Attracting and retaining the most talented employees is essential for long-term organizational success. An
important component to attracting and retaining such employees is the design and implementation of an
effective compensation and benefit system.
Assume the role of a highly regarded human resource consultant hired to review, analyze, and
revise the compensation and benefit system utilized by your city’s largest employer, Holland Enterprises. The firm employs 3,500 employees, but since 2010 has lost 25% of its staff. Exit interviews indicate the primary reason a majority of these employees have resigned is because of a compensation and benefit system that is perceived to be unfair and uncompetitive in the marketplace.
Present to the management a revised compensation and benefit strategy. Your proposal should include:
Description of how an effective compensation and benefit system contributes to organizational
effectiveness.
Explanation of the principle components of your revised compensation and benefit system for a large-
scale organization as well as a recommendation for each component.
Provision of a clear and convincing argument to the already skeptical top managers of this organization to
increase their compensation and benefit expenses.
At a minimum, your compensation and benefit system would include the following components:
Compensation and benefit philosophy
Pay structure architecture (pay grades, pay ranges, and pay width)
Ratio of base pay to incentive (bonus) pay
Emphases on external equity or internal equity
Principle type of benefits to include (example: deferred compensation match, health insurance, vacation
and sick leave, etc.)
Sample Solution
