Benefit and Compensation

This company is a commercial contractor with annual revenue between 10-20 million dollars (PC One Source Contracting, 2013). According to their website, PC begins part-time general laborers at $10. 50 per hour (www. Vociferousness. Com). They offer medical benefits, vacation pay, and merit increases for full time employees. Management and project leaders are also offered a car allowance, and retirement plans (www. Vociferousness. Com). Bellow Disaster Restoration is an international commercial construction company with operations in both Michigan and Arizona.Bellow currently creates approximately $20 million in revenue within the Detroit area (Bellow Property Restoration, 2013). They offer pay structures (depending on position) within both markets averaging from minimum wage to $1 00,000 per year (Bellow Group Salaries, 2014). They offer incentive programs for early completion of projects, bonuses for exceeding sales goals, and merit increases for exceeding performance or promotions. In addition, Bellow offers medical benefits, accrued paid time off, paid sick leave, retirement plans, and car allowance and travel expense reimbursement for applicable employees (Bellow Group Salaries, 2014).According to Glissando. Com, the national average wage for commercial contractors (not including additional benefits in a total compensation package) is $65,239 (Salary: Contractor, 2014). In both markets, competitors of similar size are offering wages between minimum and approximately $100,000 per year (dependent on position). Competitors also offer compensation packages with merit increases, health insurance, paid vacations, productivity incentives, retirement plans, and are within the national average compensation of $65,239 for commercial construction contractors.This market survey and evaluation will allow Clayton Commercial Construction to better prepare a competitive and relevant compensation package for employees of the Detroit, Michigan and Arizona operations. Compens ation Structure and Position in Market Since the company wants to be comparable to other construction companies it is easier to determine the pay structure that can be used for the company. This can be achieved by using the practice of benchmarking. This can be done one of two ways.The company can take a direct approach, go around to different companies in Arizona, and see if their human resources department will give them a look at how theirs works. Another way to benchmark would be to use the internet job boards to see what current salaries in the area are going for. The best recommendation would be to grade each job on a points scale to decide difficulty and importance. From there decide which jobs have an average salary and which ones should have a pay scale based on time in service and skill level.From there the company can identify how many positions for each job title the will have and can factor in the projected payroll of the company against the projected gross value. This will allow for growth within the company as well staying competitive with other companies. For the expansion to Arizona, the company will have to look at trying to undercut prices Of competitors. The positioning will be weak and should look to specialize in smaller jobs. According to central. Com (2014) the top 10 companies billing is from $500 million to $47 million.This company currently nets about 20% of the tenth ranked company's billing amount. Positioning themselves as a smaller company that offers a more intimate experience is the marketing strategy to go with. People like to do business with companies that give the impression of personal touch. Bigger companies can lose this eel and open the door for other businesses. This is where Clayton Commercial can really make their money. Compensation and Benefits Strategy Expanding into a new market presents many challenges, but perhaps the most critical element is recruiting excellent talent in the new market to ensure successful gr owth.Ensuring that Clayton Commercial Construction is attractive to potential hires is the key goal behind designing a competitive compensation and benefits strategy. Our recommendation for Clayton is to provide a wide variety of options to employees and then allowing them to hose the benefits they want to pay for. We recommend assigning costs to each benefit, and we will provide employees with a budget of â€Å"Benefit Dollars† to spend on the benefits they care about most. Employees may go over these â€Å"benefit dollar† budgets, but they will be responsible for extra expenses beyond their budget.We recommend allotting employees 20% of their annual base salary in â€Å"benefit dollars† to spend how they choose, and then charging employees based on the benefits they take. This cafeteria-style approach will allow Clayton to save money by not paying for benefits that are r low extreme flexibility to Clayton employees. It will also reinforce with the employees of Clayton just how much these benefits cost much off benefit the company is paying for. Morale and employ appreciation will be higher and employees will be less likely to tall benefits packages for granted.Regarding compensation, we erect Clayton utilize market research to set and maintain comparable Our preliminary research indicates that in Arizona, a typical front construction worker earns roughly $31 ,OHO per year (Indeed. Com skilled tradesman makes $46,000 per year (Salary. Com, 2014), an, rings home $120,000 (Salary. Com, 2014). In terms of raises, rata annual raises, we recommend that Clayton conduct annual mark into comparable salaries and then adjust pay as needed to stay IR with industry norms.Claptrap's plan is to increase workforce size which constitutes 130 employees. Assuming we have 1 director, 45 skilled laborers, 60 unskilled laborers, and 21 support staff, ‘M manage three different full construction teams. Each team will h manager, 15 skilled laborers, 20 uns killed laborers, and seven soul resulting in a per-team annual cost of roughly $1. 7 million. Clap dated that they are aiming for a net revenue growth of -3%, we r this team aim for exact revenue neutral, so they must earn $1. 7 revenue to offset the increased cost.Performance Incentives and A performance incentive system is and merit pay is a way to retail employees and should be used to recruit top employees. Enema) set goals for their employees that are attainable and realistic, who turn motivate them to work harder to attain the goals set by the Some incentives to look at would be bonuses, stock, and time off Merit pay is used frequently amongst businesses to pay their me based on performance. In order for the merit pay program to be employers must assure that the reward is delivered to the top en will be prominently healthier than raises given to average or subs employees.The theory of performance-based compensation for is that they should be compensated generously for out perf ormer workers, but if a worker performance is ordinary, that worker cord should show that. Compensation law The primary federal law to be aware of when it comes to compel benefits is the Employee Retirement Income Security Act, or IRIS sets the standards ensuring employee benefits plans are fair and mound and establishes employer obligations to provide benefit AR retirement plans (United States Department of Labor, 2009).Thud requires persons managing plan funds to refrain from conflict of transactions, disclose information on conditions of the plan, and the funds of the plan to the exclusive benefit of participants. ERE! Codifies provisions for COBRA, which gives former employees of large companies the right to continue health coverage at previous group rates, well as establishing rules for exclusions relating to preexisting conditions (United States Department of Labor, 2009). With regard to state law, there are a few requirements: Clayton is required to pay employees twice a Mont no more than 16 days apart, on regularly scheduled paydays.Employees w work beyond 40 hours in a week must receive 1. 5 times normal base and characteristics such as sex, ethnicity, and religious preference may not be considered when determining salaries (State Bar of Arizona, 2014). Conclusion To assist with the expansion to Arizona, it was important for Clayton Commercial Construction's strategies are comparable to other commercial construction business within the area. Team a made recommendations WI sat considerations with the compensation laws, benefits, incentives and marketing to assist Clayton Commercial Construction to excel in their new location.