Compensation Practice, Ford Motor Company, Compensation Strategy (Term Paper Sample)

COMPENSATION PRACTICE
Institution:
Name:
FORD MOTOR COMPANY
INTRODUCTION
The Ford motor company is mostly referred to as “Ford”. It is located in America and it commonly deals with Automotive. Ford has its headquarters located at Dearborn, Michinga. The company was founded by Henry Ford but later incorporated on 16th June 1903. Ford majorly deals with sell of commercial vehicles and automobiles using the Ford brand and also is sells most luxury cars under the brand of Lincoln. The company is also believed to own Australian FPV car manufacturer, Brazilian manufacturer, SUV and Troller.In the last few decades, the company has also produced a lot of Automotive components and Tractors as well. The company owns approximately 8% proportion in Aston Martin located in United Kingdom and approximately 49% proportion in Jiangling found in China. The company also has some joint-ventures in other countries such as China, Taiwan, Thailand, Russia and Turkey. Moreover, Ford is listed in New York stock exchange under the control of Ford family given that, the family has majority of voting powers though have minority ownership.
FORD’S COMPENSATION STRATEGY
These are policies that enables a company to forecast its future. This strategy is one of the key subjects that can either scare away employees or attract them. It is directly related to the business performance and its effectiveness as well. In today’s business, a company is taking a strong stride towards compensation practice as failure to consider that, the company could end bankruptcy in the event they lose the employees. Ford motors company has a very competitive compensation practice, not only within the company itself but also across the board. By listening to their stakeholders input and even keeping them involved will continue to make them fully involved and therefore willing to stay in the company for many years to come. The company has specific laws implemented to ensure its employees do receive fair compensation package. By saying that, it does not mean the company cannot go for a better compensation package. After my key evaluation company’s compensation program, I can courageously attest that, their compensation program is well structured and i admire to work under the company. Be
HOW FORD APPLIES COMPENSATION PRACTICES
The company has developed compensation benefits philosophy, guiding principles and strategies on which all benefit programs are developed. Ford has a compensation committee that deals with compensations and it has adopted the following practice to all of its salaried employees:
* compensation philosophy
compensation programs are very crucial in determining relationship between the company and its employees. These programs also accommodate rewarding and challenging work. Ford being part of leading companies and also with its diverse workforce, it has consistent programs that are affordable to the company. Pay for performance is also very key at Ford company. The company rewards employees for contribution and performance to the success of the business. The company’s compensation programs are always competitive with leading companies in almost every country.
* Policy statement
The company uses compensation programs to attract, retain, and motivate employees and also to reward the employees who have contributed for the business good results. Those benefits are meant to provide employees with income protection and security from catastrophic loss. Ford achieves these programs while minimizing its long-term liabilities.
GUIDING PRINCIPLES OF COMPENSATION PRACTICE
* Performance of an employee
Ford compensation programs always supports a pay-for- performance culture. The compensations are meant to motivate employees for having achieved admirable business results.
* Competitive positioning
Good compensation and benefit programs are very important to motivate, attract and maintain a high performing environment. The company targets the best competitive levels of automotive as well as other leading firms within the national market.
The company measure the degree of competitiveness by considering program value to its employees as opposed to the comparator group. When the company’s conditions are unfavorable for long term basis, it may decide to utilizes its short-term and long- term maintaining programs to ensure the potential employees do not leave the company.
* Affordability
Benefits, compensations and other related programs Ford uses are affordable to it over the medium- to long-term. However, these programs should not interfere with significantly based upon short-term company conditions.
* Behaviors
The compensation program at Ford seem support its business performance objectives as well as promoting desired behaviors among the employees.
* Flexibility of the programs
Benefits, compensations and other related programs should pay key consideration to the workforce diversity and give out meaningful choices where required.
* Stability and consistency of program
It is the role of the company to have compensation programs that is stable and consistent. Particularly, to those positions considered high. The compensation program at Ford has a high degree of consistency within the company and little do they fluctuate significantly year-over-year.
* Delivery efficiency
Compensations and other related programs should be easy to apply and understand as well as maintaining stable economics of scale and technology. These programs need to be implemented in an equitable, consistent and efficient manner. At Ford motor, these programs are delivered in a manner that is tax-effective not only to its employees but also to the company itself.
FORD’S COMPENSATION CHALLENGES
Here we are going to discuss some of the challenges facing Ford motor in its compensation strategy. They may include:
* External competitiveness
As the company strives to establish competitive pay, so as to attract and retain the right talents, it usually compares its compensation rates with the ones published in surveys to gauge itself. This influences the compensation rate that the company offers.
* Its Internal equity
The HR professionals of Ford motor should have legal considerations on their minds when managing compensation programs for its employees. For the company to be competitive with the external market, its pay must be equitable internally within the company. This is largely affecting the company in its internal decisions on compensation programs.
* Executive compensation
This is an issue which is affecting nearly all the companies across the globe. Ford has been alleged by the mass media, its stakeholders and also by the public governance for coming up with programs that show huge reward upon its executive. For any company’s plan, it has to maintain an equilibrium between the procedure for coming up with executive benefit plan that probably attracts and keeps high ranked executives and that are recommendable to the public as well.
* Recognizing and rewarding employees
The company is supposed to come up with program that will successfully motivate employees to work best. These programs are supposed to recognize and reward employees for their contribution in a way that the company can afford. However, we see it is the supervisors and managers in the company who recognizes and rewards employees. This is contrary to our expectation since HR department should have developed that rewards and promotes employees.
BEST PRACTICES AT FORD MOTOR COMPANY
Let us start by describing the term “best practice”. Sincerely speaking, that term does not exist in Ford motor. However, they have different approaches of doing business. But there exists no best way due to some reasons. To define “best “however is “something that is m...