The “A.P. Moller-Maersk Group” is a company that was founded in 1904 as a shipping company by “Arnold Peter Moller and his father, Captain Peter Maersk Moller” (Groysberg & Abbott, 2012). The company is headquartered in Copenhagen, and by 2012, it was rated the largest company in Denmark with close to 110,000 employees and operations in 130 nations. Maersk consisted of 1,000 companies and functioned as one of the largest businesses of container business worldwide as well as gas and oil container terminals and exploration operations. The company transitioned from a family company to a publicly traded company in 1982. On this background, this paper focuses on discussing employees’ compensation regarding Maersk compensation policy, salary survey values to a company, and discretionary benefits advantages to Maersk.
Compensation: Maersk’s Philosophy
According to Sarfin (2018), a compensation philosophy refers to a formal statement which documents the position of a company concerning how employees are compensated. It explains the reason behind the employee pay and creates a consistency framework. Employers utilize their policy of compensation to retain, motivate and attract employees. The philosophy is prepared by HR department and is based on various factors including the financial position of a company, the organization's size, business objectives, and information of market salary among others (Sarfin, 2018). In this case, the compensation philosophy of Maersk is based on the performance of employees as Groysberg and Abbott (2012) explain.
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This means that its philosophy is more focused on how workers perform. Market conditions influence this philosophy of compensation in various ways. For instance, conditions of the market may make it hard to find qualified people in a specific specialization and therefore, the employer may be required to pay a premium for such candidates (Society for Human Resource Management, 2018).
The Value of Salary Surveys to an Organization
Salary surveys refer to a standard technique of accessing what other companies are paying their employees for a particular job class or job. These surveys most times collect information regarding compensation, bonuses, benefits, and salaries (Brown, 2017). Using salary surveys may be of significant value to organizations because of, first, as a leader of a human resource in an organization, being aware of the market of employment and what is going on with wages is crucial to stay competitive with peers.
For companies to maintain that competitive edge, HR professionals require to have market data that is most recently available to be able to be in a position to compare employees accurately to the local market of employment (Brown, 2017). As a result, keeping the market competition is vital for any organization to either to attract and keep top talents or hire new talents. This is because sources of salary survey for the use by HR is key to vying for great employees as well as providing HRs with information on employment market changes, thus, allowing for pay adjustments accordingly (Brown, 2017).
Advantages of Discretionary Benefits to Maersk
Discretionary benefits include those benefits which are neither regulated nor required by law for employers to offer. They include health insurance for workers and their family such as physical and mental health, prescription drugs, vision and dental insurance, pension plan, and help with paying for the care of child among others. They also include paid personal or vacation days, paternity or maternity leave (Martin, 2017). In this context, Maersk is an international company and it is using discretionary benefits to assist in building positive relationships with employees and raising their morale to increase their productivity (Groysberg & Abbott, 2012).
Conclusion
From the above discussion, it is evident that compensation philosophy is very essential for organizations as it defines how employees are compensated and as such, retain, attract and motivate employees. Similarly, salary surveys are also important to companies as it provides market information that helps a company to stay at a competitive edge with its peers as well as assisting the organization's HR to retain or attract and recruit potential employees. Finally, organizations should keep in mind discretionary benefits because they are among the factors which competent employees may use to compare the employability of various companies.
References
Brown, S. (2017). Five reasons you need a salary survey. Pearl Meyer . Retrieved August 8, 2018, from https://www.pearlmeyer.com/five-reasons-you-need-salary-survey.pdf
Groysberg, B. O. R. I. S., & Abbott, S. (2012). AP møller-maersk group: Evaluating strategic talent management initiatives. Harvard Business School Case .
Martin, M. J. (2017, September 26). The Advantages of Discretionary Employee Benefits. Bizfluent . Retrieved August 8, 2018. from https://bizfluent.com/info-10004508-advantages-discretionary-employee-benefits.html
Sarfin, R. L. (2018). Compensation Philosophy Examples. Chron . Retrieved August 8, 2018, from https://smallbusiness.chron.com/compensation-philosophy-examples-14059.html
Society for Human Resource Management (2018). Planning and Design: What is a compensation philosophy? What should be included in a compensation philosophy? Retrieved August 8, 2018. from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/compensationphilosophy.aspx
