Critique a colleauges total compensation package 500-800 word count
The current task presented to me as the new CHRO has been to overhaul the benefit package that has been in place for some time. With recent evidence from an employee survey demonstrating overall decreased job satisfaction, the proposed changes aim to provide a diverse number of options and improvements within the compensation plan with current and future workers in mind.
Compared to our competitors in the surrounding area, our hospital ranks at the 50th percentile for wages. Recently a survey conducted of our employees noted that 30% of our nursing staff are looking at other jobs and staff turnover has increased over the past two years. Turnovers in and of themselves can be expensive. In order to retain our employees and potentially attract top talent increasing wages for all of our employees must be a necessity. According to Leonard (2019), proper compensation for employees demonstrates that we value them as workers and boosts employee loyalty and motivation. A recent analysis performed by Castillon (2019) demonstrated that employees of small businesses earning minimum wage had a 70% chance of leaving within a year. Turnover rates decreased significantly to 41% once their pay was increased above the minimum wage. For the revised total compensation package, wages would be increased for all employees to the 60th percentile. Increasing compensation for all employees will have a direct impact on job satisfaction. The ability to retain top employees and to attract top candidates for positions with our increased wages and salaries will allow us to be competitive within our regional market.
In their 2019 survey, The Society for Human Resource Management identified that leave benefits and flexible scheduling have only shown modest increases when compared to prior years. Over 90% of organizations offer some type of paid leave to their employees. Other surveys have noted that 75% of American workers view paid time off as an important component that their employer offers. Ensuring that this benefit is offered to our employees is crucial to our organization. The implementation of paid time off policies have resulted in decreased unscheduled absences and have a direct correlation with increased productivity, better overall physical wellness of employees and will place our organizations brand in a positive light. Our revised compensation plan will increase paid time to 10 days per year. This adjustment will appeal also to our younger workforce as this tends to be an area of great interest to Millenials and Generation Z employees.
Our current benefits package offers health insurance solely to our employees. With our new compensation program health insurance will now include coverage for spouses and dependents. Health benefits continue to be one of the most important categories for employees and 86% of employers believe that health-related benefits are necessary (SHRM 2019). A survey also noted that 46% of employees said that health insurance was either the deciding factor or a positive influence in choosing their job (SHRM 2019). According to Goldstein (2018), offering benefit packages with more health options will also empower employees to better manage and take control of their health. Our organization could offer an array of plans to our current employees and potential new hires that would include options such as preferred provider organizations plans or high-deductible health plans, with or without health-savings accounts. Increasing our relative cost points in the healthcare insurance category to 2.5 to include additional benefits to our employees and their families, in conjunction with our other benefits, will ultimately result in an increase in our employee retention.
Investment and Retirement
In 2018, Zaharee (2018) attempted to determine the qualities an organization should have in order to attract and retain early career talent. In their study, they found that more than 80% of the respondents in the Gen Z, Millenials, and Gen X age groups identified a matching 401k plan as an attractive benefit from an employer. Presently we offer a 401K plan with no matching option. The proposed new plan would add 3% match. Following closely behind the matching 401k plan as an ideal benefit for the groups was student loan repayment options. It did appear to be a more popular option with younger employees. Schaefer (2019) notes that tuition fees have risen by over 400% from 1982 which has forced prior students to look for ideal ways to tackle their debt. Schaefer (2019) also identified that employers have the option to create the loan repayment program that will fit the organizations needs also. While our current option would offer to pay 30% of the balance of our employees student loans with a maximum of $12,000, this option could be revised in future compensation package offerings depending on our organizations bottom line. The proposed changes to the 401K plan and student loan repayment benefit would account for relative cost points of 1.5 and 3.0 respectively.
In conclusion, the changes that are being proposed to our total compensation program to offer to current and future employees will strive to not only attract the top candidates for future employment but will also decrease our current rate of staff turnover. Our total relative cost points for the new program will be 12.0. It is necessary for us to make these changes in order to offer the best benefits to our workers, to increase morale, and to become more competitive within our current market.