An organization’s mindset and objectives around employee compensation can

An organization’s mindset and objectives around employee compensation can be described as its compensation philosophy. This philosophy helps to attract, retain, motivate and engage employees in an organization.  It is one of the main reasons why a transparent statement about a company’s compensation philosophy is so important. The basic framework for consistency in compensation and reward structure can be identified by this formal compensation statement. Additionally, at a general level, the compensation philosophy can determine whether an organization will pay its employees at-market, below-market or above market wages. Factors included in a compensation philosophy are the company’s financial position, the size of the organization, the industry, business objectives, salary survey information, and the level of difficulty in finding qualified talent based on the economy, as well as the unique circumstances of the business (“Planning and Design,” 2015). Discretionary benefits can also be included in the compensation philosophy. Compensation packages play a vital role in the recruitment of top candidates. It is important for organizations to have targeted goals within the compensation philosophy that are aligned with the overall performance objectives of the company. Maersk uses a system of incentive pay arrangements for its Board of Directors and the management board that include short-term, long-term incentives as well as stock options. The incentive pay guidelines were designed “to secure a high degree of alignment of interests between the Company’s Management Board and the shareholders, to strengthen attraction/retention and to promote and support value creation both in the short and long-term (“Compensation,” n.d.). Maersk’s statement around compensation is transparent to its employees as is published as part of their general labor policy published on their company’s website.  To assist organizations in making informed decisions around compensation they may conduct a salary survey.Offering competitive salaries is essential for any organization to attract and retain employees. To help determine the appropriate salary for positions, companies can conduct salary surveys specific to the companies’ industries and market. According to Salary.com, more than 80 percent of business managers and HR professionals said their companies either participate in or purchase at least one salary survey each year. Companies with fewer than 500 employees spend an average of $2,000 annually on salary surveys, and companies with more than 5,000 employees spend up to $15,000 or more each year on these important data sources (Coleman, 2017.) Business managers have an opportunity to partner with their HR team to discover what other organizations similar in size and industry are paying for specific jobs. Salary comparisons should take into consideration job duties and responsibilities as well as skill sets, and education requirements needed for the job. Results of a salary survey can assist organizations in determining whether their salaries are competitive in their market.In addition to competitive salaries, employees value discretionary benefits packages. Benefits such as paid time off (sick, leave), retirement, health insurance coverage, vision/dental insurance and short/long term disability all help to contribute to the employee’s bottom line and lessen out-of-pocket expenses. In 2016, the Maersk Group launched a new maternity and paternity benefit for its employees.  The new benefit would allow employees, globally, a minimum of 18 weeks of maternity leave as well as one week of paternity leave. Lucien Alziari, head of HR Maersk Group, stated that the new policy strengthened staff retention efforts while reducing hiring costs and loss of productivity (Calnan, 2017). 

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