Compensation System of UPS

Compensation System of UPS 0
Title: Compensation System of UPS
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Compensation System of UPS 1
Contents
Current State of Compensation System of UPS.........................................................................2
Analysis of the Compensation of Special Groups......................................................................2

Compensation System of UPS 2
Current State of Compensation System of UPS
Compensation given to the employee for their working hours in the organization
includes both financial as well as non-financial benefits and rewards. The financial benefits
include salary of the employees, bonuses, commissions, employee stock options. Whereas,
the non-financial benefits include health insurance, flexible timings, life insurance policies,
travel allowances (Juneja, 2019). The current state of the compensation system of United
Parcel Services is that the incentive established a link between its business objectives and the
incentives and compensation that it pays to its employees. This indicates that the organization
has performance-based compensation system, where the employees are been motivated to
perform in alignment with the business objectives. The organization has formed a Committee
which establishes the Management Incentive Program (MIP).
Analysis of the Compensation of Special Groups
The special group in the organization can be defined as the group of people who are
strategically important for the organization and they have an inevitable role in the
achievement of business objectives. They are directors, supervisors, management executives.
This leads to pay variation in the pay structure of the organization. The directors of the
company are compensated with equity, stipend and other insurance. The executives’
compensation package consists of basic salary, stock options and golden parachutes (Noe,
Hollenbeck, Gerhart & Wright, 2019). The golden parachutes are basically larger financial
compensation given to company executives if the company is taken over by another firm.
The compensation system of United Parcel Services for the executives includes cash
compensation, total equity and long term incentives. The UPS paid its CEO total
compensation which includes: bonus, non-equity incentive comp, base pay; stock award
value and option award value; and other compensation (Abney, 2019). The trade unions play