Analysis of Wal-Mart Store Manager Compensation, Incentives and Benefit Plan Essay
The store managers in Wal-Mart receive a fixed salary and incentives on an annual basis based on the performance of the store at the end of the company year. The benefits given to the store managers are in accordance with mandated laws such as paid sick leaves, vacation leaves, and medical insurance and retirement packages. The compensation, incentives and benefits of store managers appear to be substantial but needs to be enhanced in order to increase motivation and employee retention.
Store managers are young professionals who have competitive qualifications and the danger of turnover is very real especially if other companies offer them a more attractive compensation plan. Recommendations Motivating employees to increase productivity and prevent turnover can be done through an attractive compensation and benefits program. According to Maslow’s hierarchy of needs, one must resolve the lower level needs before going to the higher needs such as self-actualization (Aamodt, 2003). It is also evident that younger workers are in the process of fulfilling their basic needs such as security and belongingness needs.
Having a well paying job gives young store managers the security they need to build their own life, while having money at this age gives the store manager a
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Developing an attractive compensation and benefits program would not lead to satisfaction but it would at least prevent dissatisfaction and turnover. Compensation, Incentives and Benefits Plan Compensation The fixed monthly salary of the store managers is not very competitive, some companies offer a higher salary and Wal-Mart should look into the possibility of increasing the amount of the fixed monthly salary. Increasing the store managers salaries would encourage employee retention because it will be competitive compared to other companies (Rynes, Gerhart & Minette, 2004). Find Pay for performance examples
Incentives The company should use flexible pay rate incentives for the store managers on a quarterly schedule rather annually. When the incentives are quarterly, the store managers would have a realistic time frame in which to increase productivity and performance. Moreover, the reward would be readily attained rather than wait for a whole year to receive it (Rynes, Gerhart & Parks, 2005). By being flexible, it would mean that the incentives would be based on a given criteria and the amount received would be based on the given criteria.
This would increase the motivation of store managers to work well since he/she has a reward at the end, and it would not result to discontent since a given amount of work is still rewarded. The store manager has the freedom to choose whether to work more and receive more incentives or to work less and receive fewer incentives. Benefits In addition to the benefits plan of the store managers, provisions for professional growth should also be included. Young professionals feel the need to grow and learn more about their jobs and functions and attending seminars, conferences and going to school answers these needs.
The store managers would likely value this benefit and would feel indebted to the company and inspire retention. The company could pay for the registration fees for seminars and workshops, shoulder travel expenses; it could also pay for the tuition fees of an employee pursuing a master’s degree. In order to protect the company’s interests store managers should be made to agree to a contract wherein they have to render return service for the educational benefits they availed (Benson, Finegold & Mohrman, 2004). References Aamodt, M. (2003). Applied Industrial/Organizational Psychology 4th ed.
Boston: Thompson/ Wadsworth Publishers. Benson, G. S. , Finegold, D. & Mohrman, S. A. (2004). You paid for the skills, now keep them: Tuition reimbursement and voluntary turnover. Academy of Management Journal, 47: 315-331. Rynes, S. L. , Gerhart, B. , & Minette, K. A. (2004). The importance of pay in employee motivation: Discrepancies between what people say and what people do. Human Resource Management, 43: 381-394. Rynes, S. L. , Gerhart, B. , & Parks, L. (2005). Personnel psychology: Performance evaluation and pay for performance. Annual Review of Psychology, 56: 571-600.