Compensating Employees

1. Describe the compensation philosophy of Maersk and how the market influences this philosophy.
2. Determine the value of salary surveys to an organization.
3. Describe the advantages of discretionary benefits to Maersk.

ANSWER

Compensating EmployeeS

Compensation policies are essential as they inform the workers about potential packages that they stand to receive in their respective positions. Companies must develop and implement policies that align with their workforce’s needs, interests, and welfare. Overall, compensation policies expose workers to the structure of their salaries and other possible achievable benefits they stand to achieve from an organization.

Maersk’s Compensation Philosophy

Maersk Company deals with logistical operations and operates internationally. Its compensation philosophy is based on performance and often varies yearly depending on the organizational performance (Maersk, 2021). The fluctuation is based on the desire to protect the businesses’ welfare during hard times. For example, when the company makes huge profits and has a quality performance, the compensation policy is attractive. The development of the compensation guidelines is arrived at during a board meeting where all the stakeholders liaise and arrive at a consensus. Market conditions play a vital role in determining the compensation philosophy. The company size, postulated profits, and competitiveness affects a firm’s philosophy. Madhani (2014) believes that compensational systems must always align with the corporate culture. Payment plans must reflect a firm’s preference and other extrinsic factors. Maersk’s compensation philosophy is thus dictated by market success and its organizational performance.

Value of Salary Surveys to an Organization

Salary surveys are mechanisms that enable businesses to assess packages offered to the workers for specific job classes. One of these surveys’ benefits is to permit an organization to benchmark as they seek to make vital decisions on workforce compensations. These surveys expose the top-leadership level about the expectations and interests that the workers have as far as their contribution and benefits are concerned. This paves the way for informed actions where leaders develop fair and competitive salaries for the workers. According to Sule et al. (2015), quality wages, salaries and other incentives act as motivational tools for enhancing organizational performance. By creating the best compensation philosophy, an organization paves the way for optimal growth and development. They select salary caps that are viable for each position in the workplace. Notably, salary surveys set corporate pay standards and inform an organization about strengths that they need to invest in for optimal growth. This opens opportunities for selecting potential workers and retaining individuals who possess admirable traits and abilities.

Benefits of Discretionary Benefits to Maersk

Discretionary benefits entail incentives that are not incorporated in legal frameworks. Life insurance, sick, and maternity leave are key examples of discretionary benefits businesses provide to their employees. Maersk can engage these benefits to boost its workforce. However, it is essential to expose the workers to these benefits to ensure that they understand and agree with them. One of the key benefits that the firm stands to benefit from is improved employee morale. These benefits boost their package where leads to improved job satisfaction and morale. The company stands to gain from the quality and progressive growth as the workers deliver their best. Notably, the company develops an excellent interpersonal relationship between the managerial level and the workers. This helps to create a viable organizational culture that opens growth opportunities.

Overall, compensation philosophy, salary surveys, and discretionary benefits are essential elements that business leaders must always integrate and implement. They possess the significant capacity to boost their productivity due to the motivational impact on the workers. These aspects should be examined and improved over time to advance organizational outcomes. As they provide growth opportunities for a business, they also ensure that workers build their personal lives by improving their income and living standards.

References

Madhani, P. M. (2014). Aligning compensation systems with organizational culture. Compensation & Benefits Review, 46(2), 103-115.

Maersk (2021). Retrieved 4 February 2021, from https://www.maersk.com/.

Sule, O. E., Amuni, S. I., Obasan, K. A., & Banjo, H. A. (2015). Wages and salaries as a motivational tool for enhancing organizational performance. A survey of selected Nigerian workplace. EuroEconomica, 34(1).