Organizational Objectives and Total Compensation
As a human resources consultant, instilling knowledge into organizations regarding laws affecting compensation plan is asked of frequently. BioTeq Industries is no different; it is a biotech company that is in need of help with their compensation plan. BioTeq is a federal contractor with an average of 200 employees, and is looking for guidance and information regarding laws and regulations that may have an effect on the organization’s compensation plan. The remainder of this paper will explain how certain laws and regulations may affect BioTeq’s total compensation plan, along with the similarities and differences influencing compensation for BioTeq and companies in other markets.
There are several ways that companies are able to recognize and reward their employees, and the most important option is the compensation package offered to an organization’s employees. Although there are several options that may be included in compensation packages, the two most important options to employees are health benefits and pay.
As an organization within the biotechnology industry, Bioteq must take their employees job functions into consideration. People that work in the biotechnology industry tend to work with chemicals and other products that may be potentially hazardous to their health, thus BioTeq must provide their employees with high-quality health benefits. Therefore, the two laws/regulations that may potentially affect BioTeq’s compensation plan are the Executive Order 11246, and the McNamara–O’Hara Service Contract Act of 1965.
According to Joseph Martocchio (2009), the Executive Order 11246 “imposes requirements on contractors with government contracts worth more than $50,000 per year and 50 or more employees.” The contractor’s are required to develop affirmative action plans annually to identify methods to avoid discrimination as time progresses. Being that BioTeq is a government contractor with 200 employees, the Executive Order 11246 will be a requirement for the organization. The McNamara–O’Hara Service Contract Act of 1965 also may affect BioTeq, because it is intended for contractors whom are contracted by the federal government. Not only does this law/regulation require contractors to pay local prevailing wages if it exceeds $2,500, but it also requires for the contractor to offer fringe compensation that is equal to the local prevailing benefits (Martocchio, Ch.3, 2009).
Being a federal contractor with 200 employees, BioTeq has additional regulations that would not affect organizations that are not federal contractors. Two great examples are the Executive Order 11246, and the McNamara–O’Hara Service Contract Act of 1965. As previously mentioned both of these regulations affect contractors, one affects contractors with 50 plus employees, and the other affects federal contractors. However, BioTeq remains similar to organizations outside of the biotechnology industry by having to keep in alignment with the majority of laws/regulations currently in effect. Such regulations include the Social Security Act of 1935 and the FLSA of 1938.
When creating a compensation plan BioTeq must take several factors into consideration. These factors include the type of work required by employees, and the hazards involved in the work being performed. Two of the regulations that BioTeq must keep in mind as well, are the Executive Order 11246, and the McNamara–O’Hara Service Contract Act of 1965. The reason being is that both are intended for contractors, which BioTeq is. Although BioTeq may be contractor, the organization is still required to keep in alignment with regulations such as the SSA of 1935 and the FLSA of 1938. Overall, BioTeq has several determining factors that need to be contemplated when establishing a compensation plan.
Martocchio, J (2009). Strategic Compensation. A Human Resource Management Approach Fifth
Edition, Chapter 3: Contextual Influences on Compensation Practice.
Retrieved April 30,
2012, from https://ecampus.phoenix.edu/content/eBoothekLibrary2/content/eReader.aspx #ch03lev1sec2.
Cite this Organizational Objectives and Total Compensation in Different Markets
Organizational Objectives and Total Compensation in Different Markets. (2016, Oct 29). Retrieved from https://graduateway.com/organizational-objectives-and-total-compensation-in-different-markets/