Compensation Strategies for Yahoo and Microsoft

This report analyzes the compensation strategies of Yahoo and Microsoft, including their similarities and differences. It also discusses the use of strategy maps as a tool for effective communication and provides recommendations for improvement. The report is based on secondary data collection methods and includes references from various books and journals.

COMPENSATION
STRATEGIES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
METHODOLOGY..........................................................................................................................3
(1)................................................................................................................................................3
(2)................................................................................................................................................4
(3)................................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Compensation is considered as key element that help to boost the morale and
commitment level of employees. In the world of business, human resource department has
contributed to develop and implement the best compensation tactics that in turn provide desire
outcomes to them and allow to provide the same to high authority. The current assignment will
be based on Yahoo, which falls under the category of leading technology based organizations in
the world. The study will explain review based on key points of firm tactic, variances associated
with tactics of chosen company and that of Microsoft. Furthermore, the report will define
similarities and differences occur in organizations compensation strategies. Lastly, it will justify
justified suggestions based on overall analysis.
METHODOLOGY
For purpose of collecting useful data and to achieve strategic goals, secondary data
collection method may utilize. It is one of the best sources that has been used by individuals or
specialists to collect information about specific subject or topic. The scope of chosen approach is
vast and because of this reason it may utilize in appropriate and systematic manner.
(1)
Yahoo is the leading technology based company which makes most of its profits from
display ads and search. Compensation strategy means when a company provides facilities to their
employees such as bonus, promotion, health benefits and other retirement plan (Compensation
strategy, 2021). These facilities vary from company to company which may also include
reimbursements and family health care facility. Yahoo company offers retirement benefits to
their employees so that it will motivate them to work effectively. They provide welfare facilities
to its staff members such as finance group health plans in order to promote well-being (Kang and
Lee, 2021). Along with this, the firm has provided benefits such as insurance premium where
businesses achieve deductions of tax for their efforts and staff members are given the tax free
plans. This support has motivated people working in the company as a result the company has
achieved business performance. There are other things also which make employee engagement
successful such as dental and health insurance, life insurance, death benefits. There are other
plans too that has given a lot of benefits to people such as pension plans for stable stream of
income in the future life. With this plans, company help their staff members invest and save for
retirement so that they can live their life freely.

Health and insurance facilities and other
facilities
Retirement facilities
Dental insurance Financial benefits for future
Life insurance Retirement plans
Health insurance for family Contribution pension plan
Death benefits Profit sharing
Accidental insurance Advice of Save and invest for retirement
Insurance premium
Long term disability insurance for staff
members
Severance pay
Leaves which includes sick and vacation leaves
(2)
To motivate employees and satisfying their basic wants every company gives benefits and
compensation plans to manage people in the company (Wan and et.al., 2021). These
compensation strategy or management is helpful to manage employees’ engagement so that
company can use this plan in a pay-for-performance method.
In the year 2012, Microsoft was using stack ranking for their employees as its
compensation strategy which has motivated people working hard at workplace. The major focus
was to attract top talents in the business market and within the company so that it will be helpful
to retain employees. They have used this strategy to align with the employee’s individual
performance. The aim was to encourage staff members to perform well so that they can achieve
business goals easily. Here, managers of the company rank staff members after reviewing
individual performance, according to their work using scale from one to five. By adopting this
strategy, the organisation has successfully motivated workers to compete by performing well in
the competitive world (Huang and et.al., 2021). Moreover, the firm also make compensation
policy for those who achieve success and perform well, benefit policy includes reward system.
Staff members are to be rewarded for their hard work and efforts it means when employees
perform well they will get better pay as compared to the counterparts. This system has motivated
those people who are underperformers, as a result they also performed well. Microsoft

employees are compensated in a different way which includes, annual cash bonuses, stock
awards, on-hire cash bonus, basic salary.
On the other hand, yahoo provides compensation to their employees such as twenty days
of vacation annually. The main aim of the company is to get employees who are really aligned
with the company’s mission, so the firm have successfully made policy of fair compensation.
Many employees have received retention equity award of stock and along with this stock options
if the staff members stay with the company for longer period of time. The firm has also given
facilities like incentives based on base salary, partial compensation and other benefits such as
health benefits, life insurance, family plans and retirement plans.
(3)
In business environment, companies need to improve their compensation plans for staff
members whether to motivate them or to make global business strategy. There are many reasons
which has impacted the employee compensation positively and negatively such as economic
conditions, labour market condition, cost of living, government policies and employee
engagement. These compensation strategies will determine pay scale and benefits for staff
members and labour. So that they can work effectively and company can successfully motivate
their workers (Wu and et.al., 2021). This has successfully achieved business goals and help
decide where employee is motivated and what more improvement is needed in the strategies.
Reward system and compensation strategy is basically aligned with organisational goals; this is
the reason behind employees earning incentives if they achieve goals successfully. These system
has a positive impact on motivating people, retaining employees and recruiting talented people in
the firm.
2) A strategy map is used by company as it describes how the company creates value by
connecting strategic goals. It is one of the most popular elements in the balance scorecard
techniques, because it is useful in communication strategy which shows how value is create by
the company. With the help of well-designed and well organised strategy map, every staff
member can know about strategy (Suárez-Gargallo and Zaragoza-Sáez, 2021). Ultimately, it
gives an idea about how people are doing their jobs and how work efforts and contribution affect
the organisation’s strategic objectives.
Leaders of yahoo company can make well designed map and flow chart to simplify and
communicate strategies so that they can find out about key goals and uncover gaps in business

strategy. In other words, With the help of these strategy map employees can display about
employee knowledge and generate strategic value. This offers a visual representation of
company’s strategy so that employees and managers can communicate effectively in order to
understand strategy of firm and can make necessary changes to ensure the achievement of
targets.
Recommendations
In order to overcome with problems of communicating strategy to staff members,
company can use strategy map as a tool. They need to focus on different template to improve
their own maps which are based on the methods like balanced scorecard and other variances. It is
recommended to focus on developing an effective communication plan and compensation plan
for right segments of staff members. In order to motivate people in the company, it is suggested
to establish SMART goals and focus on using merit increases to provide reward to high
performers. It is also advisable to determine the market strategy of other company it means they
need to determine and find out what competitors are paying their employees.
CONCLUSION
From above analysis, it has been concluded that organisation has retained and acquired
skilled candidates that are contributing to achieve set aims and objectives. Its compensation
strategies have provided desire outcomes to management as they have gained chance to work
with such a creative and productive team member. Furthermore, it has been identified that with
the help of map and flows chart leaders can easily achieve success in communication method for
discussing compensation strategies. Well-designed maps are used as a tool and they are really
helpful to employees. Further, they can know where they fit in the company and they can see
how their jobs can impact the strategic objectives of the firm.

REFERENCES
Books and Journals
Kang, E. and Lee, H., 2021. Employee Compensation Strategy as Sustainable Competitive
Advantage for HR Education Practitioners. Sustainability. 13(3). p.1049.
Wu, H. and et.al., 2021. An analysis method and a compensation strategy of motion accuracy for
underwater glider considering uncertain current. Ocean Engineering. 226. p.108877.
Wan, F. and et.al., 2021. A Universal Compensation Strategy to Anchor Polar Organic
Molecules in Bilayered Hydrated Vanadates for Promoting Aqueous Zinc‐Ion
Storage. Advanced Materials. 33(36). p.2102701.
Huang, J. and et.al., 2021. The precursor-compensation strategy boosts the photoresponse
performance of air-stable, self-powered Cs 2 SnI 6 photodetectors. Journal of Materials
Chemistry C. 9(40). pp.14217-14225.
Suárez-Gargallo, C. and Zaragoza-Sáez, P., 2021. How the Balanced Scorecard Is Implemented
in the Spanish Footwear Industry. Sustainability. 13(10). p.5641.
Online
Compensation strategy. 2021. [Online]. Available through: <
https://hrmhandbook.com/hrp/compben/compensation-strategy/>