HRM 5400 Module 5 Written Assignment: Benefits and Pay for Special Groups Example

Beyond Salary: Benefits and Special Groups at Brightwater Systems

Student Name

Master of Science in Human Resources Management, Thomas Edison State University

HRM-5400: Lifestyle Benefits and Compensation in the New Millennium

Mentor Name

Month Day, Year

Beyond Salary: Benefits and Special Groups at Brightwater Systems

Introduction

Benefits are compensation that employees often undervalue and employers often underestimate. Milkovich et al. (2014) argue that benefits should be designed with the same strategic logic as cash pay: what the organization wants to achieve, what employees value and what it costs. This assignment applies that logic to Brightwater Systems, then addresses three groups the standard structure does not fit.

Health Benefits

In 2024 the average premium reached $8,951 for an individual and $25,572 for a family, with employees covering part of each (Kaiser Family Foundation, 2024). Brightwater pays 80 percent of the premium for one preferred provider plan. Its workforce is young, but a growing share of employees are starting families. Brightwater should keep its PPO and add a high-deductible option with a health savings account seeded by the company at $1,000 for individuals and $2,000 for families. Choice lets employees match coverage to their needs, and the contribution makes the lower-premium plan attractive.

Retirement and Leave

Brightwater's 401(k) matches 3 percent of pay. Competitors in technology commonly match more, and retirement benefits matter more to the experienced engineers the company most wants to keep. Raising the match to 100 percent of the first 5 percent and adding automatic enrollment would cost about 1.5 percent of payroll. New Jersey's family leave insurance already replaces part of wages during bonding leave; Brightwater should top this up to full pay for 12 weeks, a benefit that costs little relative to the turnover it prevents among new parents.

Flexible and Lifestyle Choices

Employees value different things at different life stages. A lifestyle spending account of $1,200 a year, taxable but usable for fitness, learning, home office equipment or child care, gives each employee a benefit they will use and costs less than adding several fixed programs. This choice-based design will be developed fully in the final project.

Special Groups

Sales Representatives

Brightwater's twelve account executives sell multiyear contracts to utilities. Their pay should combine base salary with commission at a 60/40 mix, a common split for complex sales with long cycles, with commission paid on signed contract value and a portion held back until the customer's first payment, so that sales that do not convert are not rewarded.

Contract Developers

The company uses about 25 contract developers through agencies. They should be paid at market rates through the agencies, and Brightwater must manage them as contractors, without the control of hours and methods that would make them employees under the Fair Labor Standards Act and New Jersey's strict test for independent contractors.

The Krakow Team

Brightwater employs 18 developers in Krakow through a Polish subsidiary. Their pay must follow Polish law and market rates, and their rewards should reflect local expectations. Trompenaars and Hampden-Turner (2012) describe seven dimensions on which cultures differ, including universalism versus particularism, individualism versus communitarianism and achievement versus ascription. The United States sits near the individualist and universalist ends of these dimensions, and Krakow managers report that their developers place more weight on team results and on relationships with their own leads, which argues for keeping team bonuses and recognition of the group prominent in the Krakow plan, and for applying the company's equity grants consistently, since visible fairness across locations affects how the team perceives its place in the company.

Conclusion

Brightwater's benefits can be made more valuable to employees at modest cost by adding health plan choice, a stronger retirement match, paid parental leave and a lifestyle account. Sales staff, contractors and the Krakow team each need pay designed for their work, law and culture, within the same strategic framework.

References

Kaiser Family Foundation. (2024). 2024 employer health benefits survey. KFF.

Milkovich, G. T., Newman, J. M., & Gerhart, B. (2014). Compensation (11th ed.). McGraw-Hill Irwin.

Trompenaars, F., & Hampden-Turner, C. (2012). Riding the waves of culture: Understanding diversity in global business (3rd ed.). Nicholas Brealey.