Compensation System of Imperial Oil-Free-Samples for Students

Question: Discuss about the Compensation and Benefit System of Imperial Oil. Answer: Introduction Imperial Oil Limited was founded in the year 1880s in London, Ontario of Canada. They have their headquarters situated in Calgary, Alberta, Canada for operating in their major markets. The company has achieved the second position in Canadian petroleum industry (imperialoil.ca, 2017). They produce high quality petrochemical products for their customers and provide standard and friendly services in their stores for attaining sustainability. They channelize their products and services through Esso retail network to the customers with needs of fuel. The products are then utilized by the end users that are individual customers utilizing to the fuel to run their motor vehicles. The current employment strength of the company is 5600 decreasing from 5700 in 2015 (statista.com, 2017). This report identifies the internal equity of the organization by identifying the existing job evaluation system. The report then identifies analysis methods and performance evaluation method for understanding how equity is maintained. The report further discusses the compensation methods utilized by the organization and how they are aligned with the marketplace. Later part of the report discusses about the benefits received by the employee form working Imperial Oil. The effectiveness of the compensation system it later evaluated in the report. The final part of the report consists of recommendation and conclusion made for developing the existing system in the organization. Internal Equity Job evaluation is the method of prioritizing the positions in an organization to determine the value of the job. Imperial Oil uses factor comparison method of job evaluation system, which is both detailed and expensive job evaluation system of all. It is a combination of several evaluation method, which Imperial Oil utilizes to evaluate the jobs offered. The company first ranks the job using point assessment, which evaluates the monetary value of a position. They then analyze the jobs in terms of external market to determine the rate for the particular position (Shields et al, 2015). This helps the company in determining the rate for a new hire in the market. Imperial Oil also have Checklist and weighted checklist for analyzing the performance of its employees. It is both expensive and lengthy process of job evaluation (Taticchi et al, 2015). However, it helps them identify the overall performance of their employees performance for a particular time span. External Equity Imperial Oil conducts standard compensation survey for identifying the compensation package offered for the similar position in the similar companies. It is to identify the industry standard and market rates to establish a fair compensation package for their employees and competitive reward strategy (San, Theen Heng, 2012). The company purchases the annual reports of similar companies in the market to analyze and establish external equity. The data they use in the process are base salaries, increased amount, salary range, merit increases, incentives, allowances, working hours and educational requirements (Taticchi et al, 2015). Imperial Oil uses these data to set their job requirements and salary for each positions. It helps them to position themselves in one of the leads in the operation market. They are now hiring students from universities, colleges of gaining competitive advantage in the market (imperialoil.ca, 2017). They provide salaries to their new employees considering thei r knowledge and market pricing for the position after aligning these with their internal equity. The compensation mode set by the company can be divided into three segments that are basic pay, incentives and other compensation. These vary according to the position and performance of the employee. Fr example, the vice president of the company Mr. Redburn received $733,374 as base pay, $501,767 as incentives and $60,241 as other pay for the calendar year 2016 (Salary.com, 2017). Benefits Imperial Oil established a number of policies for ensuring the safety of their employees in both working in the facilities or outside the facilities. They also provide training on safety to the employees to work efficiently and avoid unwanted circumstances. The employees are incorporated to take the responsibilities for ensuring the workplace safety. They further provide training to their newly hired employees to fill them with knowledge about roles and responsibilities they have in their appointed position. The working hour for every employee working in Imperial Oil is set at eight. However, the employees are encouraged to perform over time duties in exchange of bonus. However, they make sure to limit every employees over shift to avoid exhaustion of the employees. Furthermore, every Imperial Oil facilities are provided with parking facilities, meals with pay for their employees. The company also provides several benefits such as pension, health and dental, out of province emergency health coverage, life insurance and accident insurance claims to each of their employees. The expenses are shared both by the employee and the employer as they both contribute a portion of the premium invested in the insurances (mobil1.ca, 2017). Effectiveness of Compensation System The company has a basic pay structure for all its employees and has compensation pay on the amount of overtime they are performing. Moreover, they have appraisal system based on both tenurity and performance. These appraisals are individual based on individual performance. This is to satisfy the employees need and ensure job satisfaction to retain them. The following compensation efficiency scale reflects the satisfaction level of the employees either working or recently worked in the company. This will in turn help the management to revise their compensation system and make it more capable for competing in the market. Compensation Efficiency Scale Question 1 2 3 4 5 Is the compensation survey effective? Is Factor comparison method is effective in case of Imperial Oil? Is checklist and weight checklist method for performance analysis effective? Is the compensation model efficient? Is the benefits provided are justified? The standard compensation survey utilized by the company is considered as the most efficient in the market. However, it is also cost inefficient, which needs revision. Factor comparison method utilized by the company is helping them in successfully maintaining their internal equity. The checklist analysis method is serving the company well in identifying employee performance and provide appraisal to the employees. However, it is too expensive for the company to maintain. Compensation model on the other hand is successful in satisfying the employee needs. Benefits on the other hand can be modified by providing free meal to the employee. They can adjust the money with the base pay accordingly. It will save money for both company and the employees (Boone Boone, 2012). Recommendation The Factor comparison method utilized is considered is effective, but costing the company a huge amount of money. Hence, they can shift to custom survey, which has similar potential with low costing. Moreover, the checklist and weight checklist method for tracking employee performance is both lengthy and costly for the company. However, in a company like Imperial Oil, it is important for having accurate knowledge over employee performance, which cannot be compromised. However, they can modify their compensation model and benefits. They can provide free meal to their employees changing their current meal with pay. They can adjust the costing with the employees basic pay. This will benefit both the company and employee as it will cost less for the company to purchase huge amount of meal form the caterer, whereas, the employees need to pay the market rate for the meal. The overall compensation and benefit model however is efficient in providing benefit to the organization and to the emp loyees. References Boone, H. N., Boone, D. A. (2012). Analyzing likert data.Journal of extension,50(2), 1-5. San, O., Theen, Y., Heng, T. (2012). The reward strategy and performance measurement (evidence from Malaysian insurance companies).International Journal of Business, Humanities and Technology,2(1), 211-223. Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., ... Plimmer, G. (2015).Managing Employee Performance Reward: Concepts, Practices, Strategies. Cambridge University Press. statista.com. (2017).Imperial Oil employee number 2008-2016 | Statistic. Retrieved 28 November 2017, from https://www.statista.com/statistics/566599/number-of-employees-at-imperial-oil/ 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. Salary.com, (2017).IMPERIAL OIL LTD Executive Salaries Other Compensation | Salary.com.Salary.com. Retrieved 7 December 2017, from https://www1.salary.com/IMPERIAL-OIL-LTD-Executive-Salaries.html mobil1.ca (2017).Imperial Oil benefits. Retrieved 7 December 2017, from https://www.mobil1.ca/Canada-English/Files/InTouch_Newsletter_Feb_2011.pdf imperialoil.ca. (2017a). Imperial. history Retrieved 27 November 2017, from https://www.imperialoil.ca/en-ca/company/about/history/our-history imperialoil.ca. (2017b).Careers. Retrieved 27 November 2017, from https://www.imperialoil.ca/en-ca/careers/careers