Bank of America Compensation and Benefits Paper

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Abstract

Employee benefits and compensation occupy a central position in contemporary business. This is due to the great implications of the same as far as employee retention and motivation are concerned. As a result most business organization is taking keen interest in developing sound benefits and compensation system. This is seen as an important ingredient in organizational success. This happens in two different ways. First and foremost are the attracting, retaining and motivating employees through sound schemes through which their needs and interest are taken care of. Secondly the performance of the organization improves when the employees feel satisfied with the benefits and compensation received from the organization. Therefore a lot of focus has been given to the aspect of compensation and benefits system. This is largely due to the huge role played by the two in the success of the organization. Under normal circumstances the most treasured assets of the organization are the human resources. Therefore every organization strives to have the right atmosphere fro the attraction of talented human resources.

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The success of modern organization hinges on its ability to attract sound employees. Without the best people no organization can make progress. It is against this background that the benefits granted to the employees have come to define a successful organization. This is due to the changing consideration by employees. Now days prospective employees consider benefits give by an organization more than the salary offered. As such employees don’t flock to an organization simply because the salary is good but also due to the benefits and compensation packages awarded. This is due to a number of factors. However lifestyle is the major contribution to the surging expectations of employees on benefits system. The aim of this paper is to take an analytical journey through benefits and compensation systems in organization. For the sake of analysis the paper will focus on the selected organization, bank of America.

Introduction

Employee benefits refer to the additional payments that given to the employee apart from their normal salary. These are normally awarded so as to motivate the employees to work hard and boost the performance of the organization. Benefits take different shapes and forms and are given for different reasons. They include retirement plans, insurance, vacation and disability schemes (Schuler & Briscoe 2004). Compensation on the other hand involves payment programs that are inherently motivational in nature. They include bonus, merit income and commission. Compensation and benefits are therefore of prime importance in the whole operation of business organizations. These happens in two distinct ways, first is the attracting of qualified personnel to the organization.

Modern organizations have an uphill task of ensuring that the best personnel for the organization. Without a sound system of compensation and other benefits an organization will not be in a position to attract the best employees. Therefore every organization strives to have the best schemes in place so as to ensure he best employees are in the organization. The second parameter involves motivation. Attracting the best employees in the organization is one thing, motivating them to perform better is the another thing altogether. Therefore it is not enough to attract the employees in the organization. Adequate care must be taken to ensure that the employees are motivated to work for the success of the organization. Compensation serves this role well. Reasonable compensation schemes motivate employees to put in their best efforts for the success of the organization.

The purpose of compensation is to optimize the value of an organization’s stakeholders. Under normal circumstances the organization exists primarily to serve the purpose of the stakeholders. As a result, they always endeavor to get back value on top of their investment. Therefore employee benefits serve well the purpose of giving stakeholders a better return on their investment at the same time achieving the objectives of the organization. First of all, employee benefits play a pivotal role ion the creation of value through a comprehensive process involving various aspects and segments of the organization.

As a result integrated marketing as a strategy of benefits is holistic in nature and incorporates several factors. This makes the whole organization process more convenient and successful in its application (Ball 2008). Compensation involves three distinct parameters which in its application. They include the creation of an organizations identity, mobilization of people in support of the organizational identity and communication. Through these three aspects, market integration creates value for the organization establishing a pool of resources and network through which the endeavor of the organization are achieved. The value of bonuses is vast and most predominantly translates into business performance. This happens through different ways. The perception of the organization by customers’ changes favorably, this happens due to the value created through integrated marketing. The pooling of human resources translated into synergy which plays a pivotal role in the success of the organization.

Significance

Benefits and compensations are increasingly becoming important in modern business. This due to the fact that most employees are willing to take up job that are less paying as long as they are assured better benefits and compensation schemes. The growing focus on benefits and compensation can be traced from the changing perception. Lifestyle is one of the most relevant aspects of the whole picture (Tropman 2001). Due to the changing lifestyle most employees consider compensation and benefits more than salary. As a result in odder for organizations to attract qualified and talented personnel it is imperative that they come up with good schemes for compensation and benefits. Another important aspect of benefits and compensation is the motivation of staff. In order for the employees to put in their best efforts organizations must motivate them (Gifford 1990). Financial aspects of motivation involve the use of benefits and compensation schemes. This makes the employees to boost t6heri efforts in working for the organization. This goes a long way in ensuring organizational success. Therefore business organization must put in all their efforts to ensure that they devices attractive schemes for motivation of their employees. Failure to devise motivational schemes will lead the employees to complacency which will definitely affect the performance of the company.

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The change theory uses organizational development in order to achieve the desired results. Organizational development uses planned and well organized efforts that are meant to improve the viability and effectiveness of the health care organizations. Therefore organization development is meant to establish processes that are designed for the purposes of bringing specific results. In order to achieve such results, organization development can incorporate interventions by the use of compensation and employee benefits (Schoukens 2002. These interventions are expected to improve renewal processes and problem solving skills in an organization. This is achieved through a collaborative and an effective management organization. It is important for the management of the rural hospital to carry out an institutional assessment. This assessment is important in that it would assist in determining the kind of institutional change that is needed so as to improve the service delivery and reduce the chances of patients dying due to minor errors In addition, the business urgency department was not able to serve the three clients at one moment since there were some of the patients who required more attention, this can be improved by the addition of more banking services.

Historical View of the Organization

Bank of America is one of the largest banks in America. The bank deals in financial services and has a number of clients across the country. The bank was formed in 1904. It began as bank of Italy which was dedicated for the service of immigrants. This was due to the fact that the immigrants had been denied the services by other respective banks. The earthquake of San Francisco was a blessing in disguise for the entrepreneur. It was during this time that he began lending to those who wanted to reconstruct their businesses. As a result the banking services began at this point. However it took sometime before the loans were repaid back. As a result the initial plan was successful with the repayment of the loans (Kapoor, Hughes & Pride 2009). Bank of America and Italy was formed in 1922. The original vision of the entrepreneur was to start a national company. His aim was to come up with a holding company.

Compensation in the banking industry in the United States is used with the aim of ensuring competency and effectiveness in the provision of healthcare services. As a result compensation ensures quality financial services. This is done through the thorough scrutiny of various players before granting certification. Employee benefits also leads to fostering genuineness in the banking industry. This is done by the elimination of quarks in the process. Compensation also leads to the successful provision of banking services. Through the process clarity and transparency are fostered making the process of providing services successful and effective. Lot of obstacles in the effective provision of financial services are done away with in the process of compensation. This leads to quality services; this comes from the certification of qualified organizations only. Without compensation the quality of financial services will be low.

Current Challenge

Bank of America paid more than $30 million fine to the exchange commission. His was due to the fact that during the acquisition of Merrill the bonuses were not made known to the shareholders. It therefore became evident that the company had approved the payments but kept its customer’s inn the dark (Teleki et al 2006). Through investigations were therefore conducted and the truth came out. The handling of the merger was therefore a major challenge to the company bearing in mind that it involved the benefits to be paid. The issue had for reaching effects on the company. This was due to the fact that it coasted the company a lot of money which was paid in the form of fine. Non disclosure of such in formation is considered not only as an offence but also as an unethical act. The process of economic growth has a lot of relevance to the plight of unemployment. Under normal circumstances unemployment is an economic problem.

The forces that bring about unemployment are economic in nature. Economic growth for instance has a lot of significance to the whole situation of unemployment. The level of economic activity prevailing in at any given moment has a lot of significance on the state of unemployment at the time. During the process of economic growth there is a trend which follows; this normally involves the decrease of employment opportunities. This automatically leads to a rise in the levels of unemployment. Therefore economic growth has a negative effect on the rate of unemployment in the economy. Technology also leads to high levels of unemployment; this is primarily due to the replacement of human with machines. With the increase in innovation of technology more tasks are performed by machines making it unnecessary to employ people. This makes people to lose their jobs to machines since it becomes cheaper to use machines than employ people. Another factor in the same vein of technology is the use of capital intensive mechanism. As a result the jobs that can be performed by people are done by machines.

The role played by policies of microeconomic nature inn the creation of the unemployment in society cannot be underestimated (Brusentsev & Vroman 2005). These policies normally lead to a sudden change in the economic environment making certain adjustments that lead to unemployment. This happens when new policies are set out in place. During the initial times of implementation the economic environment responds with fear and panic thus causing a sudden disappearance of opportunities for career. Constraints I economic growth lead to uncertainty among the various economic players making the chances of unemployment to reduce. There is usually rampant unemployment during times of economic uncertainty. Two reasons, first most companies won’t employ any one during the times of economic constraints. Secondly many companies lay off their staff during tines of slackness and low economic activity.

Conclusion

Benefits and compensation have a lot of implications to the operations of modern business organizations. As a result most companies pay keen attention to the aspect. For the sake of attracting, retaining and motivating the work force, organization must ensure that they have a good benefits and compensation schemes. Benefits involve those payment schemes in which the employees are entitled to as they work for the organization. They include insurance. Compensation on the other hand involves those payments that are given to the employees so as to motivate them to work hard. This makes the performance of the organization to rise. Compensation schemes include bonuses. Bank of America is one of the largest banks in America. The bank has a long history of operation and has been in existence for a long time. The company has hade several employee benefit schemes in the past which have been focused on employees. However the company suffered a major challenge with regard to employee benefits and compensation during the acquisition of Merrill. This involved unethical practices where the company failed to disclose to the shareholders the intention to awards bonuses. The decision was reached at before the acquisition of the company. However the shareholders were kept in the dark over the matter. The issue became hot and ended up involving several litigation processes. The paper as focused on the issues of employee benefits and compensation. Special reference has been given to the bank of America.

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References

Ball, C. (2008). California workers’ complains: how to take charge when you’re injured on the job. Chicago: Nolo.

Brusentsev, V. & Vroman, W. (2005). Unemployment compensation throughout the world: a comparative analysis. California: W. E Upjohn Institute.

Gifford, G. (1990). Medical costs in workers’ compensation: interstate comparisons, Minnesota, and other selected states. London: DIANE Publishing.

Kapoor, J. & Hughes, R. & Pride, W. (2009). Business. New York: Cengage.

Schoukens, P. (2002).The social security systems for self-employed people in the applicant EU countries of Central and Eastern Europe: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Repubic, Slovenia. Washington: Intersentia.

Schuler, R. & Briscoe, D. (2004). International human resource management: policy and practice for the global enterprise. New York: Routledge.

Teleki et al (2006). Research colloquium on workers’ compensation medical benefit delivery and return to work. Washington: Rand Corporation.

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Tropman, J. (2001). The compensation solution: how to develop an employee-driven rewards system. Washington: John Wiley & Sons.

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