Compensation and Benefit Analysis Report - Leadership Module

This report provides a comprehensive analysis of Bank of America's compensation and benefit philosophy. It begins by identifying the core philosophy, which centers on rewarding and recognizing employee performance. The report then explores the applicability of this philosophy to different employee types, market considerations, and the specific market strategies employed by BofA. Key aspects such as employee performance evaluation, communication practices, and the goals of the compensation plan are examined. Furthermore, the report defines compensation, outlines the targeted competitive position, and discusses the role of performance and the compensation mix. The analysis concludes with an evaluation of the compensation philosophy's realism, equity, and transparency, offering a well-rounded perspective on BofA's approach to employee compensation.

Running head: COMPENSATION AND BENEFIT 1
Compensation and Benefit
Name
Institutional Affiliation
Date

COMPENSATION AND BENEFIT 2
Compensation and Benefit
1. What is the single underlying philosophy that is articulate within the document?
Summarize in one sentence.
The single underlying philosophy that is articulated in this document is compensation
strategy and how it is used in Bank of America (BofA) as a way of recognizing and rewarding
performance of employees.
2. What is the philosophy’s potential for variability? In other words, can the philosophy be
applied to both exempt and non-exempt employees? Explain fully.
Compensation strategy only apply to non-exempt employees since the Fair Labor
Standards Act (FLSA) define how distinct they should be compensated. Exempt employees are
not applicable to compensation strategy because they are compensated with a salary, and not on
the basis of the hours that they have worked. Therefore, even if they work for more hours, they
earn the same salary each period which the FSLA denote to be a salary of at least $23,600 a year.
On the other hand, non-exempt are qualified for time and a half which is their normal wages
added to half a wage when they work overtime. Non-exempt therefore are entitled to overtime
compensation strategy due to their status.
3. Does the philosophy statement consider similar market or business industries? How do
you know? How is this reflected within the philosophy statement?
This philosophy statement considers one business industry. BofA is in the Banking
industry and this is reflected in philosophy statement as it clear points to banking operation and
not another industry.

COMPENSATION AND BENEFIT 3
4. What market strategy is reflected within the statement?
Within the philosophy statement, the market strategy used by BofA is strong pay-for-
performance governance criterion that gives reward sustainable long-term outcomes that
conforms to stakeholder interests.
5. What reference is made to employee performance?
The reference given to BofA employees is that it offers lucrative perks to its employees
including stock options that make them millionaires, a conducive working environment along
with compensation benefits (Duhigg, 2016). In addition, employees are paid according to their
hardwork and it has high employee retention with minimal layoffs. Moreover, BofA relies on top
talented employees and they have premium payment for their talented employees along with
being paid per-performance.
6. What information is provided about communication/openness? If none is provided, why
do you think so?
There is no information provided in this article for openness or communication. This is
because the matters that are addressed concerns compensation strategy which is concerned with
work-done rather than delegation of the tasks to employees.
7. What are the goals of the compensation plan?
The goals of a compensation plan are to attract more talented workforce to work for an
organization and also for employees’ retention (Milkovich, Newman & Gerhart, 2016). It can
also be used to motivate employees to be at their peak performance and improve their morale of
doing a duty.

COMPENSATION AND BENEFIT 4
8. How is compensation defined?
It is defined as all rewards that given to a worker for the duty the services that duties that
he has done or rendered related to a job. It includes salary or wages, bonuses, overtime, health
insurances, pensions, stock options and all other benefits received from an employer.
9. What is targeted competitive position in the market?
Competitive positioning involves carving out a spot in the competitive sphere, laying
your stakes in the ground, being known for a certain attribute in the market and winning
mindshare in the marketplace.
10. What role does performance play?
Performance plays a critical role of determining the result or outcome that is realized by
an organization. It determines whether an organization will accrue losses or profits
(Runtuwarouw, 2019).
11. What will be the mix of compensation?
The compensation mix in this case involves strategic approach to pay and internal
alignment.
12. In your opinion, what does the compensation philosophy communicate to employees or
potential employees?
In my opinion, compensation philosophy communicate that each effort that an employee
has dedicated will be accounted for. It illustrates that every effort is accounted for by the

COMPENSATION AND BENEFIT 5
organization and therefore employees should come motivated to work for their time and work
will be paid adequately.
13. Conclude your evaluation by rating the compensation philosophy on the basis of it being
realistic, equitable and transparent
Compensation philosophy is a realistic strategy as it brings productive result both to
employer and employee.

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References
Bank of America. (2018). Our people: Recognizing & rewarding performance (Links to an
external site.). [Website].
Duhigg, C. (2016). What Google learned from its quest to build the perfect team. The New York
Times Magazines, 26, 2016.
Milkovich, G., Newman, J., & Gerhart, B. (2016). Compensation (12th ed.). New York: McGraw-
Hill Irwin.
Runtuwarouw, R. A. (2019, October). Compesation to Increase Work Productivity of the
Employees. In Journal of International Conference Proceedings (Vol. 2, No. 2, pp.150-
159)