Strengths Of Employee Compensation

Compensation
As per Martocchio (2017), “compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs and for their membership as employees” (p. 3). Therefore, compensation structures should achieve three objectives: attract top talent, motivate employees to perform at a high level, and boost employee retention rates (Kulik, 2004). In the business development sector, all three goals are vital to maintain a competitive advantage and increase market share. For example, the fifty largest business development corporations only accounts for twenty-five (25) percent of the industry’s total revenue (Zacks Equity Research, 2017). Thus, to achieve these objectives and maintain a competitive advantage,

Nonetheless, unlike numerous competitors, merit pay business development entities should be conducted on quarterly basis, which will award nonrecurring merit increases (Martocchio, 2017). Nonrecurring merit increases (i.e., lump sum bonus) contains the employer’s cost burden (Martocchio, 2017). For example, a five (5) percent increase on a one hundred (100) thousand dollars base salary, once a year, for ten (10) years will increase to the base salary of that individual to almost one hundred sixty-three thousand dollars, plus payroll taxes and other corresponding expenses. That is, the increases over that period of time would be permanent and compounded (Martocchio, 2017). On the other hand, a 1.25 percent quarterly lump sum bonus to the employee will produce an extra corporation expense of fifty thousand dollars over ten (10) years and maintain the base salary cost at one hundred (100) thousand dollars, without accounting other types of increases or incentives (e.g., cost-of-living adjustment, modifying pay grades, etc.). Moreover, the employee will notice and be impressed with a lump sum bonus check of $1,250, instead of a biweekly, year-end, recurring merit pay increase of approximately