Companies like Google and Costco are famous for their excellent work conditions and high salaries. But how do these companies decide on their employees’ compensation? Naturally, they use effective compensation strategies! It includes not only payments but also various benefits.
Keep reading to learn more!
🔝 Top 5 Compensation Strategy Examples
- Bella Amore's Human Resource Management
- McDonald’s Company Performance Measurement
- Compensations Role in Human Resources Management
- Compensation for Employees
- Emirati Companies' International HRM Strategies
💸 What Is a Compensation Strategy?
A compensation strategy, by definition, is an approach to compensating a company’s employees for their work. It includes base salary, additional pay, non-pay benefits, and rewards. The right compensation strategy in HRM can ensure retaining talent and getting the right workers for specific organizations.
How Do You Use a Compensation Strategy?
A company must first define its guiding principles to use a compensation strategy properly. What are the factors that it wants to take into account when making a competitive salary package? How does it acquire talent, given the prevailing market rates? These are essential principles necessary to build a reliable compensation strategy for a business.
What Are the Three Basic Compensation Strategies?
Three basic compensation strategies are leading, lagging, or meeting the market.
- When a business uses a leading compensation strategy, its employer’s attitude is aggressive. Their goal is to become the employer of choice.
- Lagging is when a business is below the market rate.
- Meeting the market implies matching the prevailing market rates.
🤑 Types of Compensation Strategy
A compensation strategy can have three different forms, depending on the kind of business and employees.
|Straight salary compensation strategy||This type is used for employees who expect a specific salary in a given year. It is perfect for office jobs where the annual sum is more than an employee would typically make in a year if they were compensated hourly.|
|Salary plus commission compensation||This variant is perfect for an employee in a leadership position or in a position where there is a chance to make commissions. Individuals in leadership positions and sales typically go after this kind of compensation package.|
|Straight hourly compensation||Straight hourly compensation allows individuals to rely on their time and flexibility to earn more.|
✨ Compensation Strategy Examples: Top 5 Companies
Check out the following examples of excellent compensation strategies:
Facebook Compensation Strategy
Facebook, also known as Meta, has a fantastic leading compensation strategy. They provide many benefits such as free meals, snacks, regular team happy hours, and onsite healthcare that includes chiropractics and even acupuncture!
Google Compensation Strategy
Google boasts of being a company where an employee wouldn’t ever want to leave the office. It’s not hard to see why: the perks include massages, free food, and a flexible work schedule.
Costco Compensation Strategy
Costco employees pride themselves on having the best pay and competitive salaries based on productivity. Workers receive bonuses twice a year and have paid holidays and paid sick time. They have great insurance packages as well.
Adobe Compensation Strategy
Adobe may seem like a simple collection of apps on your laptop, but they’re in fact are a competitive company with excellent work conditions. Their employees get 28 days of vacation and receive a sabbatical every five years.
Chevron Compensation Strategy
For those who want to study subjects related to their job, Chevron offers to pay 75% off any training or courses. The corporation is also famous for its friendly company culture.
Other examples of companies with great compensation strategies include:
Check out the essay samples below to get more ideas.
📝 Compensation Strategy Research Paper Examples
- IBM Company Strategic Human Resources ManagementBusiness essay sample: IBM is one of the publicly quoted firms in the technology industry. The firm deals in computer hardware and software as well as integrated technological applications and devices.
- Al Hilal Bank Human Resource ManagementBusiness essay sample: The paper explores how the Al Hilal bank applies its HRM and human capital to increase its performance, and discusses its human resource planning process.
- Compensation System Design and Job AnalysisBusiness essay sample: Compensation programs are based on a combination of evaluations of the internal relationship of jobs at the workplace.
- FedEx Company's Human Motivation StrategiesBusiness essay sample: FedEx Human Resources develop policies, programs, and procedures that not only create a center of attention but also retain the most competent, talented, and diverse employees.
- Managers' Responsibility for Organizational PerformanceBusiness essay sample: It is expected that in the future, to enhance the performance of a company, the role of the manager will involve personnel management and managers' competencies.
- Event Human Resource Management AnalysisBusiness essay sample: This report presents the various policies that will be used by Sydney world Masters Games in managing volunteer human resources.
- IBM: The Compensation and Benefits PlanBusiness essay sample: The compensation strategy of IBM is based on two principles: to remunerate workers for their efforts and to distinguish those employees that contribute to success of the company.
- Crompton and Smythe Ltd.'s International Human Resource ManagementBusiness essay sample: The case of Crompton and Smythe Ltd. Shows that an essential part of the IHRM process is that proper attention is given to the personnel function.
- Marketing Career Development Plan for Company XBusiness essay sample: This career development plan for Company X is developed in the backdrop of the restructuring in the sales department to take on new roles in marketing and customer relations.
- HRM Practices: Difference in Practices in US and JapanBusiness essay sample: The paper provides a comprehensive review of the differences in the HR policies of GM and that of Toyota. It also shows that the differences are common in all US and Japanese companies.
- Analysis of Human Resource Strategies, Policies and PracticesBusiness essay sample: Human resource department makes sure that it is in conversant with the most current methods of employee recruitment to ensure that it has introduced competent staffs.
- Gas Station Insurance: Covering the BasicsBusiness essay sample: Proper risk management in gas station operations is vital to the needs of the business, and structuring a proper insurance coverage package is a necessary step in the process.
- The Concept of Recruitment and Selection on JobBusiness essay sample: Job description entails a description of the purpose of the post, the job title, where the job will be based, the type of person that is required which is the selection criteria.
- Kudler Fine Foods: Career Development PlanBusiness essay sample: The management of Kudler Fine Foods has presently decided to restructure the team which runs the secular stores. The stores are an integral part of the company.
- Influence of Reward Practices on Employees’ PerformanceBusiness essay sample: On a global scale, the effectiveness of corporations can be critically determined by the kind of human resources development systems that they put in place.
- Performance and Rewards Impact on Employees’ LoyaltyBusiness essay sample: Assessment of the performance of companies in Saudi Arabia has been largely neglected, which has led to low achievement of these organizations.
- "Managing Human Resources" Book by Jackson et al.Business essay sample: Most organizations work towards ensuring that they have workers with a strong wish of work and capable of dealing with crucial aggressive demanding or stimulating situations.
- Cooper Cameron and Cytec Industries: Reward and Recognition PortfolioBusiness essay sample: Rewards were found to motivate employees to develop their professional skills and stimulate innovation congruent with the objectives of the organization.
- Waterway HR Issues: Employee Retention StrategiesBusiness essay sample: This paper seeks to determine a human resource management in Waterway Industries that is a canoe manufacturing company, headquartered at Gosford, NSW.
- Bank of America Compensation and Benefits PaperBusiness essay sample: 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 bank of America.
💡 Essay Ideas on Compensation Strategy
- Workers’ Compensation: Statutory Compensation LawBusiness essay sample: Workers’ compensation can be defined as a term of insurance cover that covers for medical care as well as monetary benefits for employees.
- Case Analysis of Nucor CorporationBusiness essay sample: This case analysis has considered all the facets of Nucor Company’s operating results and financial position.
- Human Resources Management SubtletiesBusiness essay sample: Human resources management is identified as a strategic activity that is engaged in business processes. It is for working with people, finding new employees and training them.
- Human Resource Management: Differences in MultinationalBusiness essay sample: In multicultural multinationals, international human resource management (HRM) is one key area that is highly affected by intercultural differences.
- Current Issues in Human Resource ManagementBusiness essay sample: Human resource faces the challenge of quickly applying technology to the task of improving its own operations and to always be ahead of others in the technological innovations.
- Compensation Management in Enron CorpBusiness essay sample: Enron was a good example of a company that failed to employ correct management skills to earn profits, the management was over-ambitious about the growth of the company.
- Human Resources Management in Global EnvironmentBusiness essay sample: During hiring, employers look for the best the market can offer them so as to maintain a degree of quality in their operations
- Compensation Decision-Making in the CompanyBusiness essay sample: Compensation must take into consideration the contributions of each individual with respect to the position they hold and the service they provide to the organization.
- HRM Practices in the BusinessBusiness essay sample: To achieve organizational objectives and increase creative and productive capacity, businesses often refer to external human capital markets.
- Billy Beane: Changing the GameBusiness essay sample: The Oakland A’s was one team that had the highest payrolls between the late 1980s and the beginning of the 1990s. In 1997, Billy Beane was made the general manager of the team.
- The Key Elements of Job AnalysisBusiness essay sample: This paper describes the key elements of job analysis to explore the underlying factors and conditions of responsibilities.
- Strategic Compensation: Case Study of Plastec CompanyBusiness essay sample: Compensation strategy forms a critical component of the contract that exists between employers and employees, for it defines wages and benefits.
- All Colors of the Rainbow: HR PlanBusiness essay sample: During the first step, the HR manager will develop specific job requirements for the position of a tutor, for example, at All Colors of the Rainbow.
- Analysis of the Commonly Used Expatriate Compensation StrategiesBusiness essay sample: This essay seeks to analyze the various payment options available to multinational companies, particularly for the employees who fall in the category of expatriates.
- Harford and Li: The Case StudyBusiness essay sample: The case analyzed by Harford and Li aims to explore the problem of decoupling CEO wealth and firm performance.
- Midwest Education: Case StudyBusiness essay sample: Midwest education is a manufacturing company in the US that offers transportation services. This study analyzes the human resource managers’ role within the organization.
- Show Me the Money: Compensation at Cisca Engineering Limited (CEL)Business essay sample: Jeff Arvidson (the president and CEO of CEL) faces a selection dilemma of employee compensation triggered by the urgent need for a pipe stress analyst.
- Gillera: Compensation StrategyBusiness essay sample: Power is an element of the strategy that allows new knowledge workers to immediately create cash flows for Gillera.
- New Car Dealership: Developing a Business PlanBusiness essay sample: The business plan is focused on a new car dealership with a service department. The industry is highly lucrative and can become more profitable due to the expected economic growth.
- Analysis of Compensation StrategiesBusiness essay sample: Strategic personnel management requires adequate changes as a management subsystem of an organization in the management paradigm.
- Webster’s Case: Dealership Needs HelpBusiness essay sample: Managing a company is a complex process, requiring balancing the needs of the business with the expectations of employees, consumers, and regulators.