Compensation Philosophy of Maersk: A Strategic Analysis Report

This report analyzes the compensation philosophy of Maersk, examining its structure and the influence of the market on its approach. It delves into the value of salary surveys for the organization, highlighting how they contribute to competitive pay structures and internal equity. The report also explores the advantages of discretionary benefits at Maersk, such as fostering positive employee relationships, boosting productivity, and aiding in talent acquisition and retention. The analysis is based on a case study and relevant literature, providing a comprehensive overview of Maersk's strategic approach to talent management and employee compensation. The report emphasizes the importance of aligning compensation with market trends and employee needs to achieve organizational goals.

Running head: MANAGEMENT
Management
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Table of Contents
Analysis of the Compensation Philosophy of Maersk and Influence of Market on Their
Philosophy..................................................................................................................................2
Analysis of Value of Salary Surveys to Organization...............................................................2
Analysis of Advantages of Discretionary Benefits to Maersk...................................................3
References and Bibliography.....................................................................................................5

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Analysis of the Compensation Philosophy of Maersk and Influence of Market on Their
Philosophy
The philosophy related to compensation of Maersk helps in describing the
comprehensive policy related document which has been established by human resource in the
collaboration with line managers for providing the different guidelines for the compensation
of employees in the organization. In addition, the philosophy of compensation tries in
describing commitment on how the company Maersk values their staffs (Groysberg and
Abbott, 2012).
In the respective case, Maersk utilises policy of compensation for explaining how the
rewards are being structured in the relationship in current market scenario in the relation to
the current market related prices. Maersk’s compensation policy comprises mainly
components such as remuneration of management related board, cash incentives for short
span as well as long-term kind of incentives along with different discretionary benefits. In
case of the remuneration management executives, the overall philosophy of the compensation
helps in allowing the different members of management to receive the fixed amount of
salaries (Groysberg and Abbott, 2012).
The short-term type of cash related incentives helps in enabling Maersk in
incentivizing the members who are performing excellently. On the other hand, compensation
philosophy can be changing as per the market values of the job change of Maersk. The entire
HR section of Maersk can be increasing benefits as well as compensation of the employees
when the positions of the job becomes highly competitive in market. It will be increasing the
potential for retaining the old employees and it will be capable of attracting new employees
effectively.

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Analysis of Value of Salary Surveys to Organization
The surveys related to the salary helps in involving the gathering of the information
related to the compensation of the employees with few employers for determining level of
pays for the different categories of the job. As commented by Groysberg and Abbott (2012),
the salary related surveys are being conducted by the different regions, sectors or the job-
related classification for facilitating the comparability tests of salaries. Therefore, the surveys
related to salary helps in providing the necessary kind of information for building of the
competitive pay related structures for the company.
Through the proper survey of the salary surveys, it allows the companies in preparing
the effective plan of compensation. On the other hand, as discussed by Groysberg and Abbott
(2012), he has commented that the surveys on salary helps in understanding whether the same
is equitable internally and competitive in the external front. Moreover, the lack of proper
surveys on the salary surveys will be making the compensation plan ineffective internally and
it is less competitive on the external aspect.
The appropriate salary surveys will be generating the most effective benchmark
related information and it will be motivating the different employees effectively. In addition,
the companies need the proper understanding of the philosophy of compensation which will
be providing the effective idea for understanding whether there is tailoring is required or not.
Analysis of Advantages of Discretionary Benefits to Maersk
The discretionary kind of benefits of employees are the ones which is not necessitude
by the law to be provided to the employees by the employers. There is conception among the
individuals that the discretionary benefits are beneficial towards the employees, however, as
opined by Groysberg and Abbott (2012), the discretionary type of benefits is advantageous to
the overall organization and is major advantages of the discretionary related benefits is

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inclusive of the fact that it is helpful for building the positive and appropriate relationships
among the different employees successfully.
There is existence of the positive kind of relationship among the employers and
employees at Maersk. Moreover, there is boost in the overall productivity through the
discretionary benefits and the different employees working with Maersk are fetching highly
productive through receiving the discretionary benefits and they are being motivated for
performing better. Last, but not the least, Maersk can be matching the benefits of competitors
(Bryant, 2017). In addition, Maersk can be attracting as well as retaining best employees and
it helps in allowing the company for gaining competitive advantage against the other
competitors which does not provide the discretionary benefits.

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References and Bibliography
Bryant, P. (2017). Compensation & Benefits Review Grapples With Societal-Economic,
Business-Strategic and Employee-Psychic Level Issues.
David, H., Duggan, M., Greenberg, K., & Lyle, D. S. (2016). The impact of disability
benefits on labor supply: Evidence from the VA's disability compensation
program. American Economic Journal: Applied Economics, 8(3), 31-68.
Groysberg, B., & Abbott, S. (2012). AP møller-maersk group: Evaluating strategic talent
management initiatives. Harvard Business School Case.
Klonoski, R. (2016). Defining Employee Benefits: A Managerial Perspective. International
Journal of Human Resource Studies, 6(2).
Mabaso, C. M., & Dlamini, B. I. (2017). Impact of compensation and benefits on job
satisfaction. Research Journal of Business Management, 11(2), 80-90.
Sun, L., & Hovey, M. (2017). The endogeneity of executive compensation and its impact on
management discretionary behavior over financial reporting. Available at SSRN
2912640.