Introduction
Wise employers understand that attracting and retaining outstanding workers requires a reasonable salary and benefits package. Wages, salaries, bonuses, and commission plans fall under the compensation category. Managers should pay attention to the benefits component of worker compensation and perks because these add a lot to employment contracts by addressing the needs of the majority of employees. This paper, broken into two sections to examine employee remuneration in the firm, focuses on the Maersk Group case study. The first part of the paper discusses Maersk’s compensation strategy and how the market affects it. The value of salary surveys to a company is assessed in the second section, along with the benefits of discretionary perks for Maersk.
Compensation
Compensation Philosophy of Maersk
Maersk is a multinational logistics firm with operations in several nations. The compensation philosophy formally states the company’s attitude toward workforce compensation (Snell & Morris, 2018). It establishes a foundation for stability and clarifies the reason surrounding workers’ wages. The objectives, competitive attitude, strategic plan, remuneration and comprehensive reward approaches of a company are supported by a thoughtfully crafted compensation philosophy (Grensing-Pophal, 2020). Depending on elements such as the industry, the corporation’s economic history, the culture, and other considerations, various companies adopt different strategies for compensation philosophy. Maersk bases its compensation philosophy on achievement, which might change annually depending on performance and profit margins (Groysberg & Abbott, 2013). This straightforward but efficient compensation system has made Maersk active and thriving in the industry.
When it comes to designing remuneration, the corporation uses the industrial approach. Various jobs are divided into groups according to experience, expertise, and workstation requirements. The multiple employees are organized into several job groups, and each is paid following the needs of their respective groupings (Payne, 2020). Additionally, Maersk used the pay-for-performance concept, which allowed employees who outperformed expectations to receive incentives. At Maersk, senior leaders received bonuses, with the amount of the bonus they could receive each year capped by their People Strategy Sessions (PSS) rating (Groysberg & Abbott, 2013). Poor performers may leave more frequently under this compensation concept, but over time turnover falls drastically due to improved compensation and employee satisfaction.
The Market’s Influence on Maersk’s Compensation Philosophy
The market factors of supply and demand for human resources are taken into consideration when determining compensation. Personnel with unique skill sets and knowledge acquired through experience are paid more at Maersk than those with common skills in high demand in the labor market (Groysberg & Abbott, 2013). However, because of the government’s mandated minimum salary rates and employee unions’ bargaining power, the more extensive availability of human resources for some positions may not result in wage reductions beyond a floor level. The overwhelming majority of the existing workers are not employable because of inadequate talent and poor skill; hence this component alone does not lead to reduced remuneration (“Compensating employees,” n.d.). Therefore, it is evident that Maersk’s compensation philosophy only partially conforms to the principle of demand and supply.
Salary Surveys
Value of Salary Surveys to an Organization
The salary survey is the technique for gathering data on worker compensation, including pay and benefits. Salary surveys can help recruit fresh talent and keep staff when they are correctly created and implemented (Coplan et al., 2018). Additionally, this survey might offer comparison points for wages and benefits. The salary survey makes sure the business abides by the law and avoids the risk of setting pricing. Managers’ alternatives are restricted to network gossip, Internet searches, and contacting competitors to determine what they are paying if reliable market information is not examined (Miller, 2021). Additionally, these surveys provide tactical direction to the Human Resources departments regarding a company’s overall compensation (Coplan et al., 2018). Salary surveys should be conducted regularly because the form of data is delicate and soon becomes out of date.
Advantages of Discretionary Benefits to Maersk
Employee privileges, known as discretionary benefits, like health and life insurance, retirement programs, sick and maternity leave, and prescription medication insurance, are not required by law. The organization gains from worker empowerment by establishing a discretionary benefit system (Mayer, 2020). Since Maersk is offering health incentives to their staff, the workforce will always be at their most productive since they would be at their fittest (Groysberg & Abbott, 2013). Furthermore, incidents of employees using paid sick days will no longer be an issue. Additionally, offering training reimbursements enables the business to raise the workers’ skill levels. Maersk will eventually have a crew that is knowledgeable and skilled, one that has expertise. Giving the employees access to these additional privileges helps them feel included in the Maersk community.
Conclusion
Employers express gratitude for the effort by putting acknowledgment initiatives in place, which greatly enhance employee happiness. For their self-esteem and a pragmatic way to support themselves, workers desire to be paid adequately for their work. Fair compensation and a decent benefits package go a lot further than forcing workers to remain by offering salaries that are higher than the going rate for the sector and the job market. Salary surveys can serve as standards against which wages and bonuses can be evaluated and aid in retaining existing employees and attracting new talent. Discretionary benefits help Maersk keep employees by fostering a strong working relationship.
References
Compensating employees. (n.d.).
Coplan, B., McCall, T. C., Smith, N., Gellert, V., & Essary, A. (2018). Burnout, job satisfaction, and stress levels of Pas. JAAPA, 31(9), 42-46.
Grensing-Pophal, L. (2020). Smaller employers add a personal touch to well-being benefits. SHRM. Web.
Groysberg, B., & Abbott, S. L. (2013). A.P Moller-Maersk group: Evaluating strategic talent management initiatives. Harvard Business School.
Mayer, K. (2020). COVID may force employers to adjust 2021 benefit offerings. Human Resource Executive. Web.
Miller, S. (2021). Upheavals alter the 2021 benefits landscape. SHRM. Web.
Payne, E. (2020). Employee benefit trends in 2021: Flexible benefits for a flexible workforce. Benefits Pro. Web.
Snell, S. A., & Morris, S. S. (2018). Managing Human Resources (18th ed.). Cengage.