Critique a colleagues compensation package in response 500-800 word count
Total Employee Compensation Package 2020
I would like to begin by thanking you for this opportunity to put together a package that will not improve employee morale and tenure but to also positively affect the operating budget by effectively rolling out this employee compensation package.
My goal is to limit relative cost points to 13.0. The presented employee compensation package meets that goal at 12.5 relative cost points. The following page/s will describe the package and how it will positively affect our workforce.
Increase Minimum Wage to $15/hr. (Relative Cost Point 1.0)
I have chosen to increase minimum wage instead of all wages because numerous studies have concluded that for people with satisfactory salaries, some nonfinancial motivators are more effective than extra cash in building long-term employee engagement in most sectors, job functions, and business contexts (Dewhurst, Guthridge, Mohr, 2009). Increasing minimum wage will allow us to be competitive in the current market. The local healthcare landscape is quite saturated. With 15% of our total workers are minimum wage, a competitive minimum wage will increase employee tenure. As a result, turnover costs will be reduced. In a recent analysis of why employees leave small businesses, the research team at payroll, Human Resource and benefits company Gusto found a strong correlation between hourly wage thresholds and the rate of turnover (Castillon, 2019). Millenials account for 32% of our workforce. According to a recent study, a stagnant minimum wage impacts young adults due to the rising costs of living (Ahuja, Audelo, 2014).
Extended FMLA (12 weeks paid) (Relative Cost Point 2.0)
The Family and Medical Leave Insurance Act was passed in 1993 requires twelve weeks of unpaid leave for certain eligible employees for serious illness, care for a family member, or care for a newborn or adopted child. This has affected women often due to child birth. These policies are critical for new parents, particularly for women. Women are disproportionately likely to take responsibility for caring for a new child. Currently, census data shows that 40% of new mothers have to take unpaid leave, and one quarter quit or are let go from their jobs after giving birth. Those who take unpaid leave often experience economic difficulties, with around one third having to borrow money, draw from their savings, and leave bills unpaid, and 15% turn to public assistance (Wynkoop, 2015). The extension of FMLA not only will improve employee tenure but also increase employee satisfaction mostly among women who represent 91% of our nurses.
Flex Spending Plan – includes Dental, Optical, Medication (Relative Cost Point 0.5)
Added benefits to the current plan make this compensation package much more appealing to our staff. Giving our staff the freedom to use flex spending for important services will continue to provide small examples of our “employee-first” culture.
Add 6% 401k Match (Relative Cost Point 3.0)
We are striving as a company to build a culture of togetherness. As administration we must also show, through this compensation package, that we truly care about the well-being of our workforce. The average 401k match in the local market is 5%. Adding 6% 401k match will show the 25% of our workforce (Baby Boomers) that we care about their wellbeing when they are ready to retire.
Student loan repayments (Pay off 30% of balance, up to $12,000) (Relative Cost Point 3.0)
While this may seem like a progressive policy, it may bring a large return. 68% of our current workforce (excluding physicians) are Generation X and Millennials. According to Experian, the Generation X and Millennials represent the 1st and 3rd highest average student loan balance by generation (Stolba, 2019). Implementing this in our compensation package will immediately improve our employee satisfaction survey scores. It can also be assumed that employee tenure, employee morale, and employee potential will increase exponentially. Although this can be seen as a financial incentive, one can argue that this can be categorized as an employee growth benefit.
Offer On-site day care for all employees (Relative Cost Point 3.0)
55% of our workforce has a child ages 1 through 12 years old. Offering on-site day care for all employees provide a great benefit for our employees. Nearly 80% of women with children between the ages of six and 13 work outside the home. This means that when a child is ill or when normal childcare arrangements fail for any reason, one of the parents may have to call in sick to look after their child. Moreover, according to Accor Services, each childcare crisis takes an average of 16 hours to resolve and 80% of that needs to be done in working hours (HR Magazine, 2001).
In conclusion this total compensation benefits package is a forward-thinking model that will provide an immediate impact in our workforce. As a result, I expect our competitors to soon implement similar benefits due to the success we will have with this package. Our targeted culture of “togetherness” and “employee first” is reflected by this package. This compensation package also has a Relative Cost Point total of 12.5. I have maximized the potential of our current benefits by adding the missing components. Immediate impact include improved employee survey scores, improved staff morale, improved employee tenure, reduced absenteeism, and reduced turnover.