Organizational Philosophy on Compensation and Pay Strategy
...e their professional goals, improve the productivity of their organization and provide leadership and service to their communities. The employees of ACE University are held to the highest standards of customer service, whether it is when dealing with our students, faculty or personnel. We are to treat each individual person as a valued customer of the company. A strategic approach to compensation requires organizations to make choices over a broad range of pay issues, including pay structure. At ACE University, we use the hierarchical rate structure. Our Human Resources department created this pay system because it helps the company gauge the individual performance of workers in a team environment. The system was implemented a few years ago and has been very efficient. A hierarchical rate structure means that supervisors determine their employees pay grade position. This can be used as a tool to motivate employee behavior, attitudes and performance. Every six months we are given performance evaluations to determine our production goals for the quarter. Raises are based upon performance and are measured by the scores that were given by management during the evaluations. If you were previously promoted to another department or position they would combine your scores and average them out to get your percentage. To receive a raise from the company an evaluation score must be greater than a two, five being the highest score possible. The company also offers incentives for the team not the individual employee because we work in a team environment. Some incentives ACE University offers to the team might be a day off for everyone if we hit our goal or free lunch. It depends on the amount of money the company has allotted for each person. Some set backs of being under a hierarchical structure is that co-workers might feel as though they are in competition with other co-workers to achieve a pay increase. This could cause bad co-worker relations. Also greater recognition is given to those who have better performance. This might create high levels of stress in co-workers who are not making production. Recommendation for the current pay system would be to implement a system that would reflect both the flat rate structure and the hierarchical structure. For instance, taking the flat rate pay system and integrating it into a grading system by skill, attendance, and accuracy. This could potentially create a balance between both of the pay systems. ACE University recognizes that our employees’ lives are more important than work. This is why ACE University provides benefits that help our balance employees’ life's and protect them against financial hardship in the event of an illness, accident or death. ACE University provides retirement plans—consisting of 401K and Pension Plans—are designed to help our employees reach their future financial goals. The combination of a 401(k) plan with company-matching contributions and a pension plan helps us attract and retain valuable employees. Each of ACE University’s investment plans allows our employees to select among a variety of investment options to maximize your retirement savings opportunities. Account balances are updated daily, so you can always know how much you have saved for retirement. The Pension Plan is a cash balance-type pension plan. If the employee leaves the company, they can take with them the vested portion of their Pension Plan. The employee also can take their personal 401(k) Plan contributions and the vested portion of their company match. Though both plans are designed for long-term savings, the employee can access money to meet short-term needs. The Pension Plan offers loans for any reason and the 401(k) Plan offers withdrawals under certain circumstances. The bands are used to group jobs across our company, similar in scope and complexity, organizational impact, degree of independent judgment and discretion, knowledge and skill levels. Various factors are used to assign jobs to bands including job duties, scope and responsibility. Bands are not based on salary level, reporting relationships or associate performance. Bands do not determine pay; the pay is determined by indiv...