Final answer:
The third step in developing a total compensation package involves ensuring that the overall compensation, including base pay and benefits, aligns with the costs incurred by workers in their activities, with renegotiation possible after 6-12 months. Health benefits and other perks should complement the wages as part of this comprehensive strategy.
Step-by-step explanation:
In the context of developing a total compensation package, the third step typically involves evaluating and finalizing the components of compensation that align with the principle that 'people should be rewarded according to the costs they incur in their work activity.' This step ensures that benefits such as health insurance, vacation pay, supplemental pay, and retirement savings are adequately addressed in conjunction with the base wages or salaries which make up about three-quarters of the hourly compensation for private industry workers. It also recognizes the potential for renegotiation after 6-12 months from the start, addressing concerns such as low initial pay and the evolving needs of both the employer and the employee.
Compensation Analysis and Strategy
Analyze wages and salaries alongside benefits like health benefits, retirement and savings plans, and legally required contributions to develop a total compensation strategy that is aligned with market standards and the organizational goals. During the analysis, consider external factors such as economic trends, digital transformation impacts—as seen with the U.S. Postal Service example—and the competitive landscape within the industry.
Remember to reinforce the importance of transparency and fairness in any compensation package, taking into account factors such as experience, education, skill, and the presence of discrimination. This balance is crucial to maintain a motivated workforce and ensure long-term viability.