Pay Structures, Benefits, and Recognition

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Employees are essential production resources that determine the level of production and organizational competitiveness in the market. They need to be motivated, become engaged with their jobs and help companies accomplish their goals and objectives. The Human Resources (HR) determines the appropriate compensation package, including salaries and benefits, that can help attract and retain the right skills. HR considers different factors, such as the size of their firms or production level, to decide how much to pay the workers. This paper provides recommendations for pay structure, benefits, forms of recognition, and other considerations to the leadership of an organization and established and new start-up manufacturing units that use different production approaches.

Pay Structures

Organizations use different types of pay structures that depend on such factors as the composition of workers and the nature and size of a business. According to Noe et al. (2022), pay structure refers to the wage bands or grades related to jobs with particular levels of an organization. Pay structures help organizations show pay rates for various jobs and establish a clear process to pay management. The structures also allow firms to monitor and control expenses and create impartial opportunities for raising salaries. The pay structure that the organization in the case study can use for the established and the new manufacturing units is broadband and market-based, correspondingly.

The broadband pay structure uses job types instead of titles to divide workers. The established manufacturing unit of the organization uses the workforce more than technology in all operations. Therefore, jobs in the unit can be categorized into administrative, production, executive, and service work. The salaries paid to the workers may vary within and across job categories (Cotton, n.d.). For instance, the salary range for workers in the production department can range from $42,000-$78 00 per year with different pay grades. This structure will offer the unit a flexible opportunity for pay raises, motivating the employees to enhance their commitment and productivity.

Market-based pay structure involves analyzing current and comparable positions to determine salary ranges and pay grades. The new production unit expands the organization’s operations that use a different approach, the technology, to production. The organization needs to analyze data from other companies using similar means of production to know how much they will pay for the workers operating different parts of operating machines or other technological processes (Cotton, n.d.). The process used to decide on the two payment structures for the two units is the analysis of their natural size and nature of operations.

Employees’ benefits are part of the total compensation provided to the workers. Although the organization has two business units, it must offer similar benefits to the workers. The recommended benefit programs that the organization should adopt may include medical insurance, pay for time not worked, retirement benefits, and family-friendly policies to help attract and retain employees (Noe et al., 2022). Health is an essential factor that determines the overall well-being of individuals. Additionally, the cost of seeking quality health services exerts a considerable financial burden on the employees. Therefore, it is recommendable for the organization to provide a medical insurance program to all the employees to caution them about the high costs of medication if they become ill while working for the company.

Although an individual’s productive time significantly determines how much one earns by the end of the month or year, unavoidable circumstances such as sickness can prevent someone from working. The organization should pay workers for time not worked, including sick leave, holidays, and paid vacation (Noe et al., 2022). However, the organization needs to be careful when designing the sick leave policy for the workers to avoid absenteeism, negatively impacting productivity. The retirement benefits for the workers comprise the amount of money set aside to provide the individuals with income after they end their careers. A defined contribution retirement benefit plan is recommendable for the organization because it has minimal administrative challenges and shifts the investment risks to the employees. Family-friendly-friendly policies that the organization should consider are flexible work arrangements and child care. Undeniably, the company is likely to have many workers with small children. Thus, flexible work arrangements and childcare programs will facilitate family-work balance, enhancing employees’ job satisfaction.

It is also imperative for the organization to consider the demographic composition of the two manufacturing units and the employees’ preferences when designing and implementing benefits packages. Factors such as gender and age can influence the type of benefits workers would want. For example, a workforce comprising females of childbearing age may be concerned about family-friendly policies (Noe et al., 2022). The older workforce and young, unmarried workers would prefer pensions and higher wages, respectively. Therefore, it is recommendable for the organization to communicate with the employees and offer flexible benefits plans. The approach will allow the employer to give the employees compressive information about available benefits and permit them to choose the type and amount they want to guarantee optimal satisfaction.

Companies use recognition programs to appreciate employees for their contributions. Recognition in workplaces is vital since it helps retain talents, encourages enhanced performance, and increases employee engagement. Additionally, appreciation of workers leads to higher job satisfaction. Firms choose either a structured or unstructured form of recognition depending on their size and other internal factors (Nayak et al., 2020). The structured one is the recommended form of recognition for the established business for the organization in the case study. This is a deliberate approach that managers should use to recognize workers (Nayak et al., 2020). For instance, the management can think of awards like innovation awards and employee of the month or year. The established unit is labor-intensive, with few technologies involved in production. Thus, it must have many workers, which would make it challenging for the management to recognize to reach every employee and appreciate their efforts. Therefore, the organization needs to plan a ceremony to recognize and award workers. One important benefit of this form of recognition is that it has a lot of weight on those who become employees of the month of the year.

On the other hand, the unstructured form of recognition can be the most appropriate for the new business unit. An unstructured approach to recognizing employees eliminates the unnecessary limits of traditional appreciation of employees. Unlike structured recognition, this form uses fewer official types of top-down acknowledgment (Nayak et al., 2020). The new unit capitalizes on technology as means of production. Therefore, it has few workers whom the management can easily reach. A manager can use a written note or verbally congratulate a worker on meeting the quality and quantity of production or portraying desirable behaviors. Unstructured recognition can be instant and does not demand a huge budget to hold award ceremonies at the end of the year. Therefore, this form of recognition will ensure workers in the new unit feel appreciated throughout the year and save the company considerable costs.

Additional Considerations for the Business Units

Generational differences between workforces are another important factor that the organization’s leadership should consider when designing pay structure, benefits, and recognition programs for established units. The unit is likely to have employees from various generations, such as generation z, millennials, generation Xers, and baby boomers, whose preferences and interests in workplaces differ significantly. For instance, baby boomers would be more concerned about pension benefits than other generations. On the leadership, consider the approaches to recruit and retain the right talent for the new manufacturing unit. This unit uses a high level of technology and is highly regulated by the government. Therefore, the organization needs to consider offering a competitive compensation package to attract and retain a skilled workforce.

In conclusion, organizational leadership uses different pay structures, benefits, and forms of recognition to attract, retain, and motivate workers who facilitate the accomplishment of set goals and objectives. However, they have to consider various factors such as the size of the firm, production unit, and types of skills required. Broadband and market-based pay structures are recommendable for the organization’s mature and new start-up units presented in the case study. The benefits that the organization can apply in both units may include medical insurance, pay for time not worked, retirement benefits, and family-friendly policies. Generational differences between workforces and approaches to recruiting and retaining the right talents are other factors that the leadership should consider when designing the compensation package for the workers in both units.


Cotton, C. Pay Structures and Pay Progression | Factsheets | CIPD. CIPD. Web.

Nayak, B., Nayak, G., & Jena, D. (2020). Social recognition and employee engagement: The effect of social media in organizations. International Journal Of Engineering Business Management, 12, 1-12. Web.

Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2022). Human Resource Management Gaining a Competitive Advantage (12th ed.). McGraw-Hill.

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