Compensation and Benefits Essay
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This assignment compared and contrasted compensation programs of McDonald’s and Walmart Canada. It look at the Philosophy, Base pay, Short term and Long Term cash incentives, indirect compensation benefits and Recognition programs. The Philosophy of McDonald’s is “Pay for performance” while Walmart promises a lot of career opportunities. McDonald’s compensation program is more suited to encourage young high performance culture. While Walmart rewards more stable employees that will stay with the company for a long term. Compensation System comparison of McDonald’s Restaurant and Wall-Mart’s (Canada) Compensation Items McDonald’s Restaurant Wall-Mart(Canada) Pay and Rewards Philosophy Pay for performance philosophy.
The better your results, the greater your pay opportunities.
Culture rewards us. Anything is possible. Career opportunities. Base Pay Competitive wages. The average starting hourly pay $9.97 Annual salary for Managers and wages for the crew. Competitive wages. The average starting hourly pay $10.55 Annual salary for Managers and wages for the sales associate. Short Terms Cash Incentives Bonuses based on annual performance review and company strategic performance.
Target Incentives Pay. Bonuses based on annual performance review and company strategic performance. They always paid bonuses since 1997 even there is a recession.
The Comparison Analysis
The Philosophy of McDonald’s is” Pay for Performance”; it means that if your performance is better you will get a higher compensation. In contrast, Walmart’s slogan is ”Anything is possible”, meaning a lot of career opportunities are available to Walmart employees. McDonald’s is encouraging high performance culture (but that is likely suited for shorter term employees) while Walmart is more suited for people who look for long term career in a company and more opportunities to grow. Both companies offer competitive base pay. The entry level the crew or sales associates get hourly wages but the senior employees/Managers get base salary pay. Both companies offer short term cash incentives – variable bonus pay based on company performance and employee performance review.
The Walmart boasts that they pay bonuses even recessions. For long term cash incentives, both companies offer profit sharing plan. However, the Walmart has Group RRSP. Whereas, the McDonald’s has a savings plan. The Walmart offers the long term disability coverage, maternity leaves top up, while the McDonald’s offers more financial assistance programs and retirement benefits which is limited to severance package. For indirect compensation/benefits, McDonald’s rewards top performers with a car program, while Walmart gives 10% discount on everything purchased in their stores. Recognition program at McDonald’s is more intensive and includes awards like employee of the month, while at Walmart it is yearly “Star of the Year” award.
The compensation program of Walmart Canada is more tailored for long term stable employees; while the program at McDonald’s is better suited for younger, likely temporary employees and encourages high performance culture.