Case Application 11: IS IT MERIT OR NOT?

1 From the material presented in the case, how would you describe the basic
compensation philosophy of Cisco and AFLAC, respectively?
From the material presented in the case, Cisco and AFLAC have varying
compensation philosophies. Cisco Systems focuses on increasing base pay salaries
and considering annual pay increases. On the other hand, AFLAC, focuses heavily on
pay for performance while maintaining a low base pay.
2 What factors are affecting the compensation practices of both organizations?
Both Cisco and AFLAC are capitalizing on their respective compensation
practices to cut down labor costs while simultaneously making the company grow.
Although the companies greatly differ in terms of their compensation philosophies,
both companies aim to attract, hire and retain the best available talent for the firm.
3 If all things were equal, would you prefer to work in a Cisco type organization
where higher base salary and annual increases (assuming successful
performance, of course) dominate, or an AFLAC-type organization where base
salaries are lower but incentive pay based on performance can significantly add
to your total compensation? Explain your position.
If all things were equal, I would prefer to work on an AFLAC-type
organization where base salaries are lower but incentive pay based on performance
can significantly add to total compensation. Having AFLAC as an example, they offer
opportunities for employees to gain significant cash rewards, likewise considerable
benefits from stock purchase plans, tuition reimbursement for dependents, and child
care on campus. I personally think that these given benefits make work more
meaningful given the possible benefits of a successful performance.