Skilled labor is one the most important aspect for the success of any organization or business. It takes a lot of time for the labor to become more efficient and cost effective for the business. Therefore, management of the business announces several compensation and other benefits for the employees throughout the year. The main reason of these bonuses or benefits is to retain the skilled labor for maximum efficiency in the working of the organization. In the current scenario, it is clear that the company doesn’t have skilled labor in Mexico as compared to USA. Therefore, the more appealing pay package is required to motivate US employees to work in Mexico. (Boutcher)
The management must announce the rewards and bonuses for the ten employees if they are successful in the up and running by deadline. These rewards must include cash rewards and promotions if possible. The cash reward must be the percentage of revenue generated by the new plant in Mexico. By announcing the reward related to the revenue will force employees to work more efficiently and professionally. However, it is very important to have an internal auditor to check the quantity of sales, quality of products and expenses to monitor the true and fair performance of business. (Greene)
Another very important issue to discuss is that management must ask for the attainable and challenging task for these 10 employees. It is highly probable that employees will refuse to take responsibilities of the goals of the new plant in Mexico are merely achievable. Goals at new plant must be achievable so that it attracts the current employees to consider the compensation salary and benefits offered for the duties in a new plant in Mexico. (Greene)
Pay structure for the employees must be clear and simple. In the given scenario, the domestic equivalent salary is $80,000 (annually). Management must offer little higher rates than $80,000 to motivate and attract the employees. Reason behind this increment is the skill level of these employees. However, revised rates must be sufficient and must not create any extra expense on the budget. Moreover, the pay package also includes the overtime standard rates on an hourly basis. In the pay package, management can include two to three air tickets for the employees to visit their families at charismas, casual visit and in case of any family issue. Living accommodation must be provided free of cost to the employees and to save traveling cost, accommodation must be at close distance from the new plant. Furthermore, medical requirements must be fulfilled. By providing such facilities, management can compensate the employees in an affordable and effective way. (Greene)
Basic pay method is the best pay method in this scenario. As the new plant will work outside the home country, therefore, in these circumstances, the basic pay method is the best method. Another reason of implementing basic pay method is that the employee’s bonus base is decided on the percentage of revenue. Therefore, it is obvious that employees will spend their most of the time in the working area and there is no need to spend extra money on checking the presence of employees. The overtime pay rate is always best on an hourly basis. The overtime pay rates must be equal to the rate of other local employees. The reason of maintaining these overtime pay rates is that employees will get rewards and bonuses on the basis of their performance as well. Therefore, it is fair to keep these ten employees on the same overtime pay rate. ("truckinginfo.com")
Boutcher, Richard. "Good Compensation Management Necessary to Boost Workforce
Performance!."ezinearticles.com., 9 Feb 2010. Web. 18 Nov. 2013. <http://ezinearticles.com/?Good-Compensation-Management-Necessary-to-Boost-Workforce-Performance!&id=3727769>.
Greene, Robert. "Effectively Managing Base Pay: Strategies for Success." shrm.org., 21 Jan
2010. Web. 18 Nov. 2013. <http://www.shrm.org/hrdisciplines/compensation/Articles/Pages/CMS_005592.aspx>.
"10 Ways to Control Workers' Compensation Costs."truckinginfo.com., May 2012. Web. 18
Nov. 2013. <http://www.truckinginfo.com/channel/fleet-management/article/story/2012/05/10-ways-to-control-workers-compensation-costs.aspx>.