COMPENSATION

MANAGEMENT

Presented By:
Priyanka
Priyanka Sengar
 SITUATION
• Frank works 25 hours per week for a mail order firm in the
packaging department. He recieves no benefits other than
those required by law. Frank does the same work as three
other employees all of whom work full time. These
employees qualify for pensions, medical care, long term
disability, chid care etc.. Is tis ethical? Assume that Frank
would like to work full time, really wants to receive benefits,
and feels harmed because of his shortfall. On the other
hand, the firm is not legallyu required to pay Frank benefits,
Frank only works part time, and it would be expensive to pay
benefits to all part time employees, including Frank.
 EXPLANATION
• The firm has set separate compensation plan
for the full time and part time employees.
• Hence they have no legal allegations to give
Frank the benefits as that given to the full time
employees
• Compensation ethics are the rules, standards,
or principles that provide guidelines for morally
correct behavior, and for truthfulness in the
remuneration and reward of employees.
 contd
• Ethics are beyond the compliance of the law.
• Both employees and the public expect firms to
adhere to standards that represent a strong sense of
fair play and a consideration of the interests of
multiple parties, including employees, customers,
and the community.
• In some cases the managers do more than the law
requires in compensation out of the sense of fairness
or it provides some long term benefit to the firm.
• In this situation, Frank‘s issues are needed to
be catered to.
• The firm can assure Frank that his performance
will be reviewed for a certain time period and
then he can be appointed as the full time
employee.
• The firm can also communicate to all of its part
time employees that if they perform as good as
the full time employees they will be considered
to be appointed as full time employees.
• The firm needs to make general statements
about its commitment to ethical
compensation practices.
• The policy should develop a list of behaviors
deemed unethical.
• Employees need a procedure to report
unethical behavior or to discuss ethical
problems.