5-3 Final Project OL 211 PDF

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Linda Robertson OL 211: Human Resources Management Southern New Hampshire University November 29, 2020

5-5 Final Project: Milestone Four The compensation philosophy of Maersk is that they bring together their human resources and the line of managers that provides a guideline to employee compensation but makes sure to represent the commitment to their employees and how they value each employee. “The compensation policy describes the details of the compensation components in the organization, how they are used and the conditions for the employees as the compensation component can be applied in their specific situation.” (HRM Handbook, 2020). Maersk uses the Danish Companies Act to help them make agreements, policies, incentives and benefits of its employees. The compensation philosophy of Maersk is compromised of multiple moving parts that include short- and long-term incentives, discretionary benefits, stocks and the remuneration of the management board. Maersk has also, according to the case study implemented a “pay for performance testament” that gives its employees yearly bonuses based on performances. This has helped Maersk develop their philosophy when it comes to compensation. Maersk’s philosophy and the remuneration of the management board allows its members to be paid by fixed based salaries. With this the members of the board are made eligible to receive incentive compensation, and this can motivate each

member to perform at higher rates within Maersk. Maersk’s compensation philosophy is also influenced by the market, so their philosophy changes as the market value changes as does everything within Maersk. Change allows for Maersk so adjust their benefits as well as incentives to help retain their current employees while also attracting new employees. Salary surveys are used for many different reasons and can be extremely valuable to a company. Salary surveys are valuable because the ensure that the company can stay competitive, HR professionals should be ready and aware for any changes within the employment market, as this will allow them to adjust certain pay levels for the skills that either are no longer in demand or becoming more popular and can become harder to fill. Having regular reviews with salary surveys, an organization like Maersk can identify discrepancies in the pay before it’s too late. Legal compliance is valuable to salary surveys and to an organization. Consistent participation is salary surveys can ensure that an organization is compliance and not at risk for “price fixing”, which is an agreement among competitors that raises, lowers, or stabilizes prices on competitive terms. Salary surveys also protect any investment an organization, which can be their employees. Salary surveys can also assist an organization with any decisions they may need to make. Using salary surveys regularly can allow a company to form its compensation strategies as well as form plans that are internally and externally competitive and equal. Discretionary benefits are benefits that are not necessitated by law. They can be beneficial to organizations when trying to obtain talent. With Maersk discretionary benefits can have that same effect, Maersk wants to keep its employees productive and happy, they want long-term employees so they will have to provide benefits that aren’t necessarily required. Maersk offers benefits like paid time off for vacation, sick leave and bereavement, as well as education assistance, and childcare. Having benefits like this can allow Maersk to stand out from

the rest. Maersk offering these types of benefits can also ensure that their employees are able to have a life outside of work with compensation. Not very many companies offer the same discretionary benefits as Maersk does and this can help catapult them and allows them to be more competitive and sought out by future employees. Childcare and educational assistance are important to many working families, those with children really appreciate an organization that can empathize with them when it comes to parenting and many working adults are continuing their education and would really like the assistance with continuing that education. Discretionary benefits are made available as a means to help retain employees, Maersk values their employees and wants to prevent them from leaving, but by offering benefits like these to employees can ensure that Maersk doesn’t lose out on its talent.

Reference:

HRM Handbook. (2020, September 7). Compensation Policy. https://hrmhandbook.com/hrp/compben/compensation-policy/#:%7E:text=The %20compensation%20policy%20provides%20the,salaries%20of%20the%20individual %20employees.

Snell, S., Morris, S., & Bohlander, G. W. (2015). Managing Human Resources (17th ed.) [Ebook]. Cengage Learning. https://ng.cengage.com/static/nb/ui/evo/index.html? deploymentId=48845323535012744196703717175&dockAppUid=16&eISBN=9781285 872674&id=993395464&nbId=2084380&snapshotId=2084380&...