Compensation Plan Outline: Under Armour Inc.
Assignment 2: Compensation Plan Outline
Due Week 8 and worth 300 points
Use the University of Baltimore Library to research a publicly-traded company for which you would like to work, then evaluate the company’s compensation plan to determine how it could be improved. (the company I have chosen in Under Armour Inc.)
Write a six to eight (6-8) page paper in which you:
Evaluate the existing compensation plan to determine if it is the most appropriate for your company. Explain your rationale.
Determine the most beneficial ratio of internally consistent and market consistent compensations systems for the company you selected.
Evaluate the current pay structure used by your company and assess the recognition of employee contributions.
Make two (2) recommendations for improving the effectiveness of the discretionary benefits provided by the company you selected.
Evaluate the types of employer-sponsored retirement plans and health insurance programs provided by the company you selected and compare them to that company’s major competitors.
Use at least three (3) peer-reviewed references. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name (Esther Emami), the professor’s name (Professor Jeffrey Weaver), the course title (MGMT 415), and the date (October 25, 2020). The cover page and the reference page are not included in the required page length.
Under Armour, Inc.
Esther Emami
MGMT 415
Professor Jeffrey Weaver
October 25, 2020
Introduction
Under Armour, Inc. is a sports equipment company that manufactures a wide variety of both casual apparel and sports, such as footwear, athletic gear, and accessories (Under Armour, Inc., 2020). Their company is well known in the international markets and is one of the most popular sports brands in the world. Although the company had inspired solutions for sports performance and needs of athletes, is their compensation program for their employees to match their mission for their customers, which states "Under Armour Makes You Better" (Under Armour, Inc., 2020). In this paper, the compensation program of Under Armour, Inc. including the performance incentives, health benefits, life insurance, retirement benefits, stock purchase plans, holiday pays, and leaves will be discussed. Additionally, to fully understand the extent of their compensation program, this paper will compare their compensation plan with its leading competitors including Nike and Adidas. Lastly, this paper will discuss two improvements in the compensation plan to improve the individual performance of the employees to better meet company goals.
Existing Compensation Plan of Under Armour, Inc.
Base Salary
In the United States, Under Armour employees around different physical stored reported to have received payments on an hourly basis that ranges from an average of $9.31 per hour for team associate job descriptions up to $32.40 per hour base salary for their Store Managers (Average Salaries at Under Armour, Inc, 2020). Since there are other departments in Under Armour, including fashion designers, software engineers, demand marketing analysts, and human resource partners, these employees have a different range of salary depending on specialization (Average Salary for Under Armour, Inc. Employees, 2020).
Health Benefits
Under Armour, Inc. has many health and well-being packages for its employees. This is to ensure the safety and continuous high performance of the employees. Specifically, the company generally categorizes health benefits into three segments, (1) medical and prescription drugs, (2) dental benefits, and (3) vision (Benefits at Under Armour, n.d.). In the medical and prescription drug section, Under Armour give its employees an option to choose among their medical plan the fittest for their needs. The medical and drug plan is deducted from the employee paycheck and the company automatically contribute to the health saving account of the employee (Benefits at Under Armour, n.d.).
Depending on the medical option the employee chooses, the higher the premium the higher the deduction from the employee paycheck. Higher premiums had more advantages in their health care expenses as they will receive higher compensation from the company. In the dental section, the employee can choose two plans where the higher plan will include the dental plans of adults and children (Benefits at Under Armour, n.d.). In the vision section, the plan covers eye exams, glasses, and more vision-related issues (Benefits at Under Armour, n.d.).
Insurance Programs
Under Armour also consider the unexpected financial problems because of unexpected circumstance that can partly or permanently affect the physical well-being of the employee. The company includes life, accidents, and disability insurance. The company does not deduct insurance bills on base salary but is automatically covered from the date of hire. For full-time employees, the basic life and accident insurance can reach up to $1,000,000 depending on the position, while part-time employees can receive $10,000 (Benefits at Under Armour, n.d.).
Retirement Plan
The company uses a 401(k)-retirement plan, which is a long-term retirement and investment plan for those who are qualified. The 401(k) plan allows the employee to place part of their salary to invest in the company (Benefits at Under Armour, n.d.). The earning from the 401(k) that is tax exempted until the employee withdraws the money (Cussen, 2020).
Stock-Based Compensation for Employee Performance and Contribution
Performance goals are awarded by the company with cash or stock-based awards, but stock-based awards are more elaborated for long-term incentives (Under Armour, Inc.
Executive Incentive Compensation plan, 2013). The committee will determine those who are eligible for the awards in a one-year employee evaluation to see if the employee had reached the performance goals set by the company. The awards are given once per year after the evaluation. However, the performance requirement for the incentives is not consistent with all employees as different terms and conditions will apply to different participants. Thus, the conditions of the incentive are not the same for all and Under Armour has no obligation to make uniform treatment of the employees for performance incentives (Under Armour, Inc. Executive Incentive Compensation plan, 2013). The company also allows its employees to purchase stocks from the company with appropriate discounts if the committee reviewed the employee qualifications. The payment will be deducted from the payroll of the employee (Benefits at Under Armour, n.d.).
Holidays and Leaves
Under Armour gives at most 11 days of paid holidays for their employees per year. Additionally, the company provides situational leaves to their employees including family medical leaves, maternal leaves, military leaves, etc. Employees that will apply for maternity leaves can get 8 weeks of fully-paid time off from work (Benefits at Under Armour, n.d.).
Insurance and Retirement Comparison: Nike and Adidas
Adidas
Adidas is a multinational corporation that was founded in Germany that also manufactures sportswear apparel, including footwear, clothing, and sports accessories (Adidas, 2020). Adidas is currently the second leading sports brand in the world (Statista Research Department, 2020). In the retirement plan, Adidas also use the 401(k)-retirement plan in the United States, while they use the Adidas Pension Plan in Germany (Adidas, 2020). Adidas used the same 401(k) retirement plan in the US where the employee diverts part of thei...