Compensation Strategies Used By Coca Cola

Compensation Strategies Used By Coca Cola Name Institution Compensation Strategies Used By Coca Cola Compensation denotes the financial and non-financial benefits given to workers by their employers for completing the given assignments. Organizations use diverse policies in their reparation formats, which are affected by diverse interior and exterior forces. Reimbursement incorporates payouts such as windfalls, overtime payment, trade commissions and gratitude remuneration benefits (O’Brien & Kessler, 2014). This paper seeks to examine the compensation strategy employed by Coca Cola Company. Numerous external and internal forces guide the strategy employed by Coca Cola with trade unions playing the biggest role of these forces. Coca Cola Company has been selected owing to its strong financial capability in the market as well as its capability to adapt to the diverse financial trends in the market. Company Description Asa Candler founded the Coca Cola Company in 1892 in Atlanta Georgia. Since its inception, the company has been focused on the manufacturing and marketing of soft beverage drinks. The Coca Cola Company has grown tremendously to become the biggest manufacturer and retailer of soft beverage drinks in the world. The phenomenal growth of the company is linked to the adoption of different structural, strategic and the manufacturing of new products. In order to survive in the highly competitive market, Coca Cola has invested in the welfare of its employees. This investment has been in the form of various compensation strategies that have made the company one of the most lucrative to work in. The Coca Cola Company has a presence in close to 200 nations and boasts close to 130,000 employees. The Coca Cola Company has developed compensation benefits that are designed to reward employees for their steadfast sustainable commitment to the organization’s development. The compensation package developed by Coca Cola is aimed towards attracting the best talents to drive the company’s growth. The strategy is meant to ensure that there is an association between the compensation and the long-term goals of the company. One of the strategies employed in the recent past by the company is giving higher salaries for employees with perceived good performances. Apart from the high pay that most business executives enjoy, there is also the awarding of stocks, non-monetary compensation, reparation, and windfalls as well as the preference rewards. In the recent past, the company has been focused on ensuring that its employees are healthy, something that saw the company develop a compensation strategy towards the health of its employees. The company came up with a pilot program to motivate its employees to better their health by developing medical programs for its employees working at the head office in Atlanta. This was done by setting up a medical center where the employees would be tested for all probable diseases. The company met the payment for the tests in an attempt to ensure that its employees did not miss work for health related issues. Apart from enhancing the health of its employees, this compensation strategy helped in increasing productivity at the company as it meant that employees did not miss work for illness related issues. However, the biggest compensation strategy adopted by the Coca Cola is the use of performance-based pay to motivate productivity (O’Brien & Kessler, 2014). Even though the compensation strategies employed by Coca Cola have been hailed as the best in the market, they have faced a number of challenges. The biggest challenge for these strategies has been the opposition from labor unions for employees within the organization which feel that there is a big disparity between the top level compensation and the lower level employee compensation programs. In an attempt to bridge this alleged gap, the labor unions have been engaged in a protracted battle with the management, something that has paralyzed the company’s operations in some places. The labor unions have also been opposed to the company’s compensation strategy that employs the pay-for-performance formulae terming it unrealistic. However, the Coca Cola Company has maintained that the strategy is meant to encourage the top-level management to drive performance in the units that they head. The labor unions argue that the problem with this form of compensation strategy is that it drives the managers to impose unrealistic demands on the employees in the name of driving performance. Even after attaining the set goals, the top-level management ends up getting the credit in form of increased pay. This creates a scenario where the ordinary employees fail to get recognition for the role they played in meeting the company’s financial goals (Nyberg, Pieper & Trevor, 2013). Analysis of Coca Cola’s Compensation Practice Traditionally, wages and pay are determined through government regulation, determination of minimum wage, negotiation with the labor unions, as well as legal decisions. Despite these factors playing an important role in determining the level of pay, companies have in recent days been using performance based pay as an incentive to increase productivity. The motivation of individual employees is used by organizations as a way of raising job satisfaction as well as encouraging interpersonal relationships. The strategy is also used to lower absenteeism and reduce the turnover rates. This strategy is believed to create an enduring impression on an organization’s performance. Ideally, the performance based pay is either given to employees on top of the basic pay or as an increase to their existing pay. This can be done individually or as a group incentive plan. The individual performance-based bonus is usually a cash lump sum that is paid on top of the worker’s existing salary. Contrary to merit increase, bonus pay is not added to the gross salary (O’Brien & Kessler, 2014). This is the form of compensation str...