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Compensation and Benefit Plan

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Compensation and Benefits Plan Based on the job analysis performed previously by Team B for the program manager position, the success of the new engine program would bring in a big jump in sales for the company. Thus, the program manager position is important to ensure a quality completion of the program. Keys to successful compensation and benefits plan are to provide fair compensation to attract and retain employees and to align with the company’s strategic goals. The proposal for the compensation and benefit plan for the program manager is competitively based on U.S. national averages in aerospace industry, company size, education, and experience. The base salary range is formulated by using the Formal Salary Structures (Culpepper and Associates, 2010). They are consistent with aerospace industry standards. The proposed base salary range is between 25% -75% companies offer in accordance to Salary.com. The plan includes benefits that are consistent with company budgeting plan and strategic plan. The compensation and benefit plan is as followings.
Salary:
The base salary shall be in the range $126, 396 - $154,343. The salary range shall reflect an employee’s work experience, education, and skills as a mid-level program manager. The range is corresponding to the company’s pay grade PM-9 to PM-12. Annually, management will review the employee’s overall individual performance and job responsibilities to make any salary adjustments as necessary.
Benefits: All employees are eligible to participate company-offered benefit plans on the first day of employment. The cost for the benefits is company-subsidized and pre-tax dollars. Benefits are including but not limiting to the following:
Health Benefits: The company offers flexible, comprehensive medical, dental and vision plans that allow employees to customize to meet their needs. Employees and their immediate family members are eligible for 100% preventive care coverage. In addition, the benefit includes Health Care and Dependent Care Reimbursement Accounts that allow employees to pay eligible medical and child-care expenses with pre-tax dollars. Another health benefit is a Wellness Program in which the company reimburses the cost limited at $300 yearly for any activities involving in health club membership and exercise equipment.
Insurance Benefits: The company offers various insurance plans: Basic Life Insurance, Supplemental Life Insurance, Basic AD&D, and Supplemental AD&D Insurance. The insurance is payable in the event of employees death or injury from any cause, at any time or place, while employees are insured. Payment will be made in a lump sum or in installments to the beneficiary, as designated by employees. For disability insurance, the company will offer to the disabled employee 80% of the pay for a maximum of twenty-four months.
Savings and Retirement benefit: The company offers 401K plan which company matches fifty cents to a dollar of employee contribution. The employee contribution is pre-tax and up to maximum 20% per pay period.
Employee Stock Purchase Plan: It is offered to all employees. Employees can purchase company stock at 85% of the market price. However, the purchased stocks must be vested for at least six months.
Paid Time Off Plan: The company recognizes that employees need personal time away from work. So, the company offers generous paid holidays, sick leave, personal leave, and vacations in line with aerospace industry standards. Vacation is based on years of service at the company. Vacation accrual shall be at maximum 120 hours. After which, the vacation accrual will stop:
Vacation days accrued Years in service
14 0-5
21 6-15
28 >15 The company pays employees for all major holidays like President’s day, Memorial day, Independence day, Easter, Thanksgiving, Christmas Eve, New Year’s day and others. Sick and personal leaves are also provided to all employees as needed. However, the allowance of these types of paid time off is subject to manager’s discretion.
Education Tuition Reimbursement Program: The purpose of this program is to encourage employees to develop additional skills and engage in personal development and lifelong learning. The program covers eligible expenses up to 90% for educational courses in any field of study at company approved accredited educational institutions. Participants must be pre-approved by management prior to enrolling in the program. The percentage reimbursement is in accordance with the course grade.
Employee Assistance Program: This program is offered to employees and their immediate family members. It is designed to offer benefits and tools to help manage many of life’s challenges free of charge. The program provides employees and their family members 24/7 service access to professional help including life coach, psychological or legal services for a wide range of issues; including personal finance, parenting, elder care, education, health, work, emotional well-being, and more.
Group Auto and Home Insurance: The company offers these types of insurance policies at special group rates and discounts for automobiles, homes, renter, condominium, and recreational vehicles.
Profit Sharing Plan: Employees are eligible for profit sharing. It is an incentive plan in which a portion of the company’s pre-tax profits will be paid out annually to employees by the percentage of employee salary or wage once company reaches forecasted profit goals. The profit sharing is pro-rated if employees do not have a full year of employment with the company.
Other benefits: The company offers employees discount price for travel, computer, and cell phone subscription purchases. Other benefits that can be provided as applicable are flexible work schedule and telecommuting. Although we believe the proposal for this compensation and benefit package for program manager position is well-compensated, we anticipate some obstacles if this is to be implemented. One of them is the pay base. The pay base is under the assumption that the program manager will perform and deliver positive results. So, should the performance yield negative results, the company will be at the loss. In addition, with this pay base structure, the program manager would not ever expect a pay cut but maintain the pay level at the minimum and thus, cease to be motivated to perform better in the job. Another obstacle is the employees may feel that the compensation plan is under-valued or not well-rounded to meet their needs and that the company is not flexible enough to accommodate employees. Employees either stop performing at a high level or begin to look for employment from outside. Thus, the risk of losing a talented employee from the position is a possibility. Overall, we propose a compensation and benefit plan for the program manager at an aerospace company. The compensation and benefit plan is developed in accordance to national industry standards and company’s plan. The package is competitive and incentive, yet in alignment with company’s budget and strategic goal. However, HR or management needs to communicate clearly about the compensation and benefit plan with the employees and that they must understand what employees are looking for and be flexible as possible to allow employees make the balance between life and work. If the company makes an effort to meet employees’ needs, it would reap high productivity and positive work results from its employees. With that, the compensation and benefit plan needs to be attractive enough to attract and retain talent for the program manager position. It provides what employees need and motivates them to produce at the maximum level. The compensation and benefit plan needs regular review and adjustment to be competitive with other companies and benefit employees and their company.

REFERENCES
Culpepper and Associates. (2010). Salary Structures: Creating Competitive and Equitable Pay Levels. Retrieved from http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/SalaryStructures.aspx
Program Manager. Retrieved from http://swz.salary.com/SalaryWizard/Program-Manager-Salary-Details-Burnsville-MN.aspx…...

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