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HRM-635 Topic 7 DQ 1

Sample Answer for HRM-635 Topic 7 DQ 1 Included After Question

Identify and explain two elements of the total compensation package that promotes organizational competitiveness that attracts and retains employees. 

A Sample Answer For the Assignment: HRM-635 Topic 7 DQ 1

Title: HRM-635 Topic 7 DQ 1

In order to create a desirable organization where employees feel valued and motivated, employers must pay attention to what appeals to both current and potential employees. A key aspect of this is offering a competitive total compensation package. Total compensation refers to the complete pay package awarded to employees on an annual basis, which includes not only the base salary, but also all direct and nondirect compensation such as healthcare and retirement benefits, incentive pay, and paid time off (SHRM, 2021). This comprehensive approach to compensation ensures that employees are not only fairly compensated for their work, but also enjoy a range of benefits and perks that contribute to their overall wellbeing and job satisfaction. 


Competitive wages and health-related benefits are a common item of interest but that is not the only source of appeal for employees (Dessler, 2018, pp. 419-423). One effective way to attract potential employees to an organization is by offering a range of benefits that cater to their needs. Flexible scheduling, for instance, can allow employees to balance their work and personal life more effectively. Pensions and life insurance provide a sense of security for their future, while paid time off offers the opportunity to recharge and maintain a healthy work-life balance. These benefits are not only attractive to employees but also demonstrate that the organization values their well-being and is committed to their long-term growth and success.  


In summary, a competitive total compensation package is a crucial factor in creating a desirable work environment and retaining top talent. Employers who pay attention to these aspects of compensation will be well-positioned to attract and retain employees who are motivated, productive, and dedicated to the success of the organization. 



Dessler, G. (2018). Human resource management (16th ed.). Pearson. 


SHRM. (2021, July 27). Total compensation. https://www.shrm.org/resourcesandtools/tools-and-samples/hr-glossary/pages/total-compensation.aspx 

According to Dessler, benefits are indirect financial and non-financial payments employees receive for their employment with the company and which employees use to attract, recognize, and retain workers. (Dessler, 2020) Employees tend to gravitate to companies that offer the greatest benefits and work life balance for themselves and their families. The total compensation package with my organization is a big deal because it offers a lot of perks that a lot of companies do not. We receive our PTO days on January 1st(20 days with less than 5yrs of service, I receive 27 and buy 5 more days with 10 years of service), new hires receive a prorated amount of days based on the day they are hired during that calendar year. While we do not have the traditional sick and personal leave PTO banks,  because we do not accrue our time, we are able to buy up to 5 additional days and can we use all days whenever we choose as long as the day is not available. Another element of our total compensation package is benefits(medical, dental, vision, life etc) start day 1 of your employment as long as you sign up for them. There is no 60 or 90 day waiting period for any benefits to start. It is typically standard for there to be a waiting period for benefits to start but my employer offers benefits and PTO days as soon as you start your employment. Those benefits are highly attractive to job seekers and to top it off we receive a pension and are fully vested after 3 years of service.  


Dessler, G. (2020). Human resource management (16th ed.). Pearson/Prentice Hall. ISBN-13: 9780135172780 

The two main components of the compensation package that promotes organizational competitiveness that attracts and retains employees are direct financial payments (wages, salaries, incentives, commissions, and bonuses) and indirect financial payments (financial benefits like employer-paid insurance and vacations (Dessler, 2020).   

The direct financial payments consist of wages, salaries, incentives, commissions, and bonuses. This form of payment is based on the employee’s job responsibilities and performance, as well as competency and experience. This form of compensation is an advantage and is more favored amongst employers since it motivates employees to improve their performance. The downside is that this can be expensive especially when the employee is not the right fit. Indirect financial payments are received in the form of vacations, memberships, retirement plans, and employer-paid insurance. Though these incentives might appear attractive to employees, it does not have the same impact as direct compensation.     

My organization offers both direct and indirect compensation packages. However, certain aspects of both affect how they are received. For example, as stated earlier, the monetary value is received differently. Direct compensation is earned as salaries, wages, etc, whereas indirect compensation is memberships, vacations, and retirement plans. Experience is another component that varies by compensation. With direct financial payments, employees who excel in their performance receive a bonus or increase in pay. An example of this would be when my organization offers bonuses at the year for meeting or exceeding organizational goals for the year. On the other hand, indirect financial payments might not be received after a few months or years with the company. An example of this would be when my organization allows for an employee to establish a retirement plan after two years with the company.    


Dessler, G. (2020). Human resource management, 16/e (16th ed.). Pearson Education  

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