HRM FPX 5310 Assessment 3 Total Rewards PackageHRM

Student Name

Capella University

HRM-FPX5310 Strategic Human Resource Management

Prof. Name

Date

Overview

This assessment aims to evaluate the current benefits and rewards package provided by Farm Fleet and Home (FFH). An effective rewards program encompasses several essential categories that are necessary for attracting highly qualified candidates who possess the skills and abilities required for job functions while aligning with the company’s goals and vision. A robust total rewards package can significantly reduce turnover and resignations within the organization, enabling FFH to maintain a strong workforce. Recognizing and rewarding employees is a critical component of an effective benefits strategy, ensuring that staff members are compensated fairly in comparison to current market competitors. Furthermore, a well-structured total rewards package can enhance the tenure of dedicated and high-performing employees within the organization.

The total rewards strategy will highlight several key factors that contribute to a beneficial program for both employees and prospective candidates, including:

1. Competitive salary and incentive rewards
2. Non-monetary rewards
3. Insurance and retirement benefit offerings
4. Employee time off, holiday leave, and recognition programs

HRM FPX 5310 Assessment 3 Total Rewards PackageHRM

The most effective total rewards packages are not one-size-fits-all; they can be a decisive factor for individuals considering employment or continuing their tenure with an organization. While attractive salary packages and incentives are crucial, they are not the sole determinants for employees who also require insurance for themselves and their families. Retirement options, such as stock and 401(k) plans, are essential for employees looking to establish a long-term career with FFH. Companies that offer accrued leave based on an employee’s tenure, holiday leave, and recognition programs foster a greater sense of appreciation for the work performed by their staff.

The management of this total rewards package will be overseen by the executive members of the human resources department within the organization. FFH must regularly review and ensure that their total rewards package aligns with current competitor offerings as they expand into larger markets across the Midwest. Potential applicants will consider not only the company’s reputation but also the benefits, rewards, and opportunities available during their employment. Total rewards encompass all resources available to employers when seeking to attract a high-quality applicant pool and retain current employees.

Market Comparison

Salary and Incentive Compensation

An analysis of current market salaries across the United States indicates that the Midwest offers some of the highest wages. To remain competitive, FFH should position their salary offerings for starting sales representatives in the mid-range of current market salaries, with starting salaries around $55,000 annually. In addition to salary, it is important to consider incentives awarded for sales performance and bonuses for high achievers. Implementing performance-based incentives for contracts signed and sold over $5,000 would be an excellent starting point. A flat-rate incentive of $250 per signed contract should be established as the initial benefit. As performance improves, employees who excel within the organization could receive commission bonuses based on the total sales they generate, with a proposed 5% commission on total sales exceeding $10,000, providing a reasonable return while allowing FFH to remain profitable.

Non-Monetary Compensation

In developing a total rewards package, it is crucial to consider the current family dynamics. FFH must recognize that approximately 60% of households with children have two working parents. Benefits related to parental leave and an understanding of the responsibilities of working parents are essential components of the package. Offering parental leave, flexible scheduling, and options for prepaid college savings plans that are payroll-deductible or dependent care savings plans would attract more qualified applicants to FFH. Parental leave is particularly important for families with two working parents, as unexpected situations may arise that require employees to leave work early, arrive late, or take leave to address family obligations. FFH should evaluate their attendance and scheduling requirements to identify areas where adjustments can be made for employees needing flexibility. While some positions may necessitate strict schedules, roles such as sales representatives may have the opportunity to work remotely when family obligations arise. Additionally, it is vital for FFH to consider personal circumstances and develop strategies to support their employees who are parents.

Another aspect of non-monetary compensation includes access to on-site amenities, complimentary beverages (such as bottled water and coffee), and employee discount programs. Amenities may consist of an exclusive employee gym, clean restrooms, and breakrooms stocked with free beverages. Offering discounts of around 5% on retail-priced items at FFH stores can provide significant benefits without necessitating substantial monetary contributions to employee salaries or benefits. Small perks like these, along with complimentary luxuries, can effectively demonstrate to employees that the company values their dedication.

Insurance and Retirement

According to the 2020 U.S. Bureau of Labor Statistics National Compensation Survey, participation in medical benefit plans varies across industries, with approximately 75% of workers in the private sector enrolling when offered access to medical plan options. FFH should provide a comprehensive benefits package that includes medical, dental, and vision coverage for both employees and their families. A higher percentage of employer coverage will make these options more appealing to both potential and current employees. Typically, private sector employers cover 70-85% of employee insurance costs while contributing a smaller portion for dependents. It is essential for Farm Fleet and Home to ensure that insurance coverage for employees and their dependents is consistent across the organization to prevent discrimination.

Retirement planning options are also a crucial component of a well-structured total rewards package. As a private sector employer, FFH should collaborate with a 401(k) or savings plan administrator that allows employees to contribute a portion of their wages, supplemented by a company contribution. Providing a retirement benefit can encourage both current employees and new hires to remain with the organization long-term. It is important to analyze competitive retirement programs in the market to identify plans that offer the best returns for employees while minimizing costs for the employer.

Paid Time, Holidays, and Recognition

Total compensation statements provide employees with information about their complete pay package, including both direct and indirect compensation (SHRM, 2017). Employee perks and rewards are considered alongside salary and insurance offerings. Total rewards programs enable employers to evaluate each employee based on productivity, tenure, and the understanding of personal time needed outside of work. An employee’s worth is not solely determined by salary; they also value the investment that employers make in their time and efforts, which fosters a positive workplace atmosphere and enhances engagement and morale. Employees are more likely to remain loyal to a company that demonstrates that their time and personal interests are valued.

Employers who offer greater flexibility resonate well with all generations in the workforce. Paid time accruals serve as an excellent benefit to reward employees for their hard work. While accrual rates may vary by company, a standard practice is to allow employees to accrue eight to ten hours of paid time off per month based on hours worked. This system enables dedicated employees to take necessary leave for personal reasons. Companies with employees who accumulate excessive paid time off may consider implementing a paid time buyback plan, allowing employees to sell back accrued days at a designated time of year, as approved by management. This option could be particularly beneficial at the end of the fiscal year when budgets are closing and before the holiday season, when many families face financial pressures for gifts and vacations.

HRM FPX 5310 Assessment 3 Total Rewards PackageHRM

In addition to personal time, holiday pay for nationally recognized holidays is essential. Acknowledging the importance of traditions and allowing time off for holidays is an effective way to attract a strong workforce. Although some holidays, such as Thanksgiving, coincide with the busy shopping season, FFH can still reward employees working on those days with additional leave time or special pay rates. While the company may not be able to close stores entirely during the holiday season, offering current employees time off to be used later or extra incentive pay for working can encourage more employees to work on holidays.

Recognition opportunities for employees provide motivation to perform at higher levels and foster a sense of personal achievement. Designating an “Employee of the Month,” featuring accomplishments in company newsletters, and hosting periodic gatherings to celebrate achievements within smaller departments offer non-monetary benefits that recognize employee contributions. Highlighting top performers on a display wall within the store and featuring exceptional accomplishments in customer service, educational advancements, or promotions in newsletters not only showcases individual achievements but also demonstrates that the organization values each member’s personal and professional growth.

Legal Compliance

To ensure legal compliance when offering a total rewards package, Farm Fleet and Home (FFH) must evaluate and confirm that their operations adhere to legal guidelines. The Fair Labor Standards Act (FLSA) is a critical component of this assessment and operational framework. It is essential for FFH to understand the legal requirements related to minimum wage, overtime pay, time recording, and the employment of minors (under 18 years of age). FFH is obligated to pay employees at least the minimum wage, which can vary by state, necessitating careful consideration for each office’s location. A standard workweek is defined as forty (40) hours, and any hours worked beyond this threshold must be compensated at an overtime rate. Failure to comply with these regulations can lead to serious legal consequences, including fines, lawsuits, and potential business shutdowns.

In addition to fair wages and overtime compensation, the FLSA also protects youth employment. Minors are restricted from working more than forty (40) hours per week and cannot work past 10 PM on nights preceding a school day. Another important legal consideration is the Age Discrimination in Employment Act of 1967 (ADEA), which safeguards individuals aged forty (40) and older from discrimination in various employment aspects, including hiring, promotions, compensation, and termination. Employment decisions must be based solely on job performance rather than age. The assessment of the total rewards package should ensure that it does not discriminate against any individuals who may benefit from it, including those with disabilities under the Americans with Disabilities Act (ADA) or those utilizing benefits under the Family and Medical Leave Act (FMLA).

Fair consideration for employment opportunities, promotions, eligibility for benefits, and participation in incentive programs must be consistent across the organization. The total rewards package should be accessible to all employees, including current staff and potential applicants. Under the FMLA, employees are entitled to utilize this benefit if they meet the minimum employment requirements, which include one (1) year of employment and at least 1,250 working hours. This act is designed to prevent discrimination against employees regarding medical situations related to their health or the care of ill family members. Additionally, the Pregnancy Discrimination Act (PDA) prohibits discrimination against pregnant workers concerning any employment aspect, including hiring, termination, equal pay, promotion opportunities, training, and benefits such as health insurance and leave time. Misusing the total rewards package to penalize or alienate employees based on discrimination is strictly prohibited.

Recommendation

Farm Fleet and Home should initiate the implementation of an effective total rewards package by evaluating current liabilities, benefits, and policies within the organization. Completing this assessment will provide a comprehensive overview that facilitates expansion, necessary changes, and the effective implementation of policies to ensure legal compliance. Following the assessment, FFH should focus on income and market salary adjustments. According to statistics from the U.S. Department of Labor, FFH should aim to offer a competitive median salary range for each position, ensuring compliance with local and federal minimum wage laws while allowing for a more robust benefits package in other areas.

Regarding insurance and retirement offerings, FFH should provide a comprehensive plan that covers 80% of insurance costs for employees, with employees responsible for the remaining 20% of the monthly premium. Family and dependent coverage should be offered at 65% coverage, with employees contributing 35%. This approach will enhance employee retention and attract potential candidates. Additionally, FFH should seek a retirement plan with low administrative costs and a strong historical return. Comparisons should be made with top companies such as Nationwide and John Hancock. FFH will contribute 3% of employees’ annual earnings to the retirement plan, allowing employees to contribute up to 6% of their income.

HRM FPX 5310 Assessment 3 Total Rewards PackageHRM

In terms of bonuses and commissions, the company should establish a fixed bonus for sales team members based on quarterly sales performance and implement an incentive-based program for top performers that follows a percentage-based earning schedule. Paid leave and holiday pay should be offered uniformly across the organization to ensure equitable treatment of all employees.

Each employee who works a minimum of 100 hours in a month will accrue 8 hours of leave time without any deductions. This leave time can be utilized for paid personal leave or vacation, including circumstances that qualify under the Family and Medical Leave Act (FMLA). This policy ensures that employees have the opportunity to earn one day off each month, in addition to any holidays that may occur during that time. Employees who maintain at least 80 hours of leave in their bank will have the option to sell back that time during the month of October each fiscal year. The maximum number of hours eligible for purchase will be 40, compensated at the employee’s current hourly rate.

To recognize outstanding performance, FFH will implement a monthly recognition program for top performers, designating an “Employee of the Month.” This recognition will be featured in a company newsletter that highlights customer compliments, management recommendations for recognition, and acknowledges significant events in employees’ professional and personal lives. By offering this comprehensive total rewards package, FFH aims to maintain a competitive edge over rival businesses. The package emphasizes not only monetary compensation but also addresses the individual needs of employees, fostering a positive workplace environment with strong morale and opportunities for growth.

The recommendations provided support a diverse workforce, focusing on a total rewards and benefits system based on job performance and employment-related factors, free from discrimination against any protected group. No benefits or guidelines associated with the implementation of this plan will be influenced by factors such as sex, race, gender orientation, age, disability, or medical conditions. It is crucial to establish clear and unified guidelines that do not indicate any preference based on personal characteristics.

References

Bureau of Labor Statistics. (n.d.). Databases, tables and calculators by subject. Retrieved from https://www.bls.gov/data/#employment

Pregnancy Discrimination Act. (n.d.). Retrieved from https://www.eeoc.gov/pregnancydiscrimination#:~:text=The%20Pregnancy%20Discrimination%20Act%20(PDA,term%20or%20condition%20of%20employment.

U.S. Department of Labor. (2019). Family and Medical Leave Act | U.S. Department of Labor. Retrieved from https://www.dol.gov/agencies/whd/fmla

U.S. Department of Labor, Employment and Training Administration. (n.d.). O*Net online. Retrieved from https://www.onetonline.org/

What should be included in a total compensation statement? (2017). SHRM. Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/hrqa/pages/totalcompensationstatement.aspx