Compensation_Package

As we all know a compensation package is a pivotal and incentive mechanism that can be used to the advantage of InterClean, by creating a complete and effective package our employees will work at optimal performance , the overall process is to retain and motivate our employees. In order for InterClean to have a strategic competitive advantage it is important to have and effective compensation package . The compensation package proposed to the Human Resource Department will include two vital aspects; these are direct/indirect financial and direct/indirect nonfinancial rewards. Included on the proposal is an explanation of why this package will work, it will include the benefits towards the employee and towards the company. The last two areas that will be explained are how the package will reach performance of each employee and how this package differs from that of the parent compensation plan and why it has it differences. The first aspect of the compensation plan is the direct financial part; this can be divided into three categories. The first category of direct financial compensation is the salary, all sales employees will have a same base salary of nine dollars per hour, the second category is commissions, commissions is to be made by taking the sum of individual sales and dividing it by and established percentage (Table 1). The last category is the bonus, it is to be given out at the end of the year after the yearly total sales are added and if they surpass $500,000 employees are given a bonus in equality, and the amount of the bonus is determined by the sales manager. Table 1 Total Sales (individual) Percentage of Commission Amount $20,000-$35,000 3.5% Ranging from $700.00 to $1225.00. $35,001-$49,999 7% Ranging from $2,450 to $3,500. $50,000+ 10% $5,000.00 The second aspect of the compensation plan is the indirect financial compensation, this category has four components. The first component is the legal benefits that the employees some of these benefits are Social Security, workers compensation, paid vacations and family and medical leave, all of these were made legal by laws. The second, third, and fourth components are discretionary benefits that InterClean will provide its employees. The second component of the indirect financial compensation that InterClean is to provide its employees is a full medical plan which can either be individual or a family plan. The medical plan will also include dental and vision plans. The third component of the indirect financial part is the retirement plan and 401k plan; these plans are defined contribution plans meaning that the employer will contribute with 35 cents for each dollar deferred to the plan by the employee. The last component of the indirect financial part is the skills and development, InterClean is committed to the intellectual growth of its employees that is why skills development is part of the plan. InterClean will pay half of the tuition cost whenever the skills and learning goals are aligned with the organizational needs . Other discretionary benefits that InterClean will provide to its employees are paid birthday and paid working vacations, paid birthday refers that the employee is given a day off because it’s his or her birthday and the company will pay the day as if the employee was working, paid working vacations refers that if by employee chooses to use his vacation hours but chooses to work he/ she will be allowed to this will be allowed every other year. Under the U.S. Chamber of Commerce there are three categories that benefits fall and these are security and health, payments for time not worked, and employee services. Examples of security and health benefits are life insurance, disability insurance, sick leave, pension plans, sick leave, social security plans, workers’ compensation, and severance pay just to name a few. The plan composed at InterClean is to be contributory in which the employee will share part of the cost of the premiums . Under the category of payments for time not worked the benefits that fall under it are vacation, holidays, reporting time, and personal excused absences. The last category consists of the employee services these are tuition aid, auto insurance, food services, a company car (for the sales manager), parking for its employees, child care, and flexible work arrangements. Those components mentions above are to be used by InterClean to reach peak performance in each employee, we believe that these are the most essential and those that will motivate the employee to its fullest. The compensation package provided below will provide to be very useful it will help achieve peak performance from every employee because this compensation package is fair in all three aspects (internal, external and individual equity). The compensation package is stressed mostly on individual equity because all of the benefits that the employee can relate to, if he/she performs to the fullest they will be reward for their actions. By implementing this compensation package the benefits towards the company are that there will be low absenteeism that is because work environment if harmonious, low turnover simply because no one offers same benefits as InterClean, and employees will be highly motivated because the company reaches to the different needs an employee may have it may be higher pay or a higher chance of learning and development, and job satisfaction will be high because of the fair rewards that have been set up. The advantages pf the plan to our employees is that first they will have a peace of mind because they are sure that the company is taking care of them so they won’t have to worry about anything just about work, and by providing individual equity the employee knows that he is being acknowledged for all that he accomplishes for the company and his self-confidence increases . Differences of compensation plan exist between Puerto Rican compensation and that of U.S. compensation the reason for this is the culture. Puerto Rican cultures is one that wants to be acknowledge for what they have done people like the recognition this helps their esteem and confidence to do the work effectively. A very simple difference between compensations is the Christmas bonus in Puerto Rico that is required by law meanwhile in the U.S. it lay on the hands of the company; some differences are because of the laws that have been established. Another example are the holidays that Puerto Rico celebrates this is influences by Spanish rule, meaning that Puerto Rico is one the leading countries that provides holidays to all of the employees in short what differentiates between compensation plans is the culture.