Write a 3-5 page compensation and benefits package for a new expatriate position working for either Java Corp or an organization with which you are familiar.
Java Corp is a domestic cold coffee and tea company. The company is opening up a new office in London, England. Java Corp is planning on filling one executive level position with a U.S. citizen. The term of this initial assignment is two years. With being the new HR manager, it’s my job to design a compensation package for this open position.
Key Factors and Decisions to make Regarding Base Pay
A few key factors and decisions to take into consideration when regarding base pay is the “person’s experience, qualifications, geographic location, and performance” (Compensation Equity Public Policy Issue Statement, 2018). Java Corp will use variety of strategies when figuring out the base pay to make it a competitive workforce. Some of those strategies are “market competition, employer size, whether the employer is public or private, level of product demand, and industry” (Compensation Equity Public Policy Issue Statement, 2018). When living in London, England all of these strategies are good to take into consideration when figuring out the pay because it’s an expensive area to live. “There’s no getting away from the fact that London is an expensive city to live and work” (Moving to London, 2019). Living in London, England can be a wonderful and stressful experience. “The average salary in London is £34,991 per annum, which is the highest of all big cities in England” (Average Salary London |Onaverage.co.uk, 2021). This would be $39,196.92 in US dollars. “The average London house price in May 2018 was £478,853 (or $629,788)” (HM Land Registry, 2018). The prices start to change and get a little lower once you’re away from the center of London. The price for a one bedroom apartment in 2017 was around £1,250 (or $1,644) per month. All of these expenses are taken into consideration when developing a compensation package for this open position within Java Corp.
“Compensation may refer to the direct and indirect benefits that a worker receives from an employer” (Compensation Equity Public Policy Issue Statement, 2018). Compensation may include salary or hourly pay, benefits, bonuses, incentives, short term disability, and 401k contribution. Most of these components are listed in a compensation package. The compensation package can have many components within it. “Compensation is payment to an employee in return for their contribution to the organization, that is, for doing their job” (McNamara, n.d.).
The most common ways that compensation is given is by wages, salaries and tips. The pay scale is always different per person because it all depends on the persons experience, skills, and job position. The pay scale may be different at the executive level because the salary and other benefits are negotiated into the employee’s contract within the company. An executive level employee’s contract could consist of compensation, benefits, supplement benefits, insurance coverage vacation, memberships, bonuses, agreements, perks and special terms of employment.
When completing an entire compensation package for employees it’s very important to take all of these things into consideration. Some questions to think about when completing a compensation plan are:
- What can Java Corp afford and what is the company willing to pay?
- What is the cost of living in London, England?
- What are Java Corp thoughts on compensation?
- What is the value of other executive level positions?
- What are Java Corp expectations on the executive position?
When all of these questions are answered then it’s a good start to a compensation package. These packages can fluctuate for each position and employee that is hired.
Analyze legally required benefits and standard benefit offerings for an employee
The benefits section of the compensation package should consist of a lot of things. Those things include a health plan which has dental, vision, life insurance, retirement programs- 401K, IRA, vacation, and employee stock plans. Healthcare in England is offered to everyone and it’s offered by the National Health Service. NHS is government funded and everyone can use it without being asked to pay the entire cost of the service. They get the money for this from taxes from everyone living in London, England. Private health insurance is only optional so when discussing the position to individual it Java Corp will have to negotiate it. Another thing that should be able to be adjusted within the compensation package is the annual cost of living and taxes. With adjusting these things it would attract great individuals which will then be easier to find the right individual for the position.
Analyze the appropriateness of offering additional benefit and resources for expatriate
The compensation package should also consist of incentives like a health savings plan and food allowance plan. The benefit package should also include holiday and vacation time that would be fit at the executive level. It also should contain holidays, vacations, sick days, bereavement days, family medical leave days, and compensation time. Java Corp needs to make sure that the employee at an executive level gets 10 holidays. They should also get the option of floating holidays which gives them the option to have off the day before/ after each holiday. The executive level position within Java Corp should come with four to six weeks of vacation. The short term and long term incentives should also be taken into consideration when completing the compensation plan. Employee performance determines if the pay increases or not. The bonuses and incentives at the executive level will be tied in with the company’s shares and improvements.
Short term incentives are a way to repay employees for achieving the company’s short term goals. Most of the company’s short term goals are based on the financial situation, growth, profits and products. If these goals do not get achieved then there will not be a payout. Long term incentives are deferred compensations which helps companies retain valuable employees by rewarding them for meeting specific goals. Most of the long term incentives have to deal with different options for stock. This program could help keep employees for a long period of time within the company. It keeps the employees engaged while they are at work because they have something to look forward to. All these compensation packages can be adjusted over time to fit the positions within Java Corp.
Another thing that should be in the compensation package is a relocation benefit. Java Corp will pay the entire cost to move the employee and family if needed. The package should cover the buying/seller of the employee’s old home and help finding a new home. It should also consist of transportations, temporary housing, moving –full pack/unpack, storage unit rental, lease break coverage. A time limit will consist of sixty days to get all of these expenses covered.
If it’s outside of the sixty day window then the cost will be on them. The final thing that should be in the package as well is a severance plan. Severance pay is an amount paid to an employee when being dismissed from work. This pay should consist of one or two months of salary for every year the person worked for the company.
In conclusion, by following this layout for this employee compensation plan it will turn out to be a very strong plan. A strong package needs to be made for Java Corp to find the right person to fill the executive level position. The compensation package plan will be very smooth to follow and be easy to make changes for each position within the company. The new employee will meet the company’s needs and will help Java Corp be successful.