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United Parcel Service Compensation and Benefit System

United Parcel Service also known as UPS is one of the largest businesses of the United States. UPS functions globally and covers more than two hundred different countries. UPS is the largest package delivery corporation in the world. The key to the successful performance of UPS is its professional application of logistics and transportation that allows the company to provide fast and high-quality services for all of their clients.

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In the contemporary world where speed and time are the most valuable aspects corporations focusing on quick and timely deliveries and transportations are always in demand. To maintain success and keep being the first choice of the majority of customers around the world and in the USA United Parcel Service pays special attention to the employees it hires.

UPS has a purpose to attract and retain the most experienced professionals in various spheres such as package delivery, operations, driving, package handling, and management. UPS has developed a strong and competitive system of benefits and compensation in order to stimulate the desire to work hard and show excellent results among the employees.

At UPS people are viewed as the most valuable resource. In order to be competitive in the contemporary labor market, the corporation has developed a rather generous total compensation package that includes a number of benefits, perks, bonuses and opportunities for career development and financial growth. Money Magazine’s survey based on two hundred different companies has been assigning UPS to the high ranks for the last several years.

Currently, the company is number eight in the list and it said to have one of the most well-developed benefit packages in the United States. United Package Service provides the system of benefits that is designed to provide generous care for the employees’ and their families. Besides, one special feature of UPS compensation system is its treatment of part-time workers. Such employees are paid hourly wages and are provided with full benefits which include medical coverage and tuition assistance (UPS par. 3).

At UPS, the employees of various kinds are given the opportunity to develop and move forward in their career path, so there are wide pay ranges within different professions. For example, a salary of a UPS truck-driver may vary from $42,318 to $82,481 (Average Salary for United Parcel Service (UPS), Inc. Employees par. 3). The salary of an operations supervisor fits into the range from $26,356 to $81,133 (Average Salary for Operations Supervisor at United Parcel Service (UPS), Inc. Employees par. 2).

Overall, the hourly wages and monthly salaries paid at UPS are ones of the highest in the whole industry, which makes the company highly competitive at the labor market of its sector. At UPS the perceive benefits as a very significant part of the employees’ total compensation. The well developed benefit system employed at UPS is the company’s way to interact with the workers.

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Benefits provide the employees with the feeling of inclusion and let them know that their work is valued by the organization. UPS has a lot of different bonuses and benefits for its diverse workers and even for their family members.

The most important and preferred group of employee benefits is Health and Welfare. United Parcel Service Health and Welfare includes dental, medical, vision, and prescription drug programs, besides, it provides life insurance, child or elder care benefits, business travel accident insurance, long term disability coverage among others (UPS par. 2). In the first half of 2013 the costs UPS spent on Health and Welfare programs increased by 49 million dollars (Tozzi par. 4).

Besides, “UPS spent 33 billion dollars on compensation and benefits in 2012, the largest piece of its operating costs by far” (Tozzi par. 4). This forced the company to cut down some of the costs and cancel the benefits for the spouses of the non-union workers. This policy only affects the spouses that can be covered by their own employers. As a result, “limiting coverage for spouses is expected to save UPS 60 million dollars per year” (Tozzi par. 4).

One more highly valuable benefit program UPS employs is Tuition Assistance. The company appreciates the workers that choose to continue their education and become more knowledgeable and valuable as professionals. UPS is determined to have high qualified team of workers; this is why personal development and progress is valued there.

Assistance Tuition program is available for full-time non-union, part-time union workers, and part-time management employees (Because we know there’s more to life than just what you do par. 4).

UPS also has a Compensation and Savings program which allows the employees to purchase stock on the discount. This is a rather clever program since it encourages the ownership of the company by the members of UPS team of employees and develops higher loyalty and dedication among the workers.

Besides, when the company’s success is directly connected with the personal revenues of the employees it provides better motivation and desire to work harder for the future shared profits. Both union and union free workers who work full and part time are given an opportunity to purchase stock through the program.

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Since UPS is a global corporation that operates in over two hundred countries all around the world, it spends a lot of costs for the innovations and newest technologies providing UPS with the ability to work with large amounts of information and data quickly. Besides, communication is one of the keys to success for large corporations. This is why UPS requires a very professional IT team.

The first IT unit appeared at UPS in the end of 1980s, back then the IT team counted one hundred and eighteen people only, today the IT team of UPS consists of over five thousand of workers (Ross et al. 21). The IT sector is known to be one of the fields that currently experiences massive skills shortage all around the world (Nakayama and Sutcliffe 3). This means that the number of good IT professionals is very small, so the companies must be especially clever to attract and retain such workers.

At UPS, the IT specialists were offered dynamic career paths and the opportunities to be transferred within the infrastructure and across business units. Key employees of this sphere were given ten-year tenure. All of the IT professionals were provided with opportunities to learn and work with the newest technologies. As a result UPS managed to reduce its turnover in the IT sector down to only five per cent.

Today, UPS is often compared and contrasted against another large American package delivery organization called FedEx. The job-seekers choosing between two of these companies face a difficult decision as both of the workplaces are great. Both UPS and FedEx are known for very well-developed compensation and benefits structure.

Comparative analysis of the average salaries of different kinds of specialists at both of these organizations reveals that FedEx pays more to dispatchers, customer service representatives, package handlers, and account executives, whereas UPS has higher salaries for couriers, truck drivers, loaders and un-loaders.

This seems to be a very wise policy since the low-skill jobs such as courier and loader are the ones with the highest rates of turnover, so to minimize instability in these sectors UPS has assigned higher salaries, making these non-prestigious jobs more attractive and at the same time demonstrating that the company leadership values people involved into hard physical labor day by day. The system of benefits at UPS is also more generous when it comes to benefits.

An average truck driver, for example, may earn an additional thousand dollars annually. To increase the success and productivity of their work process, UPS leaders target mainly proactive problem solvers to add to their team of employees.

As a result, at least fifty five per cent of the UPS workers evaluate their co-workers as responsible, active, and ready to deal with professional challenges. The success of UPS as a business is a great demonstration of the role of compensation and benefits system in the creation of respectful and fruitful interaction between the employees and the employers.

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In conclusion, UPS is the largest package delivery corporation in the world. Its employees are some of the best paid ones in the whole industry. In order to attract and retain the best professionals UPS has built a very generous compensation and benefit system that allows the employees to develop their careers and grow professionally maintaining their loyalty to the company.

Works Cited

Average Salary for United Parcel Service (UPS), Inc. Employees. PayScale. 2015. Web.

Because we know there’s more to life than just what you do. UPS. 2015. Web.

Nakayama, Makoto and Norma Sutcliffe. Managing IT Skills Portfolios: Planning, Acquisition, and Performance Evaluation. Hershey: Idea Group, 2005. Print.

Ross, Jeanne, Will Draper, Paul Kang, Seth Schuler, Ozge Gozum and Jessica Tolle. “United Parcel Services: Business Transformation through Information Technology.” MIT Sloan, 331 (2002): 1-34. Print.

Tozzi, John. The Numbers Behind UPS’s Move to Cut Spousal Health Coverage.2013. Web.

UPS. Career Rookie. 2015 Web.

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