Milestone 2_ Parts D-F (1)

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Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 1 Total Rewards Milestone 2 Benefits and COmpensation Analysis Section 1, Parts D-F Diana Nunez October 22, 2023

Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 2 We will analyze Emerging Pharmaceuticals in the following parts in order to improve and modernize the company's current comprehensive reward program. We will look at both quantitative and qualitative data in the present systems to find gaps so that we can push for improvement and offer instructional advice. Additionally, this information will be used to contrast and compare the current benefits and pay structure with outside benchmarking data from Emerging Pharmaceuticals' industry partner, Medtronic. Misalignment, Differences, and Gaps Throughout this case study, many instances of discrepancies, mismatches, and overall differences between Emerging Pharmaceuticals' (EP) and Medtronic's Total Rewards packages emerged. As the recently hired EP Total Rewards Director, I have determined which major areas, when compared to Medtronic's external benchmarking data, show misalignment, discrepancies, or gaps: 1. Remote work flexibility 2. Policies for tuition reimbursement 3. Advantages of paid time off 4. Competitive ranges for pay 5. A wider range of medical alternative The only scientists and analysts who are now allowed to work remotely at Emerging Pharmaceuticals (EP) are those who work in data analytics for drug and patient outcomes. On the other hand, Medtronic offers remote work opportunities for a variety of positions, including those in operations, customer support, IT, and human resources. Medtronic gained significant benefits from this embracement of remote work, including lower office space lease costs of $1.2

Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 3 million annually, this helps to increase productivity, and improved capacity to draw in top personnel (Frauenheim, 2013). Emerging Pharmaceuticals (EP) offers an annual benefit capped at 100%, covering up to $2,000 for undergraduate degrees and up to $3,500 for graduate degrees, with regard to tuition reimbursement policies in both companies. In order to qualify for this benefit, employees must work for the company for a minimum of one year and must take coursework as part of an undergraduate or graduate program at an authorized U.S. college or university, or pursue education related to their present role (SNHU, 2020). Medtronic's policy, on the other hand, provides a 100% yearly benefit with higher ceilings of up to $5,000 for graduate degrees and up to $3,000 for undergraduate degrees. In contrast to EP's strategy, Medtronic sets itself apart by not requiring employees to meet any tenure requirements in order to be eligible for tuition reimbursement. Also, Medtronic offers tuition discounts to a number of universities, both domestically and internationally (SNHU, 2020). One major area where Emerging Pharmaceuticals (EP) and its rivals differ significantly is in the advantages they offer for paid time off. In addition to offering paid time off based on a front-loaded annual model with accrual rates based on an employee's years of service, EP now offers seven paid holidays. This allows for a maximum of eighteen days of paid time off per year. In particular, any balance in an employee's PTO bank that remains as of December 15th of any given year is subject to forfeiture, which means that unused PTO will be lost because EP does not offer cash-out or rollover options (SNHU, 2020). When it comes to years of service, Medtronic's paid time off benefits are more generous, providing up to 35 days each year. In addition, Medtronic does not have a "use it or lose it" philosophy; any PTO unused by April 1st can be carried over to the next year. By providing an extra vacation week to staff members upon

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Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 4 achieving every 5-year service anniversary, Medtronic goes above and beyond. This allows staff members to get an extra week at the 5, 10, 15, 20, and following service milestones. In addition, as SNHU's study states, Medtronic gives employees a year-end leave from December 24 to December 28 during which time any accumulated paid time off remains unpaid (SNHU, 2020). The pay range is another important factor that needs to be taken into account in order to bring Emerging Pharmaceuticals (EP) into comparison with its competitors. It is clear from looking at the job descriptions of both companies that EP is paying, on average, $10,000 less than Medtronic for roles like IT developers, scientists, research analysts, clinical specialists, non- clinical managers, and clinical managers (SNHU, 2020). Medtronic has chosen a leading market strategy, while EP has chosen a matching market strategy. Since corporations base their pay on market standards, the matching market policy more closely matches with market pay rates. This strategy has clearly been followed by EP, as evidenced by the wage ranges provided for each position matching or aligning with Medtronic's, and by the maximum pay staying within the range that Medtronic set forth (Martocchio, 2019). The healthcare benefits that Emerging Pharmaceuticals (EP) provides to its employees differ significantly from those that Medtronic provides. EP provides two dental plans (Basic and Premium), a vision plan, and two healthcare alternatives (Value PPO and Choice +PPO) with the same providers. EP has no wellness incentives and imposes a surcharge on working spouses of employees who can choose to enroll in their own employer's coverage (SNHU, 2020). On the other hand, Medtronic offers a more complete healthcare package that includes two dental plans (Comprehensive and Basic), one vision plan, and three different healthcare options (PPO and CHP) from three different providers (HealthPartners, Blue Cross Blue Shield, and United Healthcare). above these options, Medtronic goes above and above with additional

Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 5 benefits like a Flexible Spending Account that is entirely funded by the employee and a Health Spending Account, for which the firm will contribute up to $1,250 yearly if the employee is enrolled in the CHP plan. Medtronic's strategy also includes rewards like the Nike shoes, travel packages, free medical premiums, and fitness packages, as well as the Frequent Fitness program (completion required to avoid surcharges) and the Above and Beyond Sweepstakes (offering up to $240 in annual reimbursement) (SNHU, 2020). It is clear that Medtronic's healthcare benefits package is more extensive than EP's. Nevertheless, it's important to remember that, Medtronic employs 83,000 more people than Emerging Pharmaceuticals and brings in more than $24 billion annually (SNHU, 2020) Increased, Reduced, or Stay the Same The relative age of the two companies, EP is younger than Medtronic, is another important factor to take into account. As Emerging Pharmaceuticals grows and tries to meet the changing demands of its staff, it is more important than ever for them to review and modify their Total Rewards program. According to the information provided by EP, it would be wise to consider a number of changes, such as increasing the number of remote work options available, improving tuition reimbursement programs, raising paid time off allowances, keeping the current salary ranges, and retaining the current healthcare options while adding wellness incentives and optional benefits like childcare and tuition discounts. These changes would take into account the organization's changing workforce needs and be in line with its goals. Expanding the requirements for remote work possibilities would allow Emerging Pharmaceuticals (EP) to better control expenses, reduce employee attrition, and provide a better work-life balance for its staff. Amazingly, 95% of workers claim that having remote work

Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 6 options greatly increases employee retention. After a remote work agreement is offered, employee turnover drops by an average of 12% (Farrer 2020). Of the workforce, 54% said they would switch jobs for one that offered them more flexibility (Farrer, 2020). Medtronic's policy, which provides 100% reimbursement up to $3,000 for undergraduate degrees and up to $5,250 for graduate degrees, Emerging Pharmaceuticals (EP) must improve its annual tuition reimbursement benefits. Further, keeping a healthy work-life balance and having access to healthcare are equally important as having competitive paid time off. It is essential for lowering stress and averting burnout at work. Decreases in stress levels also result in fewer burnout episodes and a decline in health problems. As a result, this results in lower healthcare expenses for Emerging Pharmaceuticals (EP) and its employees. The expense of employer-sponsored healthcare is also on the rise; between 2019 and 2021, it will increase by 9.7%, from roughly $13,209 to $14,542 per employee (WhoopUnited, 2023). Many employees value more than simply a salary raise; they seek recognition and rewards for their dedication and hard work. By increasing the provision of paid time off, EP can address these issues without having to raise employee compensation (SNHU, 2020). I think Emerging Pharmaceuticals should stick with its current compensation scale, especially because the market match policy is a wise business move. This strategy guarantees that the business maintains its competitiveness by providing comparable compensation to its peers in the industry (Martocchio, 2019). Employees are beginning to place more value on a company's benefits than on pay since benefits improve experiences and contribute to greater job satisfaction (Labitoria, 2021). These include things like paid time off, healthcare, and a 401(k) with an employer match. Adopting this strategy keeps EP competitive by allowing it to devote

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Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 7 money to other vital benefits, encourage employee engagement, draw in top talent, and raise overall employee happiness. I think Emerging Pharmaceuticals (EP) should continue to offer its current range of healthcare solutions and also implement wellness incentives. Offering benefits that let employees engage in personal hobbies, save money for future objectives, and develop health security can improve engagement and morale at work (Labitoria, 2021). Population Affected When considering changes to EP's Total Rewards program, it's critical to consider the impact these changes will have on the organization and its employees. Out of the 15,000 employees at EP, over half are female, and more than 60% are between the ages of 31 and 50. The main goal of the new package approach is to soothe the worries expressed by this particular group of people. Ensuring that the revised Total Rewards package meets the needs and preferences of every person inside the company is the main goal.

Milestone 2: Benefits and Compensation Analysis (Section 1, Parts D-F) 8 Reference Farrer, L. (2020 February 12). 5 Proven Benefits of Remote Work For Companies . Fobers. https://www.forbes.com/sites/laurelfarrer/2020/02/12/top-5-benefits-of-remote-work-for- companies/?sh=60d6b82616c8 Frauenheim, E. (2013 May 29). Why Flex Work Is Not a Stretch. Workforce. https://workforce.com/news/why-flex-work-is-not-a-stretch Labitoria, C. (2021 November 26). Salary vs Employee Benefits: Which is better to offer? . Human Resource Director. https://www.hcamag.com/us/specialization/benefits/salary-vs-employee-benefits-which-is-better- to-offer/318056#:~:text=According%20to%20the%20Glassdoor%20survey,benefits%20over %20a%20pay%20increase. Martocchio, J. J. (2019). Strategic Compensation (10th ed.). Pearson Education (US). https://mbsdirect.vitalsource.com/books/9780135175910 SNHU Medtronic. (2020). 2018 Medtronic Benefits Information . For use in OL 620 Total Rewards comparison with the supplied case study data. SNHU Emerging. (2020). Emerging Pharmaceuticals and Medtronics Comparison Study . SNHU OL-620 Total Rewards Course Documentation. WhoopUnite. (2023 February 23). The True Cost of Employee Burnout. Whoop United. https://www.whoopunite.com/blog/business/articles/cost-of-employee-burnout/

Milestone 2_ Parts D-F (1)

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