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Compensation and Benefits Recommendations Essay

No matter the size of the business, there is a need to evaluate an individual business’ compensations and Benefits. Each business will be unique; rarely will two businesses have the same benefits. These benefits will show employees, and future employees, what it is worth to work for the company. In this recommendation, it will outline various parts of the compensation and identify the pay act that this package will follow. Market Evaluation

Creating attractive compensation package is a difficult task when entering new markets. After reviewing the benefits and compensation for Turner Construction Company, Ames Construction, Inc., and DPR Construction which are located in Arizona, the companies have these benefits in common: Medical, Dental, Retirement/Pension/401K plan. Turner Construction Company does offer more such as vision insurance, health club reimbursement, life insurance, accidental death and dismemberment, short term disability, long term disability, tuition reimbursement program, and professional certifications and licenses (Turner Construction, 2014). The compensation package offered by DPR Construction includes additional benefits like vision insurance, adoption assistance, personal time off, holidays & holiday shutdown, Flexible Spending Accounts, and Critical Illness Insurance.

DPR construction has noted that employees must be non-union and full time employees to receive the full benefits package, but part time employees are eligible for medical, dental, and vision coverage (DPR Construction, 2014). The compensation package offered by Ames Construction, Inc. does not include extra benefits that Turner Construction and DPR Construction offer (Ames Construction, Inc., 2014). With the information provided, an attractive compensation and benefit package that is tailored to the area can be created for your employees in Arizona. Recommended compensation structure

As commercial construction organization entering a new market you will need to have a compensation structure that is comparable or higher to others in the area. When entering a new market, it will be essential to offer a structure that attracts experienced employees that will provide creditability to the new market. It will be essential to have these people in place and show your customers that your organization is committed to being their primary choice for new projects. When determining a compensation plan there are steps that should be considered. The first step is to determine what type of pay structure you are going to use.

For your business a pay grade system is the best option. This type of system allows for your organization to compensate employees based on their years of experience and knowledge of the field (Martocchio 2011). The next step is determining the market baseline for the positions. In Arizona, a commercial foreman (salary/exempt) earns about $35,000-$92,000 per year, an estimator/project (salary/exempt) manager receives about $32,000 – $98,00 per year, and a general laborer (hourly/nonexempt) receives about $8.71-20.55 per hour (“May 2013 State Occupational Employment And Wage Estimates Arizona”, 2014). The next step is to identify pay grades. This will allow an employee with more experience to receive more income. Below are examples of the three positions listed above: Foreman I – 0-5 years’ experience as a foreman for a commercial construction. Foreman II – 6-10 years’ experience.

Foreman III – 10+ years’ experience.
Project Manager I – 0-2 years’ experience, bachelor’s degree, no project management (PMI) certificate. Project Manager II – 3-5 years’ experience, bachelor’s degree in project management, PMI certificate. Project Manager III – 6+ years’ experience, experienced interaction with customers, PMI certificate and a bachelor’s or higher degree in project management. General Laborer I – 0-3 years’ experience, high school diploma or GED and basic commercial construction knowledge. General Laborer II – 4-9 years’ experience, high school diploma or higher, advanced knowledge. General Laborers III – 10+ years’ experience, high school diploma or higher, expert knowledge. The next step will be establishing the pay ranges for the positions. The recommended pay structure is as followed: Foreman I – $35,000 – $42,000

Foreman II – $42,000 – 57,000
Foreman III – $57,000 – $95,000
Project Manager I – $32,000 – $50,000
Project Manager II – $50,000 – $75,000
Project Manager III – $75,000 – $100,000
General Laborer I – $8.75 – $12.00
General Laborer II – $12.00 – $17.00
General Laborers III – $17.00 – $20.50
The last step, which will be an ongoing step, is to evaluate the pay structure. As an organization you will need to determine if the pay scale matches the talent you are hiring and if adjustments need to be made. Another adjustment that may need to be made is include minimum wage for general laborers. Recommend a position on the Market

There are three positions that are recommended to position the company in the market. Management must decide which strategy will best fit the goals of the organization. To lead the market in compensation will be costly. The advantage to leading the market is the company will likely get top talent for the pay. This is unless the top talent is already gainfully employed, then the company may get mediocre talent for top pay. Another possibility is to position the company at the bottom of the market, or to lag in the market. This is not a very attractive employment tactic; however there is a plethora of benefits that can be added to the package that would be more attractive to those that do not consider money the primary reason for joining an organization.

The recommended strategy for the organization is to be somewhere in between the high and the low. It is feasible to match the competition in salaries but to offer a package of incentives that will distinguish the company from the other competitors. Some of the ideas management might consider are paid time off from work to include holidays, vacation days, personal days, sick days, and paternity or maternity leave (Heathfield, 2014). Another benefit could be comprehensive dental insurance, many companies are forced to offer medical insurance but dental insurance could be a great selling point to attract potential employees.

Perhaps the most important to some people will be investment. The company should consider establishing a retirement plan or 401(k) for employees. This helps in recruiting employees but also increases the opportunity to maintain employees. There are other incentives that can be offered at the discretion of management. Little incentives like day care, a pumping room for new mothers, and incentives for going to college can make the company more attractive than other similar companies with similar salaries for employees. Total compensation and benefits strategy

In today’s economy it is important for a company to have a total compensations and benefits package. The new Obama care guidelines state that everyone must have health insurance. Providing this to your employees will help to relieve some of the financial burden associated with health insurance. Other reasons to offer health insurance according to the Center of Disease Control are healthier people are less likely to take time off of work and are more productive while at work (“Workplace Health Promotion”, 2014). Other health benefits include dental, vision insurance, and health-club reimbursement. Flexible spending, life insurance, short and long term disability are other benefits that are recommended for employees. Tuition Reimbursement is a great way to show your employees that you are committed to their future and rewarding them for obtaining a higher education. This can also include professional certificates. An employee referral program is a great way to reward employees for their referrals and obtain new applicants. Performance Incentives and Merit Pay

As with other business transactions, incentive programs need to be managed with a clear definition with planning, setting goals, assigning responsibility, defining objectives and managing the implementation. A well-executed incentive program will justify its cost through reduction in injury costs, reduced time away from work, and slowing the rate of increase in insurance costs (Hislop, R. D., 1993). Incentive programs need to focus on program elements relative to the industry. Safe work habits and the reduction of absenteeism shall be the focus of these incentives. Define the criteria:

What is to be accomplished in order to earn the award
The recognition to be offered
Establish who qualifies for the awards; (individuals, teams, contractors) Provide a definitive time line
Evaluate the risks that are present
In order to encourage sense of ownership, urge employees to help manage and control their workplace. Incorporate a sound safety program including not only the safety training but regular toolbox talks (Hislop, R. D., 1993). An offer of $.50-per-hour bonus to each work-crew if the entire crew is present throughout an entire pay period has been an effective tool for one Houston based construction firm (Hislop, R. D., 1993). The additional labor costs are moderate in comparison to the costs associated with hiring, training and injury expenses incurred when laborers are injured or present a high absentee rate. Establishing the incentive as one centered on absenteeism than injury related will curb the possibility of workers not reporting injury in order to achieve bonus and will encourage presence on the site thereby alleviating unnecessary absenteeism. Injuries happen often when a full crew is not present on the jobsite and with the incentive pay; every crew has the opportunity for the bonus. Relating Law

With this package, the main focus will be towards the Equal Pay Act. This Act is set forth that requires men and women receive equal pay for equal work in the same establishment (USA.gov, 2014). There is room for differences in pay based upon seniority, merit, or even quality of production. If you find your business in a situation where this act is being violated, you are not allowed to lower the higher paid employee, but you must raise the lower paid employee. When evaluating specific benefits compensation, all aspects need to be considered when attempting to move into a new market. Comparison with current competitors is a wise decision to determine where a new company should choose which benefits. Careful planning will greatly assist the business in setting up as a successful company in the new market.

Ames Construction, Inc. (2014). Benefit Package. Retrieved from http://www.amesconstruction.com/benefit-package.cfm DPR Construction.
(2014). Benefits. Retrieved from http://www.dpr.com/company/careers/working-at-dpr/benefits#holidayshutdown Turner Construction. (2014). Benefits, Compensation and Rewards. Retrieved from http://www.turnerconstruction.com/careers/life-at-turner/benefits Heathfield, S. M. (2014). What’s in a comprehensive employee benefits package? About.com Human Resources. Retrieved from http://humanresources.about.com/od/compensation-structure/tp/employee-benefits-package.htm Hislop, R. D. (1993). Developing a safety incentive program. Professional Safety, 38(4), 20. Retrieved from http://search.proquest.com/docview/200382925?accountid=458 Cost Estimators. (2014). Retrieved from http://www.bls.gov/ooh/business-and-

May 2013. State Occupational Employment and Wage Estimates Arizona. (2014).
Retrieved from http://www.bls.gov/oes/current/oes_az.htm
Martocchio, Joseph J. (2011). Strategic compensation: a human resource
management approach. (6th ed.). Boston: Prentice Hall

Equal Pay/Compensation Discrimination. (2014). USA.Gov. Retrieved from http://www.eeoc.gov/laws/types/equalcompensation.cfm

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