IntroductionDue to shortage of qualified employees in the local labor market and increasing turnover within the Joint Automotive Corporation (JAC), the top managers of JAC will propose a comprehensive and progressive compensation and benefits plan to the Chairman, in order to increase retention in the Company. Traditionally JAC-POWER group was one of the most attractive companies to work at, and the salaries level was above the market, but due to the inefficiency of the payroll system and inadequate understanding of the Human Resources function, JAC is paying only minimum wage and mandatory benefits. The following paper will propose the costs of the plan, external and internal equity, and creative methods of compensation and voluntary benefits for JAC.
Cost of PlanIn order to address the issues of retention at JAC, we must first look at cost: are we spending too much, or are we not spending enough in addressing the compensation and benefits needs of our employees.
We plan to look at the following areas to see how cost will affect our bottom line in profits; current benefits plan vs. optimal benefits package, incentive programs such as bonuses and profit sharing, and a need of routine job evaluations to reflect current trends in compensation factors, ranking, and pay grades. Suggested HR department will be responsible for providing the initial data to support our claim, that we are not doing enough retain our employees, thereby we have incurred a high turnover rate. Currently, JAC believes that the market, overall profit of the company, and new business opportunity will drive the cost of change in these areas. Clear understanding of the importance of establishing of the HR function will lead to overall employee satisfaction and corporate improvement which will lead to higher profits.
External and Internal EquityAs a growing organization in automotive industry...