BUS FPX 4043 Assessment 1 Creating a Compensation Philosophy
Phillip February 27, 2024 No Comments

BUS FPX 4043 Assessment 1 Creating a Compensation Philosophy

BUS FPX 4043 Assessment 1 Creating a Compensation Philosophy

Name

Capella university

BUS-FPX4043 Compensation and Benefits Management

Prof. Name

Date

Creating a Compensation Philosophy

Business Description

The business operates as an LLC concrete construction company, situated in the rural town of Enosburg, Vermont. Due to the nature of the construction field, work schedules are often unpredictable, requiring overtime, and employees are subject to layoffs during winter months. Consequently, employees are paid hourly and fall under nonexempt status as per FLSA regulations (Newman, 2019). The company comprises two crews, each consisting of a job foreman, an experienced form setter, and two general laborers, totaling eight employees. Being a service business, the company caters to a loyal clientele base of professional residential and commercial building contractors (NAICS Association, 2019).

Salary Determination Factors

The business aims to provide affordable yet quality concrete projects to foster socioeconomic growth within the county. To achieve this, wages are determined based on several factors including the company’s startup status, local cost of living, employee availability, experience, minimum wage laws, industry standards, offered benefits, and occupational hazard risk (Pay Factors Complete Guide – What Are Pay Factors in 2020, 2020). In a region dominated by farms, job options are limited primarily to farming, construction, and supporting businesses, with wages typically hovering slightly above minimum wage. Given the physical demands and risks associated with concrete work, wage rates are adjusted to reflect industry norms while also considering the inherent risks involved (Kassa, 2020).

BUS FPX 4043 Assessment 1 Creating a Compensation Philosophy

Role of Benefits in Compensation Package

Benefits play a crucial role in attracting and retaining employees, thus the business opts to offer benefits despite not being legally obligated due to its size. Group health insurance, with the business covering 60% of the premium, is provided to employees. Additionally, a unique bonus system based on yards of concrete poured incentivizes teamwork and productivity, reinforcing the idea that all employees contribute to the company’s success. Paid vacation, sick leave, and holidays are also included in the compensation package, with provisions for future considerations regarding retirement plans and profit sharing (How Many Employees before Health Insurance Is Required – HealthInsuranceDigest.com, 2022).

Community Businesses Effect on Guiding Principles

The business owner’s decision-making process is influenced by a desire to uplift employees and contribute positively to the community. Despite prevailing wage norms in the area, the owner prioritizes fair compensation and benefits for employees, believing that investing in their well-being will yield mutual benefits. By engaging in community initiatives and pro bono work, the business aims to foster goodwill and collaboration among local businesses, contributing to overall community development and prosperity.

Conclusion

Drawing from personal experience as a business owner, the compensation philosophy emphasizes fairness, employee well-being, and community engagement. By prioritizing employee satisfaction and community involvement, the business not only thrives but also inspires positive change within the local ecosystem. Ultimately, a culture of mutual respect and support leads to increased productivity, loyalty, and shared prosperity among employees and the business alike.

References

Kassa, B. A. (2020). A Decision Support Model for Salary Structure Design. Compensation & Benefits Review, 52(3), 109–120. https://doiorg.library.capella.edu/10.1177/0886368720905696

NAICS Association. (2019, July 29). NAICS Association. NAICS Association. https://www.naics.com/

Newman, B.G. J. (2019). Compensation (13th ed.). McGraw-Hill Higher Education (US). https://capella.vitalsource.com/books/9781260486100

Pay Factors Complete Guide – What Are Pay Factors in 2020. (2020, May 9). Salary.comhttps://www.salary.com/articles/pay-factors-complete-guide-what-are-pay-factors-in2020/

How Many Employees Before Health Insurance Is Required – HealthInsuranceDigest.com. (2022, August 9). https://www.healthinsurancedigest.com/how-many-employees-beforehealth-insurance-is-required/#:~:text=Who%20Is%20Eligible%20For%20Group%20Health%20Insurance%201

BUS FPX 4043 Assessment 1 Creating a Compensation Philosophy