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Wal-Mart Compensation Plan Research Paper

Evaluating the existing compensation plan to determine if it is the most appropriate for my company. Explaining the rationale

Wal-Mart provides incredible compensation plan for its employees. For instance, the company offers Annual Incentive Payments through a considerable Management Incentive Plan. This is done upon accomplishment of pre-set performance objectives. The company designs its yearly incentives to recompense the attainment of annual performance goals.

Evidently, the institution seeks to leverage its performance and gain competitive advantages by adopting viable human resource administration techniques as well as compensation plans that foster fairness (Altman, 2000). The practices give superior plans that facilitate a faultless match amidst work done and pay. Compensation and benefits encompass the incentives that people are subjected to following work.

Compensation refers to the reimbursement benefits provide to pay for the service rendered or professional contribution provided. Organizational managers are obligated to establish polices that enhance retention of workers who give relevant support in regard to the operations and performance. Their preservation is critical in the organizational context institutions (Ezzeddine, Hachicha & Bouri, 2011).

The existing compensation plan of Wal-Mart seeks to leverage performance in the institution by giving necessary rendezvous mechanism that are able to enhance understanding and designing of credible work terms. This is attainable through the use of information systems (IS) that foster communication amidst the workers and the employer.

The system equally augments effectiveness in service delivery by enhancing consumer satisfaction. As noted, the available compensation plan clutches relevant capacities that allow Wal-Mart to comprehend its workers, needs and harmonious strategies to fortify their welfare (Camerer, 2003).

This boosts employee retention that is critical in promoting performance. It also guarantees enough recognition of employee’s efforts that add to their wellbeing. The compensation plan established and embraced by the company is apt.

Determining the most beneficial ratio of internally consistent and market consistent compensations systems for Wal-Mart

It is evident from Wal-Mart that remuneration as well as work benefits involve physical and non-physical incentives reimbursed to workers for services offered. The reimbursement protocol or payment system is established to consider worker’s duty to guarantee fairness. It is a motivational plan that determines an individual’s effort as well as contribution in the delivery of services.

There exist numerous theories that characterize the employee’s compensation formula (Altman, 2000). The theories pose diverse procedures that control the recompense process aimed o ensure evenhandedness and output based remuneration plan.

This is vital since the theories seek to eliminate improper and discriminatory remuneration practices. In this regard, need theory states that workers perform exemplarily when their needs are met (Rolfe, 2007). It continues to state that individual’s productivity is at stake in when his or her needs are hardly met (Rolfe, 2007).

The valuable ratio of internally dependable and market consistent remuneration plans for Wal-Mart equip different stakeholders in organizations with relevant work-oriented guidelines. This is meant to augment performance. It is important to agree that these provisions present valuable system of operation that guarantees equality in the delivery of services (Owens, 2006).

They coerce the organization to handle its workers with absolute decorum and build up favorable compensation plans that equals their input. It is vital that the provision fights for just remuneration for a levelheaded days work. They endeavor to eradicate unwarranted practices that are synonymous to prejudice and violation of staff rights.

Accordingly, justice theory motivates workers to make certain that their rights are under complete delivery. The system is established to foster each stakeholder to comprehend and practice their rights aptly to make possible sanity and commendable performance.

Camerer (2003) argues that Wal-Mart staff has the right to be compensated aptly for the work done while the employer (Wal-Mart) also has the mandate to attain value for its money.

Evaluating the current pay structure used by Wal-Mart and assessing the recognition of employee contributions

The present compensation structures created by Wal-Mart differ from one country of work to the next. However, the compensations have been tied to the worldwide minimum wages as determined by the United Nations.

The present pay plan provides a methodical advance that defines (in legal terms) the enactment of equitable working situations. The current compensation plan is established to sanction employees by allowing them to comprehend their rights and terms of work. The plan states that there should be a “fair pay” for individuals regardless of the situation.

It disallows discrimination and iniquitous practices that disfavor middle ground workers. The system gives viable incentives seeking to escalate understanding of worker’s rights in the realms of compensation, as well as benefits they are supposed to earn in their station of work.

Accordingly, the pay plan presents significant incentives that foster education to workers as well as the legal workers on the best tactics for the collection of owed benefits (Owens, 2006). It is important to agree that this ensures that employees can successfully request for their unpaid wages from the organizations that hardly compensate their services.

Additionally, the pay plan motivates workers to practice their rights to augment their economic situation. This ensures that their monetary solidity is ensured due to the importance of money to the humanity. The framework also presents a critical and relatable elucidation on the functional implementation in terms of worker’s perceptions on just or imbalanced allotment of resources.

Idyllically, Wal-Mart workers have certain dreams that appertain to remuneration based on their verdict on the firm’s performance (Rolfe, 2007). The perceptions sway their characters and performance particularly when their compensation is not plenty to satisfy their budgets.

Two recommendations for improving the effectiveness of the discretionary benefits provided by Wal-Mart

It is vital to note that the Wal-Mart’s discretionary benefits have exclusively exhibited lofty operating effectiveness. Nonetheless, there are still copious opportunities to develop it more. One of the advancements adoptable by the firm to augment its compensation structures is to boost the redistributive provisions of discretionary benefits. The major challenge experienced with the discretionary benefits regards equity.

According to the scheme, individual benefits are supposed to be created for the employees and the total benefits contained for their performance should be influenced by the productivity (Tan, 2002). In this regard, employees who merit good discretionary benefits can enjoy extensively during compensations than the deprived workers who could jus work on average.

Such provisions enhance the nature of social inequality that exists within workers. This thwarts the role of having other workers benefit from their discretionary benefits (Krivohlavy, 2012).

Notably, Wal-Mart reflects on adopting avenues that would aid in ensuring that central discretionary benefit plans contain redistributive elements. Redistribution was never engrossed in the discretionary benefits plan so as to institute, ratify, and endorse vital scheme elements. Redistribution should be endorsed as it minimizes the social and performance differences endured by the old citizens during their younger ages.

This is a vital matter in the context of authority and allocation of apt discretionary benefits to the employees. Fundamentally, the boosts that can be made to augment the existing discretionary benefits are many and involve the aligning of the present legislation and streamlining the compensation structure through apt administration of the plan.

Lin & Yin (2000) claim that one way of augmenting equity amongst the employees is to partially enact the other rival’s discretionary benefits identified to have bigger redistributive elements. This is doable by analyzing the total income and profits the company attains in a financial year. A progressive formula should then be applied in order to give the employees’ basic discretionary benefits.

Through this method, low income earners are assured of higher pre-payment income quantities while the high income earners will have lower pre-retirement income percentages as well as discretionary benefits (Lin & Yin, 2000). The government also needs to redesign the schemes in order to offer maximum protection against inflation.

According to Devolder, Jansesen &Manca (2012), inflation risk is a financial risk that affects the benefits offered to individuals from a pension fund. It has been noted that much of the funds obtained from the sales are not used fully in the discretionary benefits. Wal-Mart managers must enact conventional methods to address the predicament of employees especially in the remuneration and working conditions.

This will influence the aspects of compensation policies. This is to hinder employee turnover that may deter operations in diverse business departments thereby compromising performance.

It is crucial for the Wal-Mart executives to evaluate and understand employee needs to enable development of trustworthy mechanisms of addressing their concerns. According to Jesper (2007), institutions that give exemplary rewards, for instance, material or non physical incentives reports good returns.

The types of employer-sponsored retirement plans and health insurance programs provided by Wal-Mart and comparing with major competitors

Retirement plans and health insurance programs embraced by Wal-Mart are diverse. The company invests in engaging the Ordinary Account savings to purchase homes for its employees through well-structured retirement schemes and asset enhancements.

In other contexts, retirement schemes offered by Wal-Mart enable employees to continue earning a steady income and access considerable health facilities during their retirement (Camerer, 2003). This provides such retirees with enough time to invest considerably in different areas to further enhance their living limits, for example, in the stock markets.

Retirement structure and health cover programs allow the retirees to get monthly revenue until their death and give basic educational requirements for their dependents. Using retirement plans, workers can subscribe premiums for different insurance covers including the Dependent’s Protection Scheme (DPS) that insures the member’s family.

This is relevant in case such a member dies or becomes irrevocably disabled. Home Protection Insurance Scheme ensures that member’s are under protection from reclamation in case they die or victimized with disability. MediShield allows members to insure their medical costs including those of their dependents particularly when there is a severe and prolonged illness (M.O.M, 2013).

The Public Housing Scheme allows the members to purchase houses without compromising their retirement savings plans. Generally, it is vital to concur that retirement structure and health indemnity programs given by Wal-Mart are important in serving citizens to plan for their retirements adequately.


Altman, M. (2000). A behavioral theory of economic welfare and economic justice: A smithian alternative to pareto optimality. International Journal of Social Economics, 27(11), 1098-1131.

Camerer, C. (2003). Behavioral game theory: Experiments in strategic interaction. New York, NY: Russell SAGE.

Ezzeddine, B., Hachicha, N. & Bouri, A. (2011). Portfolio choice in emergent markets: Between the rational and the behavioral theories. Global Business and Management Research, 3(3), 296-318.

Jesper, B. (2007). Organizational diversity, labor markets, and wage inequality. The American Behavioral Scientist, 50(5), 659-676.

Krivohlavy, L. (2012). HR Compensation & Benefits Management System, Payroll Management System. Web.

Lin, S., & Yin, J. Z. (2000). Social security reform: Options for China. Singapore. u.a.: World Scientific.

Owens, M. (2006). The behavioral effects of wage and employment policies with gift exchange present. Ohio, OH: Ohio State University Press.

Rolfe, S. (2007). Predictive ability of the efficiency, agency and tournament theories at the non-executive level: Evidence from Canadian compensation survey data. Web.

Tan, C. H. (2002). Singapore financial and business sourcebook. Singapore: Singapore University Press.

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