Compensation and Benefits Systems Research Paper

Compensation and Benefits Systems - Research Paper Example It is also a matter of fact that job satisfaction is key to the retention of an employee to his/her current job, particularly in the face of high salary provided in other companies. It is for this reason that the human resource function of many companies considers compensation and benefit systems as its integral part. The move is mainly driven by change in world economy, change in company due to market and legal forces, innovational needs and decisive thinking in order to be able to remain competitive. The type of compensation and benefit system that a company uses for compensating its staff can be valuable in the company’s efforts to gain competitive advantage and be able to achieve its missions and visions. A well organized incentive compensation plan has the effect of giving employees the feeling that the organization they are working for is fair. Employees also need to have a better understanding of their earning potential for them not to see those offered by other compani es as attractive. General Motors, an American company that deals in the manufacture of automobiles is one such company that recognizes the value of compensation and benefits system to its employees. ... According to General Motors’s pay-scale report of December 2010, auto mechanics are projected to earn a mean salary of $18 per hour, assembly-line workers earn $29.49, journeymen electricians earn $31.47, and those doing assembling get $28.97 while millwrights get $30. Locsin cites that General Motors’s employees on salary get compensation worth $79,665 annually for mechanical engineers; $75,505 for industrial engineers, project engineers get a compensation of $83,182; mechanical design engineers getting $79,992; product development engineers being compensated $80,785 while manufacturing engineers getting $78, 683. This form of compensations is meant to motivate the employees in different department for them to increase their effort and remain loyal to the company (Locsin 1). The company also considers the experience that an employee has in compensating its workers. In this regard, an employee who has a lot of experience is being rewarded more compared with those who ha ve not acquired a lot of experience. According to the General Motors Corporation’s pay scale of December 2010, new employees of the company earn $53,500 yearly, while those who have between one to four years of experience pocketing $64,160 (Locsin 1). He also reports that after an employee has worked for between five to nine years, these employees are considered with a reward. In this case, they get $75,043. Those who have served the company for between ten to nineteen years are awarded $82,480 yearly and those with more than twenty years of experience get $94,527. This kind of benefit was introduced as a way of increasing job satisfaction and retaining company’s employees with many years of experience. Locsin notes that compensation at General motors is also affected by an