Problems and recommendations for Merit Pay system at Konica Minolta Essay

Problems and recommendations for Merit Pay system at Konica Minolta Business Solutions - Essay Example The project provides examples of the compensation structures in other organisations providing the respective pros and cons of the same. Finally, it recommends a suitable compensation structure for Konica Minolta Business Solutions along with its probable impact on the organisation. Compensation structure in Wal-Mart The organisation chosen for the purpose of this research is Wal-Mart. The reason for choosing this company is that it would be a perfect example to show how a poor compensation structure could lead to serious damage for the organisations. It would also be possible to show how restructuring of the pay structure would benefit the employees and the organisation. The organisation is one of the retail giants in the world. However, the compensation structure is seen to be unfavorable for the employees. Research revealed that â€Å"Walmart CEO's hourly wage equals one year salary of new employees† (Brainz, 2010). It demonstrates a great extent of disparity among employees in the organization. It was seen that the CEO of the company earns an amount of $35 every year, which is an hourly earnings of $16,826.92. On the other hand, the newly employed worker earns only $8.75 in an hour. His gross income in a year amounts to $13,650 only. The figure is quite low for a newly recruited employee in comparison to the revenue that the company generates. It also reflects the lack of concern of the employer towards its employees. This is the cause of the high rate of attrition in the organisation. According to the reports published by the company, it was estimated that there were 74,300 workers occupying positions in Florida Wal-Mart in a quarter. The number of workers leaving the organisation in the next quarter amounted to 15,500. 2900 more number of workers was recruited. This represented that the quarterly rate of turnover was as high as 17.3%. It was estimated that if this figure remained unchanged then out of every six recruitment, one would leave the organ isation in every three months (WARN, 2005). Compensation in other organisations- Review of success and failure Proctor and Gamble was one company which was considered to be one of the most favorable companies to work for. The company demonstrates very low rate of attrition because of its favorable pay structure. The voluntary turnover rate in the company is only 2% per year. The popularity of the organisation gets depicted from the fact that it receives more than 125,432 US applicants every year (CNN Money, 2011). The company’s present human resource development structure is highly attractive which makes it one of the most employers of recent times. The average annual pay for the most common salaried job in the organisation is $87,000, while the average hourly payment for the most common hourly paid job is $48,673. For example, a person holding the managerial position in the production department gets an average annual salary of $87,000. On the other hand, a technician whose wage is calculated on an hourly basis gets an average annual payment of $48,673 (CNN Money, 2011). The figures demonstrate that the employees are adequately compensated which can be accounted for