Final answer:
The key component of a compensation plan for an employer who believes in paying people for their contributions would likely be a performance-based incentive system, possibly in conjunction with health benefits, retirement and savings plans, and legally required coverages.
Step-by-step explanation:
As an employer who values paying people for their contributions to organizational results, a key component of the compensation plan would be a performance-based incentive system. This system would align employee rewards with their individual contributions to the company's success. Factors such as productivity, efficiency, and the quality of work performed could serve as metrics for determining bonuses or additional pay. For unionized workplaces, such a compensation plan may also encourage investment in machinery to enhance productivity while managing labor costs.
It is essential that the compensation plan includes not only base wages but also supplemental pay, health benefits, retirement and savings plans, as well as coverage for legally required items like Social Security, unemployment, and worker's compensation insurance. The combination of these elements ensures that employees receive fair compensation that reflects their efforts and supports their well-being and financial security.