Emerging Pharmaceuticals is a successful firm based on the West Coast of the United States. However, it has been facing strong competition from Medtronic Pharmaceuticals. Significantly, the company has been losing talents to its competitor. As such, it is vital to assess and review the company’s current total rewards system to determine necessary changes that will ensure employee retention and cost controls. This paper compares its reward system with that of Medtronic and suggests appropriate changes.
Total Rewards Analysis: Parts D–F.
Emerging Pharmaceuticals is a successful firm based on the West Coast of the United States. However, it has been facing strong competition from Medtronic Pharmaceuticals. Significantly, the company has been losing talents to its competitor. As such, it is vital to assess and review the company’s current total rewards system to determine necessary changes that will ensure employee retention and cost controls. This paper compares its reward system with that of Medtronic and suggests appropriate changes.
Part D: Misalignment, differences, and gaps
Emerging Pharmaceuticals reward system is a multifaceted strategy that emphasizes on the employee value proposition. It encompasses exposing the employees to challenging work, creating opportunities for career development and offering competitive pay. Despite this robust reward system, the firm’s employees are concerned about health plan costs and selections, 401(K) plan issues, working hours and inadequate career development opportunities. Emerging Pharmaceuticals has two health plan alternatives for its employees i.e. value preferred provider plan (Value PPO), and the Choice plus Preferred Provider Plan (Choice+ PPO). The former has higher out-of-pocket costs and lower bi-weekly costs than the latter. The inconsistency in health plans is a concern for some employees. In addition, the company did not a 401(K) for many years. When the plan was introduced three years ago, to contributions did not include previous years.
While the company have work-life balance benefits such as paid leave, holidays, minimal remote opportunities and tuition assistance, the plan is inadequate to address the long hours of work and lack of career growth opportunities (Anthony & Weide, 2015). As a result, employees leave Emerging Pharmaceuticals for better health plan, 401(K) and work-life balance opportunities. By comparison, Medtronic Pharmaceuticals have a more comprehensive reward system for the employees. Some of the benefits available to Medtronic employees include grand prize travel package, custom NIKE shoes and fitness packages for selected employees every month. The company’s healthcare plan includes a dental care plan. Also, Medtronic have a 401(K) plan which is consistent among all the employees. It also includes a stock purchase plan. These issues are responsible for the exodus of employees from Emerging Pharmaceuticals to Medtronic. In this case, Emerging Pharmaceuticals must do more to enhance their reward system to minimise the employee attrition rate.
Part E: Emerging Pharmaceuticals rewards components that should be increased, reduced, or stay the same
From the Emerging Pharmaceuticals case study, it is evident that salary and financial bonuses are not the reason why employees are shifting to its competitor. While salaries and financial bonuses should stay the same, the company should consider increasing opportunities for career development, health plans and 401(K) plan. Employees seek to have financial security in their future and achieve their career objectives. In this regard, expanding the path for career development could convince employees to stay longer at the firm (Anthony & Weide, 2015). In addition, increasing contribution rate from the current 1.75% to around 2% of the pre-tax income will increase the savings for their future and guarantee them a better financial security.
Currently, the health plan only covers discounts for the medicines that employees can access. There is no sufficient cover to reduce medical expenses among employees’ family members. In this case, the company should expand health plan to include employees’ families and other services such as dental care. According to Bharath (2021), employees are motivated with affordable and accessible health plans for them and their families. Though employees are motivated by challenging tasks, it is important that these tasks are planned within certain work hours. In addition, the company should include benefits such as paid leave, paid maternity and paternity leave and so on. Employees need a better work-life balance to attend to family and other social activities. Work-life balance could also reduce the opportunities for burnout among them (Rahman, 2020). In this case, I recommend reduction in work hours at the company.
Part F: Population affected
The proposed changes at Emerging Pharmaceuticals will cover all employees within the company. However, the most impacted categories of employees will be the younger and more ambitious. For instance, the company has 15,000 full-time employees of which 2,640 are below 30 years of age while 10,018 are between 30 and 50 years of age. These two groups of employees still have many years to grow their career and build their wealth plan with the company. As such, the proposed changes would have significant impact on their decisions to stay longer with the Emerging Pharmaceuticals. In addition, 4,375 professionals at the company need an assurance that the reward offer at the Emerging Pharmaceuticals will be better than at its competitors in the long-term. Since professionals are often in high demand in the market, they can be swayed to stay at Emerging Pharmaceuticals due to improved health plan, better work-life balance and new opportunities for professional development. In addition, they will access better health plan that include more care services and inclusion of their families.
In a nutshell, the success of the Emerging Pharmaceuticals’ reward system depends on the total benefits and comprehensiveness compared to that of the competitors such as Medtronic. In this regard, Emerging Pharmaceuticals should improve the system by expanding career development opportunities, 401(K) plan, and health plan and work-life benefits.
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- Mourine Atsien (Autor), Total Reward Analysis, Múnich, GRIN Verlag, https://www.grin.com/document/1326041
