Compensation Analysis for Wal-Mart Company

The paper discusses the concept of compensation analysis and its application in organizations. It includes a case study of Wal-Mart Company and how it uses compensation analysis to determine employee salaries. The paper also explores the challenges faced by the company and provides recommendations for implementing a compensation strategy.

Running head: COMPENSATION ANALYSIS FOR WALMART COMPANY
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Dealing with Compensation Analysis
Name
Institution
Author’s Note

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Compensation Analysis for Wal-Mart Company
Executive Summary
The need to understand salary parameters between the employer and the employees may
have prompted for the establishment of a control factor knows as a compensation analysis. Many
organizations are today using this tool to actually determine if the salaries paid to their
employees are actually reasonable in relation to the to their set rate of working hours among
other related factors. This paper is therefore going to focus on some best examples through
which the application of compensation analysis is used and how it has influences different
organization in making decision relating to employee salaries.
Introduction
Compensation analysis is the process by which employers use to determine whether they
are paying their employee's a reasonable salary as per the set rate in the region. It is always a
complicated process as they have to compare the wages form different areas, companies, job
titles and the level of experience before they come up with their solution (Rogers, 2016). The
plan is not only based on the salary, but also indirect benefits such as profit pool, profit sharing,
and deferred payment program (Shannon & Lowe, 2012). All these are always mapped out to
give the total aggregate spending and payments over a certain number of years for both the
internal company corporate finance and the purpose of retention and recruitment.
Company Analysis
Wal-Mart Company is an American based corporation which was started in 1962 by Sam
Walton. Its headquarter is based in Arkansas Bentonville, and it deals with various products such

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as Electronica’s, movies and music health and beauty, pet supplies, sporting goods and fitness
and different grocery whereby it provides services such as Wal-Mart money card, pick up today
and Wal-Mart pay. It operates with$ 21.957 billion with a net income of $ 6.67 billion; the total
assets are estimated to worth $ 72.496 billion making the company be persecuted as stable as it
also has a total of 2.2 million employees worldwide. Their customers are always available all
over the world from different demographic environment due to the various branches that they
have located all over the world giving the advantage of making a lot of profit. Due to sales they
made but the company faces disadvantages in that all their investments outside North America
has portrayed mix reactions in that their operation in China, united kingdom, and North America
are successful, but those in Germany and South Korea have failed massively, making them sell
the store to the Germans. The main aim of creating these company was to make a lot of sales at a
relatively lower price, but the change comes up whereby their competitors also began selling
their products at a lower price even though they got suppliers.
Compensation analysis
Compensation analysis is a strategy based on internal and external factors that are needed
to evaluate the job, develop a payment system and payment theory when deciding the mix
payment you will use after taking into account legal implications. Therefore it is accessible to
analyses the compensation nature of Wall-mart because the company has a lot of turn over due to
the availability of many customers worldwide who purchase their products in the branches they
established. These make them operate under a stable financial condition even though at times it
is always being misused in terms of bribery, but the employees are still confident due to the

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presence of the union which still fights for their rights. But their confidence is always brought by
the fact that there is a satisfactory relationship between them in terms of the corporation in
delivering their duties. The same is also seen by the management whom they’re; late within a
good way, therefore, their efforts are always appreciated, and the quality of the products is still
realised thus making the company be able to achieve its objectives. The challenge which the
company faces here is that their competitors are also lowering their process further; thus some
customers are moving out and stealing the market share thus reducing their financial income.
The company also boosted the morale of their workers by providing them with competitive
rewards which were communicated to then in a general meeting and is always distributed fairly
depending on how hard working you are. The awards are still divided into two based on intrinsic
and extrinsic motivation whereas extrinsic are the staff quarters provided and the meals the
company offers to his workers, there is also promotion and salary increment which is always
done on a fairground after evaluation and analysing your job (Baker, Jensen & Murphy, 2016). It
also goes further to check for market share and available knowledge to ensure equity in terms of
salary distribution and various rewards (Held, McCormick, Ojo & Roberts, 2016). Then there are
also intrinsic rewards which include adding the employs responsibilities, organising for the
seminars, and recreational events so that they can enjoy themselves, and feel valued. It also helps
in breaking the work boredom, and a means of socialising, therefore, a motivation that will make
them work hard produces quality and make the company achieve a lot of profit.
Contextual Variables

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These are the variables which will help you to determine whether the organisation
strategy and the compensation strategy put in place are useful to your organisation or not
(Edmans & Gabaix, 2016). The best variable to employ is technology since it is helpful in the
business as it will boost the online market of the company making it gain a lot of customers
online and sell most of its products online (Fives, Mills & Dacey, 2016). These will helps
customers to be attracted to the business because they will save their time of going to buy that
product thus reducing the congestions in the company. It will also promote the company savings
since it will only require few people with IT knowledge to run the stores; thus the company will
save a lot since antitheft will also be ensured thus boosting their profits.
Structural variable
Here the business will be organized in the form of departments, and each depart will have a
leader who will communicate the information to the general managers. All the departments will
coordinate as a subunit with everyone’s decision being incorporated but the final one coming
from the manager (Pradhan, Jena & Kumari, 2016). The staff behaviours will also be controlled
through the making of handbook them and their performance easily evaluated with the
departmental in place.
Management systems
When it comes to management system, the main objectives of this position are make policies and
decision regarding most of the compensation analysis. The management systems conduct most of
the organization internal activities including evaluation of the employee’s positions and ranks.

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The pay cut is determined with consideration to the many factors as per the organizations set
salary parameters and best policy practice. Moreover, the management systems are also
responsible for the pay rise and pay cut with regards to employee ranks and roles
Merit Pay and Indirect pay
Merit pay can sometimes be called incentive pay since it is paid based on performance.
Today, many organizations encourage their employee performance by provided or rewarding
best performance among employees. On the other hand, indirect pay are the elements of
remuneration which could take the form of insurance benefits or even pensions which are added
on top of the basic salary or wages. In this kind of phenomenon, it only through the
compensation analysis can merit pay or direct pay be determined as per the policies of that
particular organization.
Base pay
These are the foundation of the compensation which is always calculated in 3 ways including,
payment of knowledge, market price and job evaluation which is useful in evaluating the
retention, number of complaints and time taken to hire people to fill the vacancies (David,
Duggan, Greenberg & Lyle, 2016). They help in defining success in terms of incentives,
commission and rewards of profit sharing and stock options. The goal of compensation is to

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achieve the company objectives, be equitable, promote desired employs behaviour and comply
with the mandatory laws.
Change Factors
According to Pettigrew and Whipp, there are 5 crucial factors which are used to
determine or implement strategic change. These factors include; continuous environment
assessment which basically works by assessing the internal and external environment in an
organization. Secondly, we have Treat human resource, which acts as an assets or liabilities. It
generally makes the employees feel appreciated within an organization. The link strategic and
operation change makes the building capabilities as operational and powerful as such. Finally,
we also have the lead change and overall coherence which provides an opportunity for a
competitive edge between the employees.
Recommendation
The compensation strategy will include rewards based on market evaluation and performance of
employees with a clears set standard which is known by all. To ensure procedural justice, I will
consist of the market information to ensure that fairness is promoted in terms of giving rewards
thus doing away with the complaints.
Conclusion

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Compensation analysis is essential to all the business. It helps in determining the strength
and weaknesses of the company which can be changed at an earlier stage. Furthermore, it
provides vital information that employs can use to understand the procedures and the set
standards of providing them with rewards which promote and boost their morale so that they can
perform better. These understanding always help in removing biasedness and doing away with
the complaints of favouring one employs over the other due to the set standard and open ways of
deciding on the company through various departmental heads.

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