Human Resources Professionals and Compensation

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Table of Contents

Introduction
Compensation package
Analysis
Differentiation and competitive advantage
Conclusion
Reference List

Introduction

Compensation packages are extremely important particularly in attracting resourceful employees. By definition, a compensation package is a combination of benefits given to employees by their employers with the inclusion of insurance, guaranteed raises, wages, as well as other perquisites. Compensation packages usually include unswerving wages.

Even though salary is crucial to employees, bonuses, whether monetary or otherwise, are also imperative for a motivated workforce. Contemporarily, people looking for jobs go for companies that offer competitive compensation packages especially companies that have incentives similar to what the job seeker wants.

Another popular benefit is time off whether paid or not, and thus human resource management comes in since it is the department in charge of ensuring that employees are fully satisfied so that they can be productive (Boxall & Purcell, 2003, p.84).

This paper will look into the Wal-Mart Company and analyse the company’s compensation package strategy, and find out its effectiveness in terms of motivating its employees.

Compensation package

Sam Walton started the Wal-Mart Company in the year 1962 at Rogers, Arkanas. Today, is has become one of the largest retail stores across the world and it employs over 2 million employees worldwide (Lichtenstein, 2010, p.68). The stores in the US make the biggest division of the company and this includes supercenters, discount stores, as well as Wal-Mart markets.

There is also the Wal-Mart express, which offers quite a wide variety of services including gas and grocery services. The company also operates internationally as it has more than 4000 stores and 660,000 employees in approximately 15 countries across the world.

Even to date, the company remains a family business and the Walton family controls it, as they own 48 per cent of the total shares. Wal-Mart emerges to be the third largest corporation in the world.

The fact that the company is extremely big means that it requires an organisational structure that will be efficient enough to make sure that all the retail openings run smoothly. The organisational structure for Wal-Mart includes a divisional structure.

The divisional structure usually covers three different classifications including geographic structure, product structure, and lastly market structure, which is where Wal-Mart lies (Frank, 2006, p.21). When dealing with the market structure, it means that the company operates according to the type of customers they have in order to meet the specific needs of the customers.

Wal-Mart’s organisational design helps it to achieve its goals as an organisation. The market structure comes in different forms, which include monopsony where only one buyer is available in the market. The other type is monopoly, which means that there is only one provider for a particular product, and lastly is oligopsony where few buyers are in the market, but there is a wide variety of sellers (Jensen & Zimmerman, 1985, p.6)

Wal-Mart is fully aware that giving its employees a competitive compensation package is significant when it comes to recruiting and retaining employees. In addition, it has to offer competitive compensation package so that it can continue being extremely competitive amongst other companies of its kind.

Its competitive package particularly in the United States is extremely competitive such that approximately 5 billion caters for remunerations. Additionally, it employ people according to the experience they have, their skills, accountability to the job, as well as the way they are can handle problems that arise in the workplace.

Some of the various benefits included in the Wal-Mart’s compensation package include health benefits, profit sharing plan, 401(k) plan, and stock purchase plan (Lichtenstein, 2010, p.77). The health benefit covers everyone in the company without minding whether one works part or full time coupled with the inclusion of their children.

The health benefits plan meets the employee’s needs in accordance to the kind of needs they have. The health coverage caters for everyone with the cost of between $5 and $9 every month. The profit sharing plan caters for employees that have been in the company for more than a year. The employees have two percent contributions taken to a profit sharing account.

In addition, other health benefits that Wal-Mart offers include accidental death, company paid life insurance, dental insurance, and business travel accident insurance. For employees who fall sick, there is sick off where they are given time to recuperate at home. There is also a package for the disabled employees, as there is the short and long-term disability insurance.

Analysis

In my opinion, the elements in the compensation package that have the greatest impact on the employee’s performance as well as commitment to the organisation is that of health benefits. Having health benefits enables employees to be physically fit and thus it reduces the chances of being absent from work (Morgan, 2013). Employees are in a position to stay active at their place of work.

Healthy employees are productive, which contributes to the success of Wal-Mart. The health benefits that Wal-Mart offers increases the chances of employees being fully satisfied at work. This assertion hinges on the fact that employees enjoying such benefits will not be worried about covering the health benefits by themselves and it shows that their employer is concerned about their welfare.

Every employee would love to work in an environment where s/he feels appreciated by the employer. It makes one want to work even more as s/he is happy and contented. Wal-Mart also keeps its best employees. In many cases, the employees regarded as the best at work can negotiate the terms they want and this aspect includes conferring the benefits and bonuses that they want (Morgan, 2013).

Therefore, employees will most likely stay where they get health benefits as opposed to any other rewards in another company. Lastly, Wal-Mart is in a position to attract potential employees by offering health benefits and through such a move, it may get some of the best and most resourceful employees in the market (Adams, 2011, p.123).

The health benefits element is one of the main reasons why employees continue to perform well, which also underscores Wal-Mart’s success as aforementioned. From a personal point of view, this would also motivate me greatly, as a worker, to work even harder for the company.

Differentiation and competitive advantage

According to the Herzbergs two-factor theory, employers cannot be in a position to motivate their employees on their own and so the former have to create an environment that the employees will be in a position to derive self-motivation (Baker & Anderson, 2010, p.159). The place of work should be effervescent enough for employees to feel rejuvenated to work productively (Mejia et al., 20120, p.165).

The Herzbergs two-factor theory focuses on motivators as well as hygiene factors. Wal-Mart’s health benefits lie under hygiene factors, which if not available would make employee unproductive. Hygiene factors are significant for they make sure that the employees feel contented with their work.

Employees might be in a position to work without health benefits; however, without the benefits, they would feel something is amiss and thus arouse the dissatisfaction feelings, which derail any efforts towards effectively productivity (Schuttinga et al., 1985, p. 136).

This aspect underscores why Wal-Mart’s health benefits offer a competitive advantage to the company in comparison to other companies offering different compensation packages. Some companies offer compensation packages such as company cars, home equipments, pay for their employee’s education, employee discounts, and many others.

However, the Wal-Mart health benefit is extremely competitive for a majority of employees would rather go for the health benefit as opposed to the other benefits. This assertion holds because one can be in a position to live without a company car and/or home equipments, but health benefits are extremely essential.

In the recent past, health costs have been skyrocketing and since one cannot predict when he or she will fall sick, it can be quite challenging to be without healthcare insurance.

The salary may be high, but if one falls sick and the medical expenses are too high to meet, the salary will not be enough to cater for the hospital costs (Schuttinga et al., 2985, p.123). This element explains why Wal-Mart’s health benefit adds competitive advantage to the company.

Conclusion

One of the aspects that make the health insurance benefit unique is that, due to the increased inflation, decent healthcare services coupled with hospitalisation have equally gone up (Pauly, 1999, p.56). Huge medical expenses usually forces one to spend his or her savings or salary, and in most cases, the available resources are hardly enough.

Consequently, in most cases, people end up with huge debts that they have to settle even after one has recovered. Therefore, health benefits catered for by the Wal-Mart’s package ensure employees get quality medical services at reduced amounts.

Usually, a standard medical cover caters for hospitalisation costs including ambulance costs, medical tests, room charges, doctor fees, doctors follow up visits, and many others. Therefore, Wal-Mart is ahead and boasts a competitive advantage in comparison to other companies that do not offer health benefits as compensation packages.

Reference List

Adams, T. (2011). Walmart and the Making of ‘Postindustrial Society’. Labour, 8(1), 117- 125.

Baker, K., & Anderson, R. (2010). Corporate governance: A synthesis of theory, research and Practice. New York, NY: John Wiley & Sons.

Boxall, P., & Purcell, J. (2003). Strategy and human resource management. Industrial & Labour Relations Review, 57(1), 84-87.

Frank, A. (2006). A brief history of Wal-Mart. Washington Monthly, p.21.

Jensen, M., & Zimmerman, J. (1985). Management compensation and the managerial labour market. Journal of Accounting and Economics, 7(1), 3-9.

Lichtenstein, N. (2010). The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York, NY: Henry Holt and Company.

Mejia, L., Pascual, B., & Santos, M. (2010). Compensation and organisational performance: theory, research, and practice. New York, NY: M.E. Sharpe publishers.

Morgan, L. (2013). Why is health insurance important. Web.

Pauly, M. (1999). Health benefits at work: An economic and political analysis of employment- based health insurance. Michigan, MI: University of Michigan Press.

Schuttinga, J., Falik, M., & Steinwald, B. (1985). Health plan selection in the federal employees health benefits program. Journal of health politics, policy and law, 10(1),119-139.

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