Developing a Competitive Compensation, Benefits, and Incentive Program

 

Assessing Business Opportunities in New York City

Living in New York City is faced with mixed fortunes based on the limited opportunities and economy despite being the epitome of the American Revolution and having the more enduring industry. It is the host for the largest stock exchange globally that boosts of estimated more than $20 trillion market capitalization (US News, 2021). Therefore, running a large marketing firm in New York City can be a fascinating role based on the prevailing environment. A competitive compensation, benefits, and incentive program is the primary way for a company to ensure survival in the city.

An Incentive compensation program is vital for any organization seeking to promote efficiency and productivity among its employees. In this study, the marketing firm faces competition for the same employees, which can be challenging in creating a productive team. Therefore, the firms have to seek a way to maintain the efficiency of the current employees. In addition, such a move will be crucial in enhancing employee recruitment, engagement, and retention. High employee turnover is a menace in many forms (Lazear, 2018). It should be avoided by all means through well-formulated compensation programs to ensure the employees remain focused on the same employer. It will help the firm as a good employer brand that can attract employees from the competitors.

Developing a Competitive Compensation, Benefits, and Incentive Program

Firm X should focus on incentive compensation programs based on equity theory that advocates for keeping the firms' employees motivated. Therefore, the program is based on rewarding them for driving their behaviors towards being more loyal to the employer. The program will also ensure that the firm can attain the projected results in its marketing activities. As a result, the employees are rewarded for working hard to meet the targeted results. For example, the sales-based commissions are one of the programs that the firm can utilize because it fits most situations. However, some plans can reward the employees at the organizational level to motivate teamwork and grow together as an organization.

Therefore, a combination of sales-based commissions and organizational level is the preferred strategy for the marketing firm. This vital tool will help the firm improve its performance in the industry to enjoy a competitive advantage. It is unjustified to draw all the attention to the high performers only in the firm. In contrast, the lower performers are not appreciated for their efforts despite trying their level best (Bawa, 2017). Therefore, the firm should not focus on sales-based commissions alone if the goal is to have an excellent competitive advantage. Therefore, advanced research is critical to ensure there is a fair planning process. There will be tracking and evaluation of how the program is doing to determine if the incentive being offered is delivering the required results. An incentive compensation tends to be strong as a firm competes with other firms globally. As a result, if the program's performance is performing well, there is a tendency to attract employees both locally and internationally.

The Role of the Human Resource in a Competitive Program

HR plays a critical role in training, recruiting, and hiring new employees. Therefore, the success of the program will rely on the way the HR department treats the employees. A good relationship will bolster the better implementation of the program. The compensation program is a significant component of the HR function, which is also a part of their responsibility to ensure employees are taken care of in the remuneration and rewarding system. Therefore, HR should be involved, and they are liable to the management for the program's progress.

Therefore, the HR professionals will be mandated to oversee the program and communicate to the management at various phases on the progress, benefits, and hurdles being experienced. They will also have to give their expertise on the costs to be incurred by launching the program (Lazear, 2018). Advice on the possible program's improvements and assessing the worst-case scenario that can emanate from abandoning the incentive compensation program.

In addition, the program will have to be based on assessing the job levels or classes being offered by the marketing firm. Some of the job categories may require more attention in the formula employed in the incentive pay plan. The criteria for payouts will be considered among the HR. The eligibility rules to be used must be consistent with the laws, rights, and safety rules that impact them. The criteria will have to comply with employment laws and civil rights to avoid a backlash (Chams & García-Blandón, 2019). Therefore, effective communication must be effective on how the program can create trust among employees in line with the employer's goal. The program should be realistic towards having a positive impact on the financial success of the firm. Therefore, the designing and implementation team for this incentive pay plan will consider various fundamental factors for the plan to deliver the required results.

The development of the incentive pay plan will have to ensure a survey is conducted among the employees to get their preferred incentives to add value to them. In this case, they will be given a chance to choose from a lengthy list of short or long-term plans, such as annual incentives, gain-sharing, retention bonuses, profit-sharing, and sales-based commissions, among others (Chams & García-Blandón, 2019). Nevertheless, the short-term incentive plans are most common in most firms hence the marketing firm can seek opinions from the employees on which one to employ.

During the choosing process, employees will have a chance to be informed how each of these incentives work and the required performance level to qualify as a beneficiary. It should be a process such that even after establishing the incentive plan, the firm will be making a follow-up among the employees to determine if they are satisfied with the current plan (Bawa, 2017). Sometimes the employees may no longer be willing to work for the firm. If they opt to leave voluntarily, it is an excellent opportunity to ask them if the incentive pay program played a role in their decision to leave. Further, the upper-level management will have to be briefed regularly on how the plan is performing. Therefore, the incentive program's execution is all-inclusive and should be assessed periodically to determine if it is working accordingly.

Eligibility to the Incentive Compensation Program

The design and development of an incentive compensation program plan will have to be compliant with some criteria. The employees have a role in deciding on the best plan, but the implementation and level of benefits will not be the same among all the employees. Therefore, the benefits and the plan will have to consider factors, such as job category, classification, and payout (Kang & Lee, 2021). It all starts with the Job categories held by different employees in the firm. Some of the employees will be in sectors such as Information technology, production, sales, and social media management. It is expected that some will be required to play a larger role for the firm.

Given the average age of 35 years of most employees, the length of service will be another criterion. The level of experience among the employees will be crucial in delivering the services to the firm. In addition, the job classification in the various hierarchy that includes executive and administrative will determine the benefits. On the other hand, the payout's context in terms of bonuses, stock, or cash is a crucial eligibility aspect. Some employees may feel better being given money or bonuses, whereas others will embrace stock or any other form of incentive. Therefore, it is upon the firm to decide on who qualifies for each payout.

Managing the Program

Once the plan is chosen and running, various factors play a paramount role, and they should be considered. The firm will have to select the appropriate technology to run the program. The metrics technology is the focus, which will be used continuously based on the firm's employees' performance. However, there should be caution in running the program; hence, uncertainties should be managed and adapt to the circumstances that arise during the program. Further, communication between the firm and its employees and management about the program is required (Lazear, 2018). Lastly, evaluation of the program using the available data will be a major talking point when deciding on whether to change the incentive compensation program or not. The changes can be from midstream to endpoint or vice versa, depending on the data's performance.

Equity Theory and the Factors Incorporated Into The Plan

The equity theory, also known as Adam's equity theory, advocates for an equilibrium between the employees' efforts and output when working for a firm. The efforts by the employees determine the productivity in the way they relate with the management. Therefore, this theory will have an impact on the plan. The employees' input is determined by factors, such as hard work, motivation, and technical expertise. On the other hand, the compensation will be through the salary, bonuses, and awards.

Therefore, the equity theory will have a driving force in the incentive plan, especially in defining the input to the output ratio. This is a crucial factor to determine the eligibility of the employees to the incentives. However, if the employees have the same ratio, the firm can use the awarding system from a competing firm to determine the firm's best level (Bawa, 2017). The overall goal is to ensure a balance in the awarding system without favoring anyone in the firm. All the employees should be considered.

Conclusion

Motivating employees is a critical aspect in ensuring that a firm remains competitive in the industry. A competitive compensation, benefits, and incentive program is a tool that would ensure employees remain loyal to the firm and attract professionals from rival companies. The HR professionals should guide the management in consultation with the employees on the most preferred plan. A follow up is necessary to determine if the plan is working. If a plan is working, it can be adopted as the long-term plan for the firm. The eligibility and the plan's criteria should be followed to avoid discrimination when giving incentives to the employees. A balance should be present between the employees' input and outputs as defined in Adam's equity theory.

 

 

 

 

References

Bawa, M. A. (2017). Employee motivation and productivity: a review of literature and     implications for management practice. International Journal of Economics, Commerce       and Management, 12, 662-673.

Chams, N., & García-Blandón, J. (2019). On the importance of sustainable human resource          management for the adoption of sustainable development goals. Resources, Conservation          and Recycling, 141, 109-122.

Kang, E., & Lee, H. (2021). Employee Compensation Strategy as Sustainable Competitive           Advantage for HR Education Practitioners. Sustainability, 13(3), 1049.

Lazear, E. P. (2018). Compensation and Incentives in the Workplace. Journal of Economic             Perspectives, 32(3), 195-214.

US News, (2021). Overview of New York. Available from: https://www.usnews.com/news/best- states/new-york