Essay Plastec Strategic Comp - 1566 Words

Strategic Compensation Plan for Machine Operators: Plastec Company Case Study Webster University Strategic Compensation Plan for Machine Operators: Plastec Company Case Study Over the last 18 months, Paul, Director of HR, has faced many challenges within Plastec Company regarding high turnover rates, discrimination and much needed training, along with other various human resource concerns. The organizational culture has thus improved. In effort to keep that momentum, Paul is currently developing a strategic compensation plan for the company’s machine operators. This plan will help Paul to better understand how Plastec compares with other area employers in terms of wages and benefits, and develop†¦show more content†¦This could potentially lead to friction in the workplace. Tensions could arise around suspected â€Å"free riders† or poorly performing employees, which would prevent the team from making their quota and or receiving the reward. However, Paul must first research the legality of measuring a particular variable and ensure that the minimum pay is compliant with the Fair Labor Standards Act (FLSA) and the Equal Pay Act (EPA). Pay rates must be compliant with the Fair Minimum Wage Act of 2007, as well as the overreaching rules of the FLSA, where the current minimum wage is $7.25 per hour. To maintain compliance, Plastec must demonstrate that the combined base salary and average variable salary amounts equal the minimum wage (Mathis, Jackson, Valentine, p371). Additionally, the company must be cognizant of the factors determining over time compensation and properly classify employees under FLSA. Plastec might want to offer a base salary plus commission; however, this type of variable salary is not available for many employees due to FLSA standards for determining exempt or non-exempt status. In a situation like Plastec’s where they are working with hourly wage employees who are non-exempt, they will have to determine a fair hourly rate and pay overtime for employees in addition to any incentive pay for production. This is where employers are at the greatest risk for abuse. Hourly employees need to be monitored to ensure that the additional production is happening during