Career Development Plan – Compensation Planning Essay

Introduction

I am pleased to forward my recommended compensation plan for the Employment and Hiring team of ten staffers and one Supervisor. This is crafted around the established objectives for the team, to wit:

1. Provide the operating and other staff departments with new and replacement hire within a reasonably short lead time after the need is recognized or formally requisitioned.
2. Ensure proper screening of recruits to at least meet minimum skill requirements and InterClean standards for work habits, customer service attitude, team cooperation, potential for growth, enhancing company image on contact with all relevant stakeholders, and minimal propensity for turnover.
3. Obtain from new hires a complete set of educational and skills training certifications, employment record, and references.
4. Secure credit and criminality background checks.
5. When the department concerned has designated the desired candidate, accomplish contract signing, arrange expeditiously for medical examination, and other compliance-related in-processing.
6. Post-induction of new hire, turn over employee 201 records to Industrial Relations for future reference.

In pursuit of these qualitative and performance objectives, the most strategic compensation plan should comprise the following integrated elements:

1. All current performance and seniority increases and bonuses shall be frozen at a maximum of 5% of base pay in year 1 and suspended for the next two years of the new compensation plan.
2. A lump sum team profit-sharing bonus shall be paid equal to 2.5% of InterClean after-tax net income or 15% of Employment Team gross annual pay, whichever is lower, if the Employment Team meets at least five of six performance appraisal objectives.
3. A team-based variable-pay system shall replace all performance and seniority entitlements. This shall be based on a percentage of company payroll previously budgeted for merit and longevity increases. If this percentage is equal to, say, 12%, the Employment team undertakes to be awarded a sliding scale of 15% for topping performance standings awarded by the operating departments in a forced-choice ranking method, 11% for achieving middle ranking, 3% for “below expectations” ranking and 0% for “completely unsatisfactory” or bottom ranking.
4. Both lump sums paid to the team shall be allocated as follows: 15% for any HR training of the team’s choice, 10% to incentive or holiday packages, and 75% for distribution within the team. The latter will in turn be allotted based on peer rankings done within the team where the supervisor’s appraisal shall have a weight of 25% and collective peer ratings 75%.
5. The bonus and performance pool shall be allocated as follows: 1% for the poorest-performing team member, 2% for the next-higher ranked colleague and up to 25% for the best-ranked member of the team.

This proposed compensation plan has several advantages. Since base pay will never be degraded, we guarantee that each team member’s basic physiological and security needs will be met, as will equity with the external labor market. However, monetary rewards will depend on two critical factors. The first is how well Employment as a team satisfies the expectations of its “customers” in all other functional departments. Secondly, all team members become acutely conscious of how well their peers regard their contribution to collective “output” and productivity. This hews to the concepts of equitable pay and balance.

The third key advantage of this proposed rewards system is that it is strategic. The profit-sharing bonus aligns employee commitment and effort with improved bottom-line performance by InterClean. As well, it is capped by what the company can afford and still pay other stakeholders, besides making investments for future growth.

Team Performance Appraisal Plan

The internal rankings shall, of course, be multi-factorial. Rather than relying on one single peer rating that may conceal conflict and bias, the team performance shall ask all members to rate each other mostly on strategic performance vis-à-vis “client” departments and secondarily on factors that affect the smooth functioning of the team. An example of the latter is cooperation and initiative for backstopping colleagues who are behind on a new-hire requisition or who have personal and family emergencies to attend to.

Otherwise, the higher-weight criteria in the performance appraisal shall include: ability to operationalize candidate requirements, placing notices on Internet-based job boards and external networking to complement paid want ads, speed of requirements completion, full documentation, zero rejects by other departments of candidates who do not even meet minimum requirements, and 90% new employee retention at least to the end of the mandated probationary period.

References

Cascio (2006). Managing human resources: Productivity, quality of work life, profits. 7^th ed. New York: McGraw-Hill.