Human Resource Management Report: Aon Hewitt Compensation Strategies

This report provides an in-depth analysis of Aon Hewitt's human resource management (HRM) practices, with a specific focus on compensation strategies. The report begins with a company background, highlighting Aon Hewitt's role as a leading human resource outsourcing firm. It then delves into key aspects of compensation, including internal equity achieved through job evaluation methods like JobLink, and external equity through market surveys and benchmarking. The report examines employee benefits and their role in retention and workplace safety. A compensation program overview is presented, along with the use of a Likert scale to assess the effectiveness of various aspects of the compensation approach. The report concludes with recommendations, suggesting improvements such as the use of the Factor comparison method and aligning compensation models with market trends, and modifying remuneration packages to satisfy employees. The report emphasizes the importance of motivational and training programs to enhance job performance and organizational profit. The report provides a comprehensive overview of Aon Hewitt's HRM and offers insights into its strengths and areas for improvement, providing students with a clear understanding of the company's approach to compensation and employee management.

Running head: HUMAN RESOURCE MANAGEMENT
HUMAN RESOURCE MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:....................................................................................................................................2
Company Background:....................................................................................................................2
Internal Equity:................................................................................................................................2
Compensation Alignment with Marketplace:..................................................................................3
Employee Benefits:..........................................................................................................................3
Compensation Program:..................................................................................................................4
Likert Scale:.................................................................................................................................4
Conclusion and Recommendation:..................................................................................................5
References:......................................................................................................................................7

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Introduction:
Human Resource Management is one of the major aspects of business for succeeding in
the market. The human resource management of the firm refers to the management of the people
of the organization for effective and successful business outcomes (Hendry, 2012). Among all
the aspects of HRM, the compensation approach is one of the vital parts needs to be discussed
with detail explanation (Jiang et al., 2012). The compensation approach is a part of the
remuneration package which is considered to be necessary elements for the multinational
companies practicing expatriation. The following section discusses the important aspects of
compensation highlighting the Aon Hewitt company.
Company Background:
Aon Hewitt is one of the leading multinational human resource outsourcing companies
that provide management consulting service and human capital to various organizations. The
basic function of the company is to provide service on outsourcing, consulting and reinsurance
breakage service. The company was founded in 1940 and headquartered in United States. The
number of employees of the company is approximately 29,000 (Aon plc, 2017). The company
has its offices in 120 countries and the number of offices is 500.
Internal Equity:
Through the job evaluation process the company ensures the internal equity of the
salaries among the employees. The company uses the JobLink methodology for the job
evaluation for measuring the size of the jobs against consistent and appropriate criteria (Aon,
2017). Aon uses the job evaluation system to determine the fairness and consistency. The
company uses the job evaluation system for defining the internal relationships of jobs within the
organization. The factors through whoch the company uses the job evaluation system are based
on the measurement of knowledge and application, problem solving and innovation, interaction,
impact and accountability. The process of the job evaluation objectifies the internal equity in
terms of the rate of pay for the new hires.

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Compensation Alignment with Marketplace:
Aon Hewitt conducts compensation surveys in the market for the identification of the
compensation packages offered by the competitor companies for the same job position. The
standard market survey based on compensation approaches enables the company to maintain the
external equity of pay within the organization as well as in the competitive market. The company
also conducts the market benchmarking which objectifies the comparison and benchmark of the
positions in the market, market pricing and skills practice, business evolution and job evaluation
(Aon plc, 2017). The company analysis of external market by purchasing the report of the
competitor companies and later analyses data to maintain the equity of remuneration packages
with the other competitors. The data such salary range, increased amount, incentives, allowances,
working hours, employment trends are some of the data that are being analyzed by the company.
On the other hand, for the overseas business the company research and identifies the
employment trends of host country.
Employee Benefits:
The company has established several policies in order to ensure the safety and retention
of the employees in the organization. the company conducts various training programs for
benefiting employees with the capabilities to avoid unwanted situations within the workplace
(AonHewitt Learning Center, 2017). This is considered as the co-pay benefits which employees
have been incorporated with the job responsibilities along with the determination of workplace
safety. The employees are provided with number of facilities to encourage the employees to be
engaged with the organization as well as their job responsibilities. Aon provides the employees
with the opportunities to achieve for their jobs, short and long-term incentives, promotion, travel
and other necessary allowances for the expatriates and so on (Aon plc, 2017). The remuneration
packages of the company for the employees are based on the market research and the company
tries to provide the best of all facilities to the employees in order to retain them as well as sustain
in the market.
Compensation Program:
Compensation approach is one of the vital aspect of the human resource management
which reflects the competency of the HR management in handling the employees (Herod, 2012).

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Compensation program of the company is not only based on the overtime work of the employees
but also is for the expatriates who are managing the overseas business of the company. In
addition, the compensation system is focused on the performance pay which is based on the
evaluation of the overall performance of the employees.
Likert Scale:
Question Score
1 2 3 4 5
Is the compensation survey effective?
Is the JobLink method of job evaluation is
effective for the company?
Are all the factors appropriates for the
compensation approach for expatriates?
Are the remuneration packages aligning with
the market trends?
Are employees satisfied with the
remuneration packages?
Rating:
1: completely ineffective, 2: partially effective, 3: average, 4: highly effective, 5: absolutely
perfect
Conclusion and Recommendation:
Therefore, it can be concluded from the above report that Aon Hewitt is one of the lading
HR solution provider companies in the international market. However, the HR management
system of the company is found to be not perfect. The report presents the various system through
which the company identifies its opportunities to develop the employment system compare to
that of the competitor companies in the international market. For the internal and external equity,
the company is practices various process which to some extent effects the remigration packages
and compensation packages offer by the company to its employees. Therefore, it is
recommended to the organization to use the Factor comparison method as the job evaluation

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process. On the other hand, it is suggested that the company needs to modify the compensation
model in terms of aligning with the market trends of compensation approach (Herod, 2012).
Apart from that, the remuneration packages of the company also need to be modified in order to
satisfy the employees of the home as well as the host countries. Along with this, the
recommendation implies that Aon must incorporate the HR practice with some motivational and
training programs apart from the reward system to enhance their job performance as well as
organizational profit (Taticchi et al., 2015).

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References:
Aon plc. (2017). Aon.com. Retrieved 1 December 2017, from
http://www.aon.com/unitedkingdom/trp/reward/broad-based-compensation-advisory-
solutions/pay-benchmarking.jsp
Aon. (2017). Aon Hewitt - Job Link™. Aonhewitt.gr. Retrieved 1 December 2017, from
http://www.aonhewitt.gr/en/consulting/reward/joblink.html
AonHewitt Learning Center. (2017). Aon Empower Result. Aon.com. Retrieved 1 December
2017, from http://www.aon.com/india/attachments/AHLC-Catalog-Certified-Rewards-
Professional.pdf
Boone, H. N., & Boone, D. A. (2012). Analyzing likert data. Journal of extension, 50(2), 1-5
Hendry, C. (2012). Human resource management. Routledge.
Herod, R. (2012). Expatriate Compensation: The Balance Sheet Approach. Society for Human
Resource Management.
Jiang, K., Lepak, D. P., Han, K., Hong, Y., Kim, A., & Winkler, A. L. (2012). Clarifying the
construct of human resource systems: Relating human resource management to employee
performance. Human Resource Management Review, 22(2), 73-85.
Taticchi, P., Garengo, P., Nudurupati, S. S., Tonelli, F., & Pasqualino, R. (2015). A review of
decision-support tools and performance measurement and sustainable supply chain
management. International Journal of Production Research, 53(21), 6473-6494.