OL 211 Milestone Four -Compensating employees

Compensating Employees Name: Instructor: Institution: Date: The success of a company is in most cases dependent on the efficiency of its human resource department. The human resource department implements the necessary strategies that would ensure the workforce performs to the expected standards. There are some ways to motivate employees, one being the embracement of a compensation philosophy. Society of Human Resource Management [S.H.R.M.] defines a compensation philosophy as "a formal statement documenting the company's position about an employee."(S.H.R.M., 2015).The compensation philosophy at Maersk is determined by the firm's overall goals. Maersk has a performance-based compensation philosophy. This, however, excludes the members of the company's board of directors, who receive a fixed fee (Maersk, n.d.).Through this procedure, the company keeps in line with the rules and regulations as per the Danish Companies Act Section 139.The Act dictates that a company's board must meet first of all implement the guidelines for paying incentives to the management and the directors, before entering into any contract about incentive pay (Maersk, n.d.).There is a fixed annual fee for the members of the management board are entitled to. Apart from this fixed incentive, these individuals are also entitled to additional incentive compensation in the form of cash, as determined by their performance. This also plays a role determined by the markets, since the incentive compensation is dependent on the profits that the company makes at the end of the year. It, therefore, depends on the decisions that the board will make after the analysis of the annual financial reports, about the financial position of the company. It is simple; when the market is right, the sales and profit margins will be higher. This will mean that there will be higher compensation margins as well (Maersk, n.d.).The o...