Recognizing Employee Contributions

Methods HR professionals can use to determine incentive pay 

It is important to analyze various incentive plan components so as to determine the strategies that will enhance the highest levels of performance in the company as it promotes the ethical behavior within the enterprise. Managers and the salespeople on the contrary not only work in hand with the customers but they are also responsible for the success of the company and therefore, the do everything possible for the company to meet its earnings targets. As a result, various methods can be used by the HR professionals to determine incentive pay in the firm such as linkage of incentive pay with the performance of the employees. The organization is required to set up a benchmark for the employees to have an organized team. If any case an employee works ahead of the benchmark, then the firm will have to provide incentives to the employees (Armstrong and Taylor, 2014). An example of incentives regards an increase in sales. It is noted that if the worker is helping the organization to increase its sales by more 5 percent compared to the last quarter, such employee will be provided with an incentive of 5 percent of the total amount of the sales that will be generated by such particular employee in the workplace. 

Another technique of determining incentive pay is by way of assessing the impacts of the decision of the managers. If the director of the company makes a decision that will be of impact to the organization, it will be positive for the enterprise to ensure that it gets a higher level of profit leading to the expansion and success as compared to other businesses (Ulrich, 2013). The way of determining impacts of the decision of the managers is also applicable for determining incentive pay as the company would be paying incentive only at the time when the company gets a lot of profit. 

Legal requirements for Employee Benefits 

Several benefits are paramount by the law involving an addition to the cost of compensating employees. Therefore, the company looking forward to the best techniques to control staffing costs may look for best basic methods of the workforce to reduce the expenses of benefits to the enterprise. It may require an extra time instead of employing more workers, hire part-time employees rather than full-time since the part-time employees need much smaller benefits packages. Also, they use independent contractors instead of hiring more employees. Some of the choices are limited by the legal requirements, for instance, Fair Labor Standards Act that needs beyond the regular time payment for the nonexempt employees (Steger and Dik, 2010). Another board that limits the definition of independent contractors is the Internal Revenues Service. It makes the employee avoid the obligations through classifying them as self-employed when the company receives the benefits of a permanent employee. There are other legal requirements such as tax treatment of advantages, antidiscrimination laws and accounting for benefits. 

Tax treatment of business is a modern and flexible plan that provides some potential tax merits to the employees and employers. On the contrary, employees are accommodating benefit plan that enables them to choose and change some of the existing benefits or the purchase benefits from the menu of options. Overpayments of employees spending the allowances are regularly collected through gross salary adjustments. If the employees exchange salary for tax-exempt benefits such as pensions and childcare vouchers, they will not pay the tax or National Insurance on the payment already exchanged (Alexander, 2011). It is evident that employees can still trade salary for their bosses provided that their business advantages are availed, and there will be income tax charged. Employers who take part in the flexible benefits plan do not pay employer's National Insurance on payment of excepted benefits. Another legal requirement for employee benefits is antidiscrimination laws that entail legal treatment of both men and women such as equal access to the benefits. The organization will therefore not use the worker's gender as a fundamental for providing more limited benefits. It is an important rationale for the Pregnancy Discrimination Act that requires that each and every manager should take care of the pregnancy, give the employees time to get out of such situations related to pregnancy and childbirth. Another important field of concerns in the treatment of male and female employees is the pension benefits. Most importantly, the life span of women is much longer than that of men and therefore, retirement benefits for the women employees should be more expensive than that of men. Most of the firms today have made assumptions that female employees add a lot to the growth and development of the company as compared to that of men. 

The legally mandated benefits that the company must currently offer to its employees 

Employee benefits perform an essential role in the lives of the workers and their family members. Therefore, the benefits provided can act as the deciding factors for the employee's decisions to perform their work in the business. There are two various types of employee benefits such as those that the employer release by the law and those that the employer must offer an opinion to cater for the employees. Social Security and worker's compensation is also an example of required benefits. Other optional benefits include health care insurance coverage and retirement benefits (Reiser, 2011). The two benefits have legal and tax complications for the employers. The following are the benefits required by the law; 

Work Compensation 

It is typically offered to the employees who become either sick or injured at work. It is different in every nation and is regularly provided at the state level. 

Unemployment Insurance 

This type of insurance usually provides compensation to the workers who lose their work frequently without their fault. It is not similar to every nation and is regulated at state level. 

Social Security Taxes 

Social Security Taxes are usually expected to be paid to the employees. The current rate of the Social Security tax is 6.2% that is required for every employer and employee to pay. It also includes additional 1.45% for the medicine tax. 

Family and Medical Leave 

Typically, this type of required benefits does confuse several employees. The Family and Medical Leave Act require that the employer should give a 12 week of unpaid time off to the workers during the 12 month period. Employees are usually protected from losing their job to take care of themselves or the immediate family members including during birth. 

Consolidated Omnibus Budget Reconciliation Act Benefits 

COBRA benefits are often required for the employer with not less than twenty workers subjected to this act. It does allow the workers to keep their insurance coverage at the employer's group rates for the duration of three years. The coverage is usually applicable even to the former employees, spouse and free children and retirees. 

Essential concepts that a company must consider when designing benefit plans 

There are various ideas that the business has to put into consideration when making a benefit plan. Prioritizing the benefit option is one of the important concepts. It is recommended that before designing a benefit plan, you have to proactively survey the market and the market need so as to realize what kinds of benefits are necessary. Another factor to consider is long term needs. It is paramount to analyze not only the short term needs but also the long-term needs. Also, you are required to talk to your brokers and do some consultations for them. It will make you aware of the trend in the market; do your research on what the customer’s want after which you will develop a three-year-old plan looking at the important issues that could be leading the costs and health of the workers to anticipate trends. The third factor that has to be considered when designing a benefit plan is the communication considerations (Casadesus and Ricart, 2010). Through this factor, it will be imperative to putting under consideration the psychology when selecting and communicating benefits to the workers. It is evident that how you will handle communication have an intrinsic impact on employee's morale and allowances participation. 

The efficiency of the techniques for effectively communicating compensation and benefit plans to employees 

Through the benefits technology, the process has been made possible. Though aggregating all the available benefits data on the platform, you can generate a full compensation statement that every worker can sign on to check at any time in the year (Bell and Martin, 2012).). The following are some of the techniques to effectively communicate the benefits of the technology platform to both the current and the future workers; 

Give detailed information concerning the benefits to every employee 

For you to get the best out of a total compensation campaign, it is very imperative to communicate to every employee within the company concerning what the organization is providing to them. While there are additional benefits rendered to the sales, the executives and other noble employees, it is critical to note check on the profits offered to every individual in the company. 

Give an exact amount for the benefits 

Most of the employees tend to overlook the quality and quantity of the advantages like company-sponsored life insurance, retirement contributions and also the expense remuneration. It is an essential to include the benefits on the total compensation statement so that the workers can realize the value of working in a particular firm. 

Incorporate intangible advantages in the statement 

With the financial incentives, the company is likely to give a range of intangibles which are very hectic to monetize. Such components play a significant role in the compensation strategy. You should, therefore, include wellness, special discounts, and training development. Also, you should incorporate flexible scheduling and the work-life balance in your statement so as to have a have a better benefit plan in your company. 

Constant Supply of your Summary of Benefits 

For the employer to establish a total compensation communication program, he should make a strict schedule distribution of the printer or other electronic statements. The total compensation statement should be timed so as to avoid delays in delivery when they apply to the employees. 

Incorporate an outline of the benefits on the Company website 

When you communicate the benefits to the prospective candidates and other new hires, you are recommended to take your time to develop a summary of the advantages that are exhibiting the career portal. Design your benefits summary excluding you corporate mission and culture. 

Ethical risks of making incentive pay a significant portion of employees' total compensation 

One of the ethical risks of making incentive pay a bigger part of the employee's total compensation is the executive inflating stock that is based on the motivation being off of a particular stock performance. The interested parties can be dishonest concerning the actual earnings of their firms thus making the stoic look like a hefty investment for the customers. Another ethical risk is setting the performance measures (Faulkender et al., 2011). It is noted that if the workers receive incentives for completing in an accurate time, the workers could quickly go through the jobs in a poor manner to receive incentives. It will thus reduce the company's reputation and also cost the company for the poor work that has been done. Several measures can be used to reduce the risks with performance measures such as carrying out random check up on the employee's performance are not motivated. 

Recommendations for ways the company might mitigate or reduce these risks 

In conclusion, the HR managers and organizations are encouraged to do everything possible always to keep their employees alongside benefits and the compensation summing up to the high total benefits packages. The incentive pay should always be ethically mandated and also based on the firm's resources that can be allocated before planning is done so as to make sure that the unethical activities such as stock performance do not exist. Also, the conveyance is one of the most important elements in a successful company such as the retail companies. When starting the business, a communication standard should be set and always inform the employees in advance before the date of the activity. Also, is there are some changes such as compensation changes, it should be communicated to the employees to avoid confusion that might occur among the workers and other subordinate members of the company. Through the illustrated elements, the company will always meet the required goals and will always be one of the best companies among others. 

References 

Alexander, K., & Alexander, M. D. (2011). American public school law . New York: Cengage Learning. 

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice . London: Kogan Page Publishers. 

Bell, R. L., & Martin, J. S. (2012). The relevance of scientific management and equity theory in everyday managerial communication situations. Journal of Management Policy and Practice , 13 (3), 106-115. 

Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long range planning , 43 (2), 195-215. 

Faulkender, M., Kadyrzhanova, D., Prabhala, N., & Senbet, L. (2010). Executive compensation: An overview of research on corporate practices and proposed reforms. Journal of Applied Corporate Finance , 22 (1), 107-118. 

Reiser, D. B. (2011). Benefit Corporations-A Sustainable Form of Organization. Wake Forest L. Rev. , 46 , 591. 

Steger, M. F., & Dik, B. J. (2010). Work as meaning: Individual and organizational benefits of engaging in meaningful work. Boston, Mass: Harvard Business Press. 

Ulrich, D. (2013). Human resource champions: The next agenda for adding value and delivering results . Boston, Mass: Harvard Business Press.