Compensation Philosophy Case Study Assignment Help

Introduction Compensation philosophy refers to a set of values and beliefs that a company has with regard to both financial and non-financial benefits payable to employees (Bogardus, 2006). It also includes a set of guiding principles that further assist in compensation administration.This compensation philosophy case study assignment Help paper discusses AT&T’s compensation philosophy and its evaluation. It also proposes ways to enhance or revamp the current compensation philosophy to meet the changing needs of the organization and its employees. It also identifies key factors within the internal and external environment including the mission, strategic focus, financial and cultural aspects of the organization that should influence this philosophy.

 

AT&T’s Compensation Philosophy The company believes that the compensation program for executives at AT&T should be designed for attracting and retaining them for a long period of time. The compensation philosophy provides a strong link between achievement of overall company’s objectives and an executive’s total earnings opportunity. Core principles of company’s compensation philosophy include competitive compensation opportunities, performance based payments and significant portion of the total compensation opportunity should be equity-based (Board Compensation Committee Report on Executive Compensation). The current compensation philosophy of AT&T is effective in terms of attracting and retaining employees and high-caliber management team within the organization. It is also effective as it helps the company to motivate employees to enhance their performance towards achieving overall organizational goals and objectives. Compensation provided by the company is externally competitive and internally equitable. All these are helpful for AT&T to reduce employee turnover rate and build a sustainable competitive advantage in the market. As per case study help experts,following are some ways that will be helpful for the company in order to enhance the current compensation philosophy for meeting company’s changing needs: Inclusion of Corporate and Cultural Values in Compensation Statement: In current business scenario, rapid changes can be seen in both organizational and employees’ needs. In order to meet these changing needs, it is necessary for AT&T to create a compensation statement, which describes the corporate and cultural values necessary to ensures future success. Further, it will be helpful for the company in order to align its strategic direction and compensation strategy (Tibergien & Pomering, 2005).

 

Team performance: As, the compensation philosophy of the company is based on individual performance; it should emphasize team performance as compared to individual performance to meet the changing business and employees’ needs. It should design incentives in a way that supports team approach and focus on building team environment (Tibergien & Pomering, 2005). It will be helpful for the company in order to produce innovative products with the team efforts. Further, it will be beneficial for meeting with the changing requirements of customers as well as attain growth in the market. Thus our case study helper says that the new compensation philosophy of AT&T will be based on different principles such as team performance, inclusion of corporate and culture values, performance based compensation, reorganization of individual skills, value business development, emphasize effective customer services and helpful to attract and retain employees.

 

Factors Influencing Compensation Management There are several internal and external factors, which have a significant impact on compensation management by the company. Internal factors are within the company, while external factors are outside the organization in order to influence compensation management. Some of internal and external factors are as below discussed but our business assignment help experts, which will contribute to the development of compensation philosophy: Company Culture: Company culture is an important factor that influences organizational compensation management. For example, if an organization has a performance-driven culture and high performance work systems, performance based pay is an essential component of its compensation philosophy. It is helpful for the development of compensation philosophy because through this employees can learn about the needs of the business and its implications of their pay or compensation (Werner, Schuler & Jackson, 2011). For example, if company has participative organization culture, employees can participate in different management activities and can know about the company’s expectations and can contribute positively in order to maximize both personal and organizational benefits.

 

Business Strategy: Company’s business strategy regarding wages has also an influence on its compensation system. For instance, if an organization wants rapid growth in the industry, it should set higher wages as compared to its competitors or vice versa (Kandula, 2006). In this concern, in order to improve growth, AT&T can link pay to achievement of growths as well as for improving customer services, the company can link pay to customer services. In this way, business strategy of the company will also be helpful to develop compensation philosophy. Financial Resources: Financial position of the company also influences compensation management. For example, a profitable organization can offer high compensation range as well as non financial rewards in order to attract and retain employees, while a loss making company cannot afford all these. AT&T is a profitable company and it has a better financial position in the industry. All these enable the company to offer both monetary and non-monetary rewards to its employees, executives and board of directors (AT&T Intellectual Property, 2013). In future, the financial position of the company will also help it to develop its compensation philosophy. Economic Conditions: It is one of the important external factors which will influence company’s compensation management.

 

If there is high demand for labor in the market, it will reduce the employee wages or vice versa. In addition, demand and supply for knowledge and skills also helps in determining employee compensation (Panchal, 2011). Inflation or cost of living is also considered as a primary factor while framing compensation philosophy (regarding basic pay). Industry Characteristics: It also influences organizational compensation philosophy. It is because due to shortage of skilled labor in the industry and rapid technological advancement, companies require to pay more wages to their employees in order to retain them and attain competitive advantage (Kandula, 2006). Thus, AT&T should consider this factor while designing a compensation philosophy in order to attain overall business objectives. Beside above factors, there are also other factors such as competition, labor market, globalization and legal aspects that are necessary to consider by the firm in order to develop a strong compensation philosophy.

 

Conclusion From the above discussion by our assignment help experts, it can be stated that compensation philosophy of AT&T is effective in order to attract, retain and motivate employees within the organization. Firm should include corporate and cultural values within its compensation statement in order to meet with organization and employees’ changing need. Compensation statement should also be based on team performance in order to achieve sustainable growth in the market. Along with this, there are different internal and external factors such as company culture, business strategy, financial resources, economic conditions and industry characteristics that will be helpful for the company to develop its compensation philosophy.

 

References AT&T Intellectual Property (2013). Retrieved from http://www.att.com/gen/press-room?pid=2684 Board Compensation Committee Report on Executive Compensation (n.d). Retrieved from http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=2853861-137314-149024&SessionID=crUVHWRH7jIjXR7 Bogardus, A. M. (2006). Human Resources JumpStart. USA: John Wiley & Sons. Kandula, S. S. (2006). Performance Management. USA: Person Education Inc. Panchal, G. (2011). Compensation Management: Recent Trend. International Journal of Research in Finance & Marketing, 1(5), 155-160. Tibergien, M. C. & Pomering, R. (2005). Practice Made Perfect: The Discipline of Business Management for Financial Advisers. USA: John Wiley & Sons. Werner, S., Schuler, R. and Jackson, S. (2011). Human Resource Management. USA: Cengage Learning. Get 100% original business case study assignment help services from our experts. We assure you that you will get authentic  content from our US and Australia assignment help experts.You can first check our assignment paper quality then you can confirm your assignment with us. We have more than 15 years experience of proving business assignment help to our US,UK and Australian students.