of service in the company, thus motivating employees to give their long term service to the company. It is vital for a company to develop a broad minded outlook while making compensation plans for its employees. It is essential to consider health benefits and various saving plans for the associates apart from their regular weekly / monthly wages. These health benefits include the spouse and all children of the associates, hence taking care of the employee and his family. They also provide varied coverage, ranging from $5 per month to $8 per month depending on the region of work. Wal-Mart provides various ‘Profit share plans’ and ‘Stock purchase plans’ to help their employees earn money in a faster way (â€Å"Wages and Benefits†, 2007). However, Wal-Mart’s compensation strategy has been widel y debated and severely criticized for its low worker’s compensation, which is believed to be influential in its ability to sustain its low prices. There is no doubt that the low product prices greatly benefit Wal-Mart’s consumers, especially from lower to middle class families. Wal-Mart’s strategy has been observed to focus on opening stores in ‘lower income’ areas. This indicates the company’s intention to minimize on worker compensation, along with other factors such as retail and merchandizing. The opening of Wal-Mart stores in a new locality is seen to lower the general wages on an average by 0.5 – 0.8% per worker in the merchandizing sector and by 0.8 – 0.9% for grocery workers (Bernstein, Bivens and Dube, 2006). The compensation plan has been slammed for charges that female employees are paid less than their male counterparts despite their achievement of greater performance ratings. The compensation plan at Wal-Mart is str uctured in such a way that hourly jobs are paid less while management positions are paid better. The process of promotion is defined in such a manner that an employee must complete a ‘Management Training Program’ in order to be appraised to the position of an Assistant Manager. It has been noticed that the other big retailers are found to pay more wages compared to that of Wal-Mart. There have been reports of employee grievances that show wage increments of as low as 20