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American Express Company, also known as "Amex" is one of the most diversified financial services company globally. The company is headquartered at New York City. Amex was founded in 1850, and it is one among the 30 components in the Dow Jones index. Amex is best known for its quality products like credit card, traveler's card and charge card. The company's cards have accounted for around 25% of the total credit card transaction in United States.

Recruitment and Selection

The major part of the recruitment and selection process of the company is done via internet. Amex posts its jobs on its website asking applicants to email their resumes at the portal. The company also has its collaboration with various job portals for recruitment in different countries. The Human Resource division of the company looks at each resume for choosing potential employees. The company uses following methods for recruiting:

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Employment Agencies

Internet Recruiting (E-Recruiting)

Out of these e-recruiting has been the most powerful tool for the company. This method is also cheaper than conventional recruiting methods. Internet recruiting has also improved the company's ability towards handling job applications as well as job postings through minimizing paperwork along with automation of key recruiting activities.

Compensation and Training

There are 5 main heads under which the compensation plan of American express is divided (American Express Compensation Plan, 2010) This 5 heads are-

Health care plans

Retirement Savings plan

Life & Disability

Compensation

Unique Program & Service

Health Care Plans

Medical Plan

Dental Plan

Vision plan

Retirement Saving Plans (American Express Compensation Plan, 2010)

Life & Disability

Employee Life Insurance

Spouse/Domestic Partner Insurance

Child Life Insurance

Business Travel Accident Plan

Salary Continuation Benefit

Long Term Disability Benefit Plan

Compensation

Compensation consists of (American Express Compensation Plan, 2010)-

Cash Pay

Base Salary

Merit Increase

Lump Sum Salary Award

Other Salary Adjustments

Incentives & Special Awards

For Associates and Professionals

For Manager Level & Above

Long Term Incentive Awards(LTIAs)

Restricted Stock Awards(RSAs)

Unique Program & Services

Time off

Vacation Purchase plan-USA only

Parental Leave

Discounts

Travel Packages

Special Promotions

Education Personal Assistance

Now we had a detailed look at the total compensation strategy, this will help us answer all the questions of assessment in a better manner. (American Express Compensation Plan, 2010)

Assessment of Role of Compensation in an organisation

Step 1

Competitive Dynamics

Tackling Competition is a very important in any industry. It is the actual intellectual base of the company. Attrition rates are as high as 20% and poaching is always on mind of the competitors. American Express has structured its pay strategy very competitively so that there can be minimum poaching possible from the organisation. (American Express Compensation Plan, 2010)

Organization Culture/Values

American express has always been known for good team building. They have inculcated their values across the system and made sure that employees are happy so that they can serve at their best possible way to the customer.

Social & Political Context

With geographical diversified base and employee strength ever increasing it is now a whole circle that needs to be managed. Earlier few selected employees and personnel used to be the key to the success of the organisation. In an environment where companies have global presence it is very important that social & political context of the residing country is adopted. American Express has been known for keeping a very healthy look towards the social context of the country in which it is present.

Employee Needs

American express in its total compensation plan tried to make sure that all necessary needs of employee and its family are met with the compensation structure of the organisation.

Customization/Flexibility

American Express has been flexible in its total compensation plan. It is upon the choice of employee to exercise the plan that deemed fit to him/her. They have also got customised travel holidays for employees residing in USA.

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Union Presence

There is no union present in American Express.

Prominence of Pay in HR strategy

The kind of compensation plan that American Express follows, even without cash any heavy cash disbursement they have been able to meet all important needs of employees.

Step Two

American express have set and industry standard for others to follow. It can be easily said that compensation plans are one of the greatest objective of American Express

Organization is concerned with internal alignment as they have made sure that all critical expense of all the employees is structured in a similar manner.

They have maintained industry standards, although base salary is lower than other competitors in the same sphere but in total compensation they out par any competitor.

Yes special rewards and incentive schemes are present for all employees. Hence it can easily say that organisation considers efforts & contribution and reward them adequately.

Employees do not have any input accept the reimbursement bills for medical or similar expenses. The pay method is highly automated

Step Three

In a total compensation strategy compensation is based on different competitive levels of compensation. Performance based pay is a significant amount of pay for an executive officer. This policy helps in cutting down what is famously known as agency cost. American express has developed a very well integrated total compensation strategy and it is the one which has set example to follow in the industry

Yes it fit organizational external environment. It helps in keeping the employee glued to the company for a longer period of time. It reduces the attrition rates for the company

Organization mission is to develop key employee force which can serve the customer in the best possible manner. They have developed a good compensation plan which definitely keeps employees happy & performing.

Yes it does help in enhancing organizations overall success.

Part B: HRM Systems and Organization's Performance

Basically all functions in an organization are interdependent but HR is one such function which is very critical in the overall performance of the organization.

The role of HR is very important in any organization as it motivates people and designs the policies according to the needs and desires of the employees. Amex is best known for its quality products like credit card, traveler's card and charge card. The company's cards have accounted for around 25% of the total credit card transaction in United States.

With the increasing competition it becomes evident to provide proper training to the employees so that they can keep the place with the competitive environment, in US the credit card industry is varying day by day, due to this change the companies plan to become number one and after reaching the top position they don't want themselves to seen in another lower level. The HR department has a very important role to play for training and developing the team i.e. not only the sales team. They need to focus on all the levels of the teams like from top to bottom.

Generally, project team members are employees from functional departments within the parent organization. They are "borrowed" to work on a project, which can create a strain on all parties. (They have two bosses.) The Project Manager has to negotiate with functional department managers for the personnel needed for a project.

In addition to assembling project teams, the Project Manager must also motivate them to successfully complete the project. Motivating team members can be challenging, especially if functional managers control the employees' pay and promotion opportunities. The development and the training of the employees in Human Resource Management are apprehensive along with action which has the aim of increasing the individual performance and coordination in the team work in the company. Training and development basically consist of the activities which include education of the employees, providing proper training and also the development sessions for the employees.

The Training & the development is also required in sales department to increase the efficiency and the productivity of the sales department and the employees in the sales department. The HR manager can help the sales employees of the organization by conducting the training and development program for the sales employees. These programs can help the sales people to understand how to sell the products more efficiently, how to make effective cold calls to the prospects, how to convince the key customers so that they buy the products and services provided by the organization. If the HR department provides good training and the development to company's employees of sales department then the sales of the company can be increased significantly.

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Sales is important activity for all companies so it is quintessential to lay stress on it and train staff according to the changing environmental needs, training should be designed in such a manner that it helps to raise the sales by motivating the people and giving them the rewards and recognition in terms of target they achieve. Also, it becomes very important to train employees continuously according to the changing needs so that the organization remains competitive and here the role of HR is most important to provide the best training to its employees. As the competition is increasing, hence it has become very important to understand the needs of consumer and train the staff according to that which would help them to increase the overall sales of the company.

In a total compensation strategy compensation is based on different competitive levels of compensation. Performance based pay is a significant amount of pay for an executive officer. This policy helps in cutting down what is famously known as agency cost. This will insure that executive officer works in best interest of the shareholder, to whom he is an agent. This also ensures that salary costs are low in the case of downturn. It helps in reduction o cost without any drastic step. It reduces retention risk and that too at minimum cost to the shareholder and it also provides management a strong incentive to maximise shareholders value. The performance form of pay includes healthy bonuses, stock options and other incentive compensations. (Compensation Strategy, 2009)

'Personnel management' has developed into 'human resource management' over the years. This has happened because organisations are now not run by only the set of few people who calls all the decision. With geographical diversified base and employee strength ever increasing it is now a whole circle that needs to be managed. Earlier few selected employees and personnel used to be the key to the success of the organisation. With evolving times and unions of workforce becoming stronger it has evolved into Human Resource Management. Before developing a culture for an organization, it is very important to understand what culture actually means. Culture is all about dealing with your staffs rather than your customers. This leaves a very positive note on the minds of the staff as they feel respected and being cared. Professional approaches to the non-performing side of the organization were needed and clear accountability for all employees had to be established to ensure that all projects were properly staffed and completed on time and within budget.

Challenging cut throat competition, public relations & Human resource management (HRM) are becoming very critical for the financial industry and especially the companies like American Express. In this context it becomes very critical to make sure that employees all over the world are happy. It becomes very important as we add on our base of our employees that we start following a standard procedure for recruitment and selection. Recruitment and selection will be happening all over the world as organization is a MNC. The regions should be deciding when to recruit and where to recruit from. They are in best position to assess the capability of the work force in the region.

Minimum criteria for employees should be set from the global headquarters and that should be mandatory when selection procedure is done. After short listing the candidate on the basis of minimum criteria, the next stage of evaluation should be completely based on the requirement of the region and the desired profile that region is looking for. The legal framework of the country should be kept in mind when the compensation plan for the country is drawn and it should be stringent enough so that any loop holes are not left open. This will make sure that the regional division of the organization does not move into any kind of legal proceedings.