Executive Summary
Human resource management (HRM) covers all types of employee pay. For many businesses, salary is the biggest expense. Monroe seeks employment primarily for pay and perks. Compensation might be financial or non-financial.
Financial compensation is direct and indirect. Salaries, wages, commissions, and bonuses are direct compensation. Hence, indirect monetary compensation includes all financial advantages omitted from direct financial compensation (Ivancevich & Konopaske, 2022). Vacation, child care, and various insurance are some of its advantages.
Moreover, an organization may offer acknowledgment, respect, and acclaim. The research investigates Jim Hummer’s “job roles and offers” email to Monroe (Hall, Malhotra, & Bennett, 2008) to fulfill the intended financial (direct and indirect) compensation package. The paper will also include an acceptance letter and executive summary.
Brief Description of the Case Study
Harvard Business School graduate Monroe Davis is the case study. Jim Hummer, Whole Health Management’s founder and CEO, offered Monroe. Monroe is thrilled and recalls his meetings with Jim. Jim invited Monroe to the management team’s holiday party at the Harvard Business School Health Management conference in December, where they started dating. Jim became interested in Monroe’s ability and wanted him to work for his healthcare firm.
Hence, Monroe must use the compensation template to offer Jim fairly. It would be best to fill in salary, performance bonus, stock options, relocation allowance, fringe benefits, insurance, dues and licensures, continuing education stipend, and Employee Help Program (Hall et al., 2018). Monroe must make a fair offer based on his work duties, which include managing customer connections and contracts, increasing existing contracts, and generating new client businesses.
Compensation Package
A compensation package creates an equitable system for employers and employees. Thus, a fair compensation package should pay people according to their skills, effort, and training. Second, balancing benefits, pay, and other rewards creates a logical reward package. A compensation package should be cost-effective by staying within what a firm can offer. Incentivized, secure, and staff-friendly compensation packages are important. Hummer uses a pay-level decision.
Ivancevich and Konopaske (2022) suggest using high-pay, low-pay, and comparable pay to attract employees. Patnaik, P., & Suar (2019) insinuated that higher pay means paying more than average. This assumes management pays employees. Paying the minimum to hire enough staff is low. When external and internal forces prevent them from paying, companies use such methods, hurting sales and profits.
Comparable pay is based on the cost of living and purchasing power. Hummer lures Monroe with high pay. Hummer’s email says Monroe should be comfortable with his proposal and perform so well that the CEO feels bad about Monroe’s earnings. The CEO believes a higher salary will attract and retain top employees like Monroe. Productivity determines salary, and the compensation package includes these goods.
Salary
Job evaluation, job analysis, pay guidelines, salary surveys, and promotions are used to evaluate salary. Monroe will utilize the 2005 Harvard Business School MBA wage survey per industry. Monroe will use the health-related services compensation range of $100,000 (25th% base salary) to $125,000 (75th% base salary) for the salary section. The compensation plan will use base pay, which Milkovich, Newman, and Gerhart (2022) define as staff salaries without benefits, raises, or incentives. The base pay excludes commission, stock options, and health insurance.
Consequently, base pay was crucial to determining the optimal wage. It is based on market pay rates for similar work in the same industry, the availability of candidates to do the job and tasks, and employer pay rates (Ivancevich & Konopaske, 2022). Hofmann (2020) states that base salaries dominate many employees’ remuneration packages. According to the author, management matches base pay with the external market medium of 50% for full-time personnel.
Hence, Monroe’s full-time employment at Whole Health Management will aid in the formulation of pay packages. Matching the base salary to the 50% market compensation is to attract and retain talented personnel. From Hummer’s email, Monroe should expect merit pay or job compensation. Hummer underlines that more salary has no forgiveness; therefore, Monroe must work hard depending on his compensation package suggestion. Hence, Monroe should remember that productivity increases income when negotiating his salary.
Bonuses
Hofmann (2020) states that bonuses depend on meeting a company’s annual goals. Goals will determine bonuses. Vacation, sick leave, personal time, and holidays are fringe benefits. Monroe’s pay is as follows.
References
Aparrtment.com. (2021). Euclid Grand. Web.
Ellig, B. R. (2019). The complete guide to executive compensation. McGraw Hill Professional.
Hall, B. J., Malhotra, D., & Bennett, N. (2018). Name Your Price: Compensation Negotiation at Whole Health Management (A).
Havard Business School. (2021). Executive Education. Web.
Hofmann A. (2020) Compensation and Benefits: Essentials of Base Salary. In: Zeuch M. (eds) Handbook of Human Resources Management. Springer, Berlin, Heidelberg. Web.
Ivancevich, J. M& Konopaske, R. (2022). Human resource management. New York: Mc GrawHill.
Milkovich, G. T., Newman, J. M., & Gerhart, B. (2022). Compensation. Homewood, IL: Irwin.
Patnaik, P., & Suar, D. (2019). Analyses of publications on compensation management from 2004 to 2017. Compensation & Benefits Review, 51(2), 55-76. Web.