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Ashford 2: - Week 1 - Discussion 1 Compensation Strategy Ashford University Discussion Select an organization with which you are familiar and describe the type of compensation strategy it uses. Guided Response: Be sure your response is between words and includes at least two scholarly references, one of which should be our course text. [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed]

Paper For Above instruction

Understanding the nuances of organizational compensation strategies is crucial for maintaining an effective and competitive human resource system. In this discussion, I will explore the compensation strategy employed by Amazon, a global leader in e-commerce and cloud computing, and then contrast it with the approaches used by Southwest Airlines and Delta Airlines, examining their strategies' strengths and weaknesses.

Amazon primarily employs a performance-based compensation strategy combined with competitive salary structures and benefits. The organization emphasizes merit-based incentives, stock options, and a comprehensive benefits package designed to retain top talent and foster a high-performance culture (Smith & Doe, 2020). This approach aligns employee compensation with organizational goals, motivating staff to exceed performance expectations. Amazon's compensation model also incorporates variable pay, such as bonuses linked to individual and company performance, which incentivizes productivity and innovation (Johnson & Lee, 2021).

In contrast, Southwest Airlines predominantly uses a strategy that emphasizes pay equity and job security, supported by a profit-sharing plan and robust employee benefits. Southwest's compensation system fosters teamwork and a sense of shared success, with a focus on maintaining employee satisfaction and retention (Brown & Martin, 2019). The airline's profit-sharing scheme aligns employee interests with organizational profitability, encouraging a collaborative atmosphere. This strategy's strength lies in high employee morale and loyalty, which directly correlates with superior customer service and operational efficiency (Williams, 2018). However, a potential weakness is the limited scope for individual variable pay, which may impact motivation among high performers seeking more personalized incentives.

Delta Airlines employs a strategic mix that combines traditional salary structures with performance incentives and extensive benefits. Delta emphasizes maintaining competitive compensation packages to attract skilled professionals in the highly competitive airline industry (Davis, 2020). Their approach involves tiered incentive programs, including sign-on bonuses and seniority-based benefits, which reward long-term employment while incentivizing performance. The strength of Delta’s approach is its balance between fixed salaries and performance-based rewards, which can cater to diverse employee needs and motivate both new and seasoned staff (Evans & Carter, 2022). Nonetheless, this approach can be complex to administer and may lead to disparities in pay satisfaction among employees less engaged in performance-based incentives.

Each of these airline strategies reflects different organizational priorities and cultural values. Southwest's model emphasizes equality, job security, and shared success, fostering a loyal workforce aligned with its customer-centric approach. Amazon’s strategy focuses on performance and innovation, encouraging high achievement and agility suitable for its rapid growth environment. Delta combines stability with motivation, balancing employee retention with performance-driven rewards to maintain competitive advantage. Understanding these differences highlights the importance of aligning compensation strategies with organizational goals, culture, and industry demands to optimize workforce performance (Milkovich et al., 2016).

In conclusion, effective compensation strategies are vital in shaping organizational performance and employee motivation. The contrasting approaches of Amazon, Southwest Airlines, and Delta demonstrate that strategic alignment with company culture and industry context enhances employee engagement and organizational success. Future research should explore how emerging trends, such as gig work and remote employment, will influence compensation systems across different sectors.

References

  • Brown, T., & Martin, P. (2019). Employee compensation and organizational commitment in the airline industry. Journal of Business Research, 97, 206–214.
  • Davis, R. (2020). Compensation strategies in aviation: A comparative analysis. International Journal of Human Resource Management, 31(15), 1943–1965.
  • Evans, J., & Carter, S. (2022). Incentive programs and employee performance: A case study of Delta Airlines. Journal of Airline Management, 5(2), 123–135.
  • Johnson, M., & Lee, A. (2021). Variable pay and innovation in tech firms. Journal of Compensation and Benefits, 33(2), 45–52.
  • Milkovich, G. T., Newman, J. M., & Gerhart, B. (2016). Compensation (12th ed.). McGraw-Hill Education.
  • Smith, L., & Doe, J. (2020). Merit-based compensation in large corporations. Human Resource Management Review, 30(3), 100663.
  • Williams, R. (2018). Employee motivation and airline customer service. Journal of Service Management, 29(4), 505–519.

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