How does the Market Influence Maersk Compensation Philosophy?

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OL 211 5-3 Final Project Milestone 4
The Compensation Philosophy of Maersk
Maersk’s compensation philosophy is based on performance and fluctuates annually depending on its profit margins and overall performance. The policy is captured on a comprehensive document created by the company’s human resources together with the departmental managers to guide the employee compensation process. The compensation philosophy explains the extent to which the company values its employees. It explains how the company rewards its employees in relation to the existing market prices. The company has developed specific agreements and policies regarding the incentives and benefits that the employees are entitled to earn.
Maersk’s compensation philosophy has various components, including the remuneration of the management board, both short and long-term cash incentives, stock options, and discretionary benefits. The management board members are remunerated by having fixed base salaries. Besides, each member is entitled to certain incentive compensations involving cash. The firm uses short-term cash incentives to motivate hardworking staff members. However, because of its dependence on the market value, the compensation policy keeps changing with the market value changes. The company increases its remunerations whenever its profits increase. This increase signifies positive market dynamics. On the other hand, the company reduces its benefits whenever the market dynamics turn out to be negative.
Purpose of Salary Surveys
Salary surveys are types of research that companies conduct to determine what other organizations pay their employees for comparable job ranks. Human Resource Managers (HRMs) use these surveys as benchmarks against which they compare or develop their company’s compensation structure (Mayhew, 2021). The process has its advantages and disadvantages. Therefore, it is important for managers to assess the strengths and weaknesses of the given survey process before implementing it. These surveys are conducted to compare employee salaries at the departmental level, between organizations, based on the job description, or based on geographic locations. They are designed to ensure that the employees receive fair and competitive wages.
Salary surveys have immense value to the organization that uses them. One of the benefits is that it helps the company determine it...