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Marks & Spencer Company Compensation Essay

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Updated: Apr 2nd, 2020


Compensation at the workplace influences the performance of any organisation in a number of ways. Most researchers have established that compensation of employees is directly related to the motivation that they get from their places of work. The result is the output that they generate for the organisation (Moriarty 2014). One of the commonest methods of employee compensation at the workplace is financial compensation. All organisations have a detailed and elaborate manner of financially compensating their employees.

The many studies in this area have established that employees who are adequately compensated have a better performance at the workplace. They increase the productivity of the organisations in which they work (Moriarty 2014). Marks & Spencer Company is one of the renowned retail businesses in the UK. The company has employed over 80,000 people. It has recorded significant success in this industry over the years. In fact, it was among the first British companies to make over £1 billion in pre-tax profit.

This paper analyses the competitive strategic compensation choices that are in place at the company. The essay also looks at the employee benefits that are in place in this business, the determination of employee salary, and the incentives and challenges in this area of the company.

Strategic Compensation Choices

The company’s strategic compensation choices have contributed to the success in the retail industry for Marks & Spencer. The company recognises employee as the most important stakeholders in the production process. Thus, it has, made sure that the rights and privileges enjoyed by these individuals are respected. Some of the rights that employees at Marks & Spencer enjoy include a decent salary.

The commonest form of employee motivation and compensation that is used in most companies is the salary, which is paid for the services that employees provide to the companies (Moriarty 2014). The laws that bind the contract and the company govern the provision of financial compensation in employment, which follows the laws in employee financial compensation.

The strategic compensation choices for this company are dependent on the available resources and the amount of financial revenue generated by the company. Some of the choices that the company processes include the provision of adequate services to employees. Workers in this company have a variety of choices of benefits for the work they do and the services that they provide to the organisation.

Financial compensation that is already in place at the organisation is the single most important form of reimbursement at the workplace. However, rewarding is also done in the company. This corporation also has the choice of providing the employees with specially rated services and cheap products compared to the retail prices for these goods and services.

The other choice that is available for Marks & Spencer in relation to compensation of employees is the provision of gifts and rewards for special employee achievements. If an employee achieves a set target, the company can reward him or her. Rewarding and gift management constitute other recognised methods of motivating employees. They have been found significantly effective in increasing employee motivation and performance.

Marks & Spencer Company operates in over ten countries and regions where it provides services and goods to millions of diverse individuals. The company has a diverse workforce. These individuals require different compensation and motivation methods. The adopted compensation method for the employees should be sustainable and adequate for most of them for it to be successful.

Compensation Practices

Financial compensation is the most commonly used method of compensation at Marks & Spencer, just like most other companies in the world. The company provides each employee with a salary or wage as dictated in the employment contract that the two parties enter. The employees are paid according to a set salary for the job classification and qualifications that they display.

The average employee earns a salary that is compatible with the one that is offered to other employees in the same industry, but working for different companies. At the beginning of the contract, employees get a briefing of the terms of their employment before signing the contract that also includes the salary scale.

Workers are employed based on the above contract. Some of them work on a part-time basis. The amount of money paid to the employees is related to the duration of employment at the company, the duration of the contract, job group, and the prevailing rates in the same industry (Larkin, Pierce & Gino 2012).

The company is one of the most competitive in the form of retention of qualified employees. It carries out training sessions for employees on the company’s account. This strategy has enabled Marks & Spencer recruit and maintain qualified and highly specialised workforce.

Marks & Spencer has a detailed employee benefits programme. The company has established a strong human resource department, which has developed the necessary benefits for each of the employees. The employee benefits practices in most organisations entail the provision of special services that allow the employee optimum performance.

In the case of Marks & Spencer, the existing benefits are mainly financial in nature. The company provides the employees with special health benefits. Payment for the health charges is incurred while working for the company. Employees also enjoy retirement benefits. They are also expected to work hard for the rewards that the company provides for special achievements at the workplace.

Job Evaluation and Salary Grading Structure

The process of job evaluation at Marks & Spencer is a complex one. It leads to the description of the best practices in the industry. Marks & Spencer Company has a job evaluation process that is detailed and appropriate for an organisation of its size. Employees are assessed for possible rewarding while gauging the performance of the organisation as a whole.

Most branches of this company have a representative department of the human resource department. This part of the organisation is responsible for the assessment and evaluation of the performance of the employees in these branches. Most other companies in the sector in which Marks & Spencer Company operates have a similar job evaluation structure.

The company has a job grading structure that ensures that employees’ salaries are standard and according to the universally accepted levels. Some of the strategies used during the process of employee salary grading include the prevailing conditions in the industry.

Marks & Spencer has previously underperformed in the industry in relation to the recorded success of previous years. The company was reported to hire many employees during the period of adequate performance while the poor performance period was occasioned by major job cuts in this organisation.

The salary grading structure that is utilised in this organisation also includes the qualification of employees who are recruited and shortlisted for employment. The highly qualified employees are provided with a salary grade that is better than that of similar companies in the same industry. The reason behind providing employees with the salary is due to the desire to retain them in the company and make it competitive. Marks & Spencer also uses the salaries provided in competing companies to come up with a grading structure.

Poor paying organisations can lose their employees to better paying ones within the same industry. Therefore, this situation prompts organisations such as Marks & Spencer to provide salaries that are equivalent to those that are provided in competing companies.

The other factor that is considered in Marks & Spencer while establishing the salary grading structure in this organisation is the performance of the organisation, especially the regions in which the companies is operating. Since the company has many branches that are spread all over the world, some of the branches that post poor performance pay their employees based on this performance.

Poorly performing branches often have poor pay for employees as compared to the branches that post better returns. The above considerations are made when coming up with the grading structure for employee salaries in this organisation. What this strategy means is that different employees at different levels within the organisation have different salary levels. This finding is true for different individuals who work in the same organisation with different qualifications.

The Adopted Incentives

For companies to attract and retain qualified personnel, they should adopt some incentives to attract these employees and retain them within the organisations’ structure. Companies that do not adopt these incentives often have a high employee turnover. The reverse is also true. Marks & Spencer is a company that has managed to attract and retain highly skilled workforce.

This finding is partly attributable to the incentives that are in place at the organisation. The main incentive that is adopted in Marks & Spencer is the compensation for the employees, which can be described as being adequate for the organisation of its size.

Salaries and wages that are paid by this company are among the best in the industry. The current employees together with other potential workers demonstrate a liking for this employer. The company uses the remuneration as the main motivation for employees (Larkin, Pierce & Gino 2012). Remuneration is one of the most effective incentives to attract and retain employees.

The reasons behind the use of remuneration as a type of incentive include the provision of natural motivation and improved employee performance. The improved performance ensures that employees work towards achieving the organisational goals. Eventually, this strategy leads to positive performance of the company.

The other incentive that is used in this organisation is in the form of promotions. The company, just like most other organisations, promotes employees that perform exemplarily well in their line of work. This move ensures that such employees are able to work towards the positive performance of the organisation.

Promotions ensure that employees are constantly working towards the set organisational goals, including the positive performance of the organisation. The eventual result of the improved performance at the workplace ensures that the company improves in performance (Larkin, Pierce & Gino 2012).

The other incentive that is used by Marks & Spencer Company to ensure that the business performs positively is the provision of rewards for achievements in the various areas. The organisation has some predetermined goals for each of the employees and departments. When these goals are achieved, the management rewards the concerned employees.

The rewards offered to the employees are linked directly to the positive performance at the workplace (Larkin, Pierce & Gino 2012). This performance is also directly linked to the performance of the organisation as a whole. The above incentives are mainly used to motivate employees to work towards achieving personal and organisational goals.

The company is also involved in the training of its employees. Training is a recognised incentive in the industry. It leads to the education and improved performance of the company in general. The training that is carried out for the employees can be external and internal.

Marks & Spencer Company offers frequent training programmes at the various branches. It often sponsors employees to pursue other related and relevant courses in external organisations and institutions. This plan contributes to the performance of the organisation by cultivating talent in the employees.

Laws that Apply to the Company

A number of laws dictate the compensation of employees in organisations. For Marks & Spencer, the main law that determines the mode of compensation is the one that describes the type of contract between an employer and his or her employees.

The UK has laws that define the contract of employment and/or how one qualifies to be an employee in a certain organisation. Contract of employment is the main law that dictates the employee compensation. This contract should contain the compensation that is available for the employee at the time of employment.

According to the law, an employee is someone who has entered a contract with another individual to provide services on behalf of this party for payment. The contract contains the compensation measures and the exact amount that is attributable to each of the employees. The laws that operate in the various countries permit employers to compensate their employees.

Employees are also legally responsible for a number of compensatory measures, including the salary that is guaranteed for the services that are delivered to the company. The compensation measures that are in place at Marks & Spencer are safeguarded in the law. Employees are assured of these compensatory measures as long as the contract is in place.


Marks & Spencer has a number of challenges that can be attributed to the compensatory mechanisms in place. Some of the challenges include the maintenance cost of the compensatory measures and the processes of evaluating the effectiveness of the compensatory mechanism. The above measures that are used to compensate employees are expensive.

They lead to the loss of revenues. Some of the expensive measures used in compensation include the provision of rewards, promotions, salaries, and other forms of remuneration. Although these compensatory measures are adequate to ensure improvement in performance of the company, they are expensive and hard to maintain.

The compensatory mechanisms that are in place at Marks & Spencer are also not standard for the different branches of the organisation. In fact, each of the outlets in different countries has different compensatory measures that are aligned with the laws and regulations of these countries.

This situation presents a challenge to the organisation due to the difficulty in harmonising the compensatory mechanisms. The other challenges that the business faces in the compensation of its employees include the poor feedback that is obtained from these processes. The company has traditionally conducted surveys to establish the effectiveness of the compensatory measures that are in place. However, these measures have often been flawed.

A number of recommendations are available for this organisation in relation to its employee compensation. It is a fact that the use of employee compensation is associated with improvements in the organisational performance that is related to improved employee performance at these organisations.

Therefore, the company should ensure that the compensatory measures are not limited. The company should ensure no reduction in the number of incentives that it provides to its employees. This claim is based on the desire to reduce the cost of carrying out the various activities in compensation.

The other recommendation that Marks & Spencer should adopt is harmonisation of its incentive measures. The company practices different compensatory measures that are aimed at improving the performance of different employees in different parts of the world. The harmonisation of the different incentives will ensure that the employees in the different branches of the company are treated equally.

This strategy is meant to improve the performance of the organisation and its ability to attract trained and qualified workforce. This move will also ensure accountability from the various branches. If adopted, the above recommendations will lead to the establishment of a working compensation mechanism for Marks & Spencer.


In conclusion, compensation of employees is one of the vital functions of an organisation and its management. This essay has looked at some of the compensatory mechanisms that are in place for Marks & Spencer. It has established the few challenges that are available in the business. Some of the mechanisms include remuneration, rewarding, promotion, and employee training.


Larkin, I., Pierce, L. & Gino, F. 2012, ‘The psychological costs of pay-for-performance: Implications for the strategic compensation of employees’, Strategic Management Journal, vol. 33 no. 10, pp. 1194-1214.

Moriarty, J. 2014, ‘Compensation Ethics and Organisational Commitment’, Business Ethics Quarterly, vol. 24 no. 1, pp. 31-53.

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