Compensation Plan Outline

Using the same company you researched in Assignment 1, evaluate the company?s compensation plan to determine how it could be improved.Write a six to eight (6-8) page paper in which you:Evaluate the existing compensation plan to determine if it is the most appropriate for your company. Explain your rationale.Determine the most beneficial ratio of internally consistent and market consistent compensation systems for the company you selected.Evaluate the current pay structure used by your company and assess the recognition of employee contributions.Make two (2) recommendations for improving the effectiveness of the discretionary benefits provided by the company you selected.Evaluate the types of employer-sponsored retirement plans and health insurance programs provided by the company you selected and compare them to that company?s major competitors.Use at least three (3) quality references. Note: Wikipedia and other websites do not qualify as academic resources.Your assignment must follow these formatting requirements:Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.Include a cover page containing the title of the assignment, the student?s name, the professor?s name, the course title, and the date. The cover page and the reference page are not included in the required page length.*Previous paper attached*

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Compensation Practice
Ashley Harper
Strayer University
Professor Fitzpatrick
BUS 409
January 28th, 2018.
Company Background
Samsung Electronics Co. Ltd is an electronics business conglomerate headquartered in
Suwon, South Korea. It is a division of the Samsung group that is made up of numerous
affiliated businesses under the Samsung brand. The Samsung group was established in 1938 by
Lee Byung-chul and diversified into several segments such as textiles, food processing, and
insurance. The Samsung Electronic division was founded in 1969 as a publicly trading company
being headed by Lee Kun Hee. Samsung has assembly plants in over 79 countries, and as per
2017, it has 308, 745 employees. It?s headed by Lee Kun-hee as the chairman, Lee Jae-yong as
the vice-chairman and Kwon Oh-hyun who doubles up as the CEO and the vice-chairman. The
majority of the consumers are familiar with the Samsung products, particularly Samsung
electronic products like cell phones, fridges, and television sets. With a huge international
presence, the company has an extremely diverse workforce of employees with different cultures,
values, and backgrounds. The high level of innovation in the manufacture of products such as
mobile phones is attributed to the diversity of the Samsung workforce and its success since
inception. Samsung Electronics is the company that I would like to work for, and therefore, this
paper aims to analyze the compensation practice in the company.
Compensation Strategy
The compensation strategy at Samsung is diversified with the main form being
remunerations that are based on positions and responsibility of the employees in the company.
Other forms of compensation entail non-financial incentives such as the flexible benefits scheme
that was launched in 2012 to retain talented employees. Since the company?s focus on innovation
runs through the organization and culture, engagement is the company?s primary objective aimed
at hiring and retaining employees in this highly competitive consumer electronics industry. The
introduction of flexible benefits plans integrated an online benefits portal that enables the
company to receive feedback from the employees about compensation. In 2014, Samsung
introduced new benefits that were intended to improve the employee healthcare and wellbeing.
This includes personal accidents insurance, season ticket loans, and discount dining card that
aimed to provide a widespread employee value proposition, an essential component of
Samsung?s benefits philosophy (Cornblatt et al., 2015).
Samsung has pension awareness communication scheme that enhances the staff
education, retirement fund, as well as improving the engagement with the benefits. For the
company to engage with the workforce that is too diverse, the human resource management
developed the ?pension champions,? centered on all the aspects of the workforce profile.
Currently, the benefits provided by Samsung include pension, healthcare and wellbeing, group
risk, wealth, lifestyle, holiday, and other benefits like birthday vouchers, and staff discount on
the company?s products. The healthcare and wellbeing benefits include dental insurance, eye
tests, health assessment, partner critical illness cover, and a discounted gym membership on
nearby gym location (Glassdoor, 2014). The group risk benefits include life assurance for staff
and partners and critical illness cover for staff and family. Wealth benefits entail pension and
annuity services, pension accident cover, independent mortgage advice, and independent
financial advice service. Lifestyle benefits provided by Samsung includes travel insurance,
tastecard, childcare vouchers, and Microsoft home usage packages. Lastly, the holiday benefits
are 25 days per year holiday and employees who have been with the company for more than ten
years get an extra day?s holiday for that year.
Compensation-related Challenges Facing Samsung
In spite of the introduction of the flexible benefits in 2014 that are meant to retain the top
talent at Samsung, the human resource is experiencing several challenges. In 2015, hundreds of
former workers of the electronics giant complained that the company had exposed them to toxic
chemicals that led to contracting of cancers. According to an advocacy group in South Korea,
more than seventy former employees died of cancer that was alleged to be contracted two
decades ago while working in the company. Like any business entity, the company denied
responsibility for these employees who were in the chip factories. Nonetheless, Samsung
admitted in 2015 that it did not put enough preventive measures to prevent the deaths and
illnesses of the employees at the Korean semiconductor factories. For this reason, it set aside
$85.8 million to compensate the affected workers after it was identified that the hazardous
working conditions were the cause of leukemia and other incurable conditions (Associated Press,
Another challenge facing this compensation strategy is dealing with diverse laws and
standards relating to labor. Samsung has many locations in different countries that have diverse
laws specifying the compensation requirement for the workers (ADAMS & HEYWOOD, 2011).
Therefore, the company is forced to compensate those working according to the labor laws
thereby affecting the compensation strategy put forth. For example, there are countries that
necessitate a company to pay the minimum wage of a certain figure and for Samsung to abide by
such laws, it has to pay.
Compensation performs an important role in hiring and retaining the human resource of
any company. The role of the human resource management is to ensure that the staff is well-
motivated by rolling out a compensation plan and benefits that march the duties and
responsibilities carried out. A poor compensation strategy results in loss of morale among the
staff and high turnover that in turn affects the production of the organization negatively.
Samsung being a publicly traded conglomerate must ensure that its employees are contented with
the compensation plan or else they will move to key competitors like Apple, Inc. Also, a satisfied
staff ensures that the level of innovation and productivity is high. For this case, one positive
compensation plan employed by Samsung is to ensure that they are satisfied with the flexible
benefits that have several packages (Jasper, 2011). The improved compensation plan ensures that
consumers are satisfied with the products of the company. As a giant in the consumer electronic
company, the company applies its compensation strategy to attract and maintain a talented
workforce. It understands the value of proper compensation that realizes the needs of the
employees. Samsung has benefits and incentive programs that touch on almost every aspect of
employees that includes education, health, housing, and pension plans. This is an inclusive
approach to compensation because it ensures that all the workers are well-maintained in all
aspects of life.
Nonetheless, this compensation plan based on salaries has its demerits to the
organization. Since this pay is given on a monthly basis, there is the possibility they some
workers are absent from work most days of the month but still get compensated. Also, it is not a
performance-related compensation plan that may lead to low productivity. Therefore, the human
resource management must ensure that it?s strict and vigilant when it comes to performance.
Low productivity and absenteeism must be shunned as they impact the productivity of the
organization and other employees as a whole (Jong-hwi, 2013). Second, the level of morale
among salaried employees is affected by this payment plan because they will feel that there is no
extra incentive provided for good performance. This results in average production from the staff.
Laws, Labor Unions, and Market Factors Affecting the Compensation Practices
Apart from the internal factors, there are several forces that impact the compensation
practices. These are external factors that include market conditions, regulations and labor unions.
Thus, a corporation has to understand these external forces before implementing a compensation
strategy. The reason for the formation of labor unions to ensure that its members are not
discriminated in any way in the workplace. Employees in a union stand up for improved pay and
other allowances like housing and health that are beyond the regular wages. Since inception,
Samsung has been against the unionization of its employees. However, in 2013, a group of
employees formed a labor union to demand increased pay. The union championed for proper
compensation according to the duties they performed. Such a factor forced Samsung to honor
their demand because they threatened an industrial action.
Another factor that companies need to consider is the market forces. It?s vital for a
corporation to determine a compensation plan based on the market forces. This entails the
growth of the industry and market and what competitors are paying for similar tasks. This will
ensure that the company hires and retains the top talent in the market. The consumer electronics
and technology industry depend on a high level of creativity and innovation (Jasper, 2011). Thus,
for Samsung to remain relevant and retain the top talent in the market, it rewards its employees
handsomely. A direct competitor like Apple, Inc. has a provides a compensation strategy that
Samsung needs to match to retain the top talent. An indirect competitor like Google that is
producing cells phones is also a market force that Samsung needs to consider. Google is not only
recognized for its novel technology but also its innovative compensation plan that has seen many
individuals dreaming to work. It offers discretionary benefits and services that are efficient and a
workplace that individuals can work and still have a social life because part-time work, flexible
work hours, and telecommuting for certain tasks allows their employees to have a social and
home life.
Lastly, labor regulations in a county affect the compensation strategy of a company as
they have to observe them. Companies with an international presence have to follow the labor
laws of the host country and abide by them to avoid labor litigations. Samsung corporation has a
global presence in 79 countries and for it to ensure successful operations, it has to follow these
laws. In foreign locations like China, Samsung has been accused of violation of human rights
such as child labor, low wages, working while standing for more than 12 hours, and unpaid
work. These illegal work practices were reported in 2012 by the China Labor Watch (Jong-hwi,
Effectiveness of Traditional Bases for Pay
One of the internal process that the management of Samsung ensures it remains effective
is the traditional base of pay. The process exists because workers receive an increase in the
wages according to the length of time that they have worked at Samsung. Secondly, top
employees are compensated as an appreciation for developing the skills in the company, and
therefore, the experience gained is valuable to the organization (Jasper, 2011). Lastly, the
traditional base for pay opens doors for transfer in case a promotion pops up. Samsung being
diverse demonstrates the effectiveness of the compensation plan as the company attracts top
talents from diverse cultures. Also, Samsung is not affected by high employee turnover as the
staff is satisfied with the workplace conditions. Employees are most valuable assets of Samsung
as they have enabled it to overcome competition from Apple. Therefore, this compensation plan
ensures productivity by eliminating the cost incurred as a result of high turnover.
WORKER EFFORT? The Manchester School, 79(3), 381-404.
Cornblatt, T., Erlandson, R., Fink, D., LaFata, R., Meredith, H., & Sevel, B. (2015). Workers’
compensation manual. Baltimore: MSBA.
Jasper, M. (2011). Workers’ compensation law. [Eagan, MN]: WEST/Thomson Reuters.
Jong-hwi, J. (2013). Samsung service workers form landmark labor union. Retrieved
6 February 2018, from
Samsung Electronics Salaries | (2014). Retrieved 6 February
2018, from
Samsung promises to compensate factory workers who suffered cancer. (2013). the Guardian.
Retrieved 6 February 2018, from

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