Total compensation plan
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Virtual organizations provide an opportunity for practical experience of theoretical knowledge in real world business scenarios. They allow students to identify and solve complex business issues based on critically analyzed solutions. Riordan manufactures, which is one of the virtual organizations is a vibrant plant that manufactures plastic substrates from polymers. It provides a webpage platform for active engagements of students on real business issues ranging from problem solving, improvement of existing business sectors to introductions of new systems for efficacy and growth.
The business world is so competitive and creative ways on how to outsmart competitor are necessary. Workers are regarded to be the greatest asset and the firms’ turnover is always at their mercies. Success of the firm and high profit margins depends on workers’ productivity. This can be fully exploited through total workers compensations and incentives by the board. Compensation plans will range from direct financial incentives such as wage and salary increments, bonuses and commissions to indirect financial plans such as free daycare programs for parents, prizes and other insurance perks. Non- financial plans will include safe environments and fair treatment for Riordan manufactures.
Riordan manufacture objective is to become one of the largest plastic manufacturing plants with mission statements to help see its success. Critical areas that help define the mission statements at Riordan manufacturers are, on customer relationship seen as a solution for the customer, focus on abilities and attitudes that exceed industrial standards, innovative and team oriented working environment and to ensure long term viability of the firm. For realization of all this mission statements, particularly on the long term viability, the management should strive to ensure a long term relationship with employees. This can be done with introduction on long term incentive plans for employees to ensure that they stay committed to the firm. One of the compensation plans to ensure long term viability of the company is the introduction of strong retirement package plan. The package plan should be enticing enough as compared to other competitors in the industry to retain their loyalty and commitment.
Innovation and team work is necessary for success. Integrating of indirect financial compensation plans such as employees’ workshop and lectures on career growth at the firm’s expense motivates employees and concurrently modifies their skills. Currently, most firms sponsor their members to career development workshops; analyze their performance before promoting them. The firm should also realize that the success of the sales person is achieved from combined efforts of the store keeper and other handy staffs. Riordan should focus on a team retreat of the entire staff, from the manager to the janitor since their collective efforts result to success. Arranged holyday vacations to recognize the entire teams’ performance will further encourage team work and motive future performances.
Apart from employees, loyal customers of Riordan manufactures, ranging from beverage firms to assembly industries ensure their existence. Compensating this consumer firms in the form on offers and prizes will strengthen relationships and loyalty. Reduced prizes to loyal customers as a form of recognizing their contribution to Riordan success will enable you retain them, even at difficult economic times, such as recession period.
The company should compensate employees as well as customers will stocks allotment. Stock issue is a form of ownership. Compensating workers with company shares is a way to ensure the success of your company as well as fostering relationships with the firm. Employees will strive for excellence in their performance triggered by partial ownership.
The market environment is very volatile and hardly predictable. Individual efforts and ideas will at time help firms navigate through economic turbulences. Apart from the team compensations, the board should analyze such efforts and recognize them by giving addition commissions and bonuses to such outstanding members of the team. Though the sales person needs the inventory person to successfully play his/her role, at times, his/her extra mile on sales results to extra revenues to the firm, under this situation, his efforts need to be appreciated to further motivate him. In such a case, equity is enforced with regard to extra input.
A safe working environment is necessary to guarantee the safety of workers. Availability of safety gadgets for employees in their interaction with heavy plastic synthesizing machines reduces risks and worries. Introduction of safety insurance policies in Riordan create worry free environment and direct this constrained efforts embedded in worries to production.
Performance appraisal and compensation plans are necessary to motivate worker’s productivity, but at the same time, keen interest to economic factors, profit margins and compensation packages from competitors should be considered before such plans. Firms need retained profits too, to help them survive and grow. Very high compensation costs will eat on Riordan profits. With the current $2million profit margin, Riordan should ensure that workers are duly compensated but not to the extreme. This is because, not only should they compensate employees, customers and owners but also the firm itself. New machineries and integrating of technology is necessary, a new company outlook should also be part and parcel of the compensation plan.
The main goal of compensation is to ensure that workers fully concentrate on their work and not on other issues, improve performances and take every opportunity to ensure the success of Riordan firm. The concept is simple, great results, high pay. Currently, firms are defining other modes of compensation, with daycare programs for children being the most recent. The future is unpredictable and compensation seems to be taking a different direction from financial norms to services for employees and many are yet to embrace this change.
References
Allen, E. T., Melone, J. J., Rosenbloom, J. S., & Melone, J. J. (1976). Pension planning: pensions, profit sharing, and other deferred compensation plans (3d Ed.). Homewood, Ill.: R.D. Irwin.
Patten, T. H. (1977). Pay: employee compensation and incentive plans. New York: Free Press.
