Compensation and rewards within any given company form an important component of the functions of a company. The packages that a company extends to its employees determine the motivation that is shown by the customers. This, in turn, serves to increase the productivity of the organization. FedEx Company has realized the importance of offering attractive packages to its employees. The company gives close to 50% of its returns to its employees as benefits and compensation (FedEx, 2012). It is also shown by the fact that FedEx Company is ranked among the world’s best employers. The management realizes its worth to pay the cost as it bears more benefit to the company. The compensation packages in the company further serve to attract new, competent employees. It also serves to retain the already existing employees.

FedEx Company

The FedEx Company is ranked among the best employers in the whole world (FedEx, 2012). The management makes this effort intentionally. The management realizes that employee satisfaction results to greater company performance. This objective is well stated in the organization’s mission statement. This is done in the caption that states FedEx will strive to develop mutually rewarding relationships with all its employees (FedEx, 2012).

Employee compensation at FedEx consumes a big portion of the company returns. The company structures its employee compensation in such a way that individual efforts of employees are acknowledged. The management does this to ensure that the workers are motivated (FedEx, 2012). It also challenges the workers to ensure that they give extra effort towards production. This serves to ensure that the company is competitive. The compensation also acknowledges new ideas that are introduced within the company. High compensation serves to ensure that the employees remain inventive and innovative (Berger & Berger, 2000). It keeps the employees of the company on high level, as each aspires to come up with a new idea. The new ideas ensure that the company improves its service provision daily. The improvement happens through incorporation of new ideas within the company. It further serves to give the company a competitive edge, as there are new implementations on a daily basis.

The compensation strategy of the organization also seeks to encourage any outstanding performance that is noted among the employees. More than this, the compensation strategy of FedEx is geared towards promoting the existence of teamwork among the employees.

The compensation in FedEx combines several pay programs and benefit plans (FedEx, 2012). It also incorporates quality of work and quality of work programs. These include salary increases among the employees. The increases are based on the performance of the employees. The best performers are given higher increment, and this serves as a motivational factor. Variable pay is the other component of the company compensation. This includes the incentives that reward individual contribution and team contribution too.

 The company also offers tuition assistance to its employees, which serves as an incentive to continuous education. This factor keeps the employees highly informed, and it ensures there is always a continuous flow of ideas in the organization. The employees readily go back to school due to the availability of the compensation. The company also pays the leave and vacation of the employees. The paid leaves include maternity and paternity leave (FedEx, 2012). The company compensation also includes superannuation, which is the financial security that is given to employees in their old age. The employees further enjoy the advantage of reduced shipping rate, which mainly constitutes discounts for any personal shipping. There are also given discounted travel, which is the discounts on the air tickets they purchase from the company.

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The awards, given to recognize the employees, include Bravo Zulu, which is the award, given to employees for any outstanding performance. This is especially the performance that surpasses the job expectations. Other awards include Purple Promise Award, which is an award, given for any exceptional customer service. This keeps the customer service department to deal exceptionally well with customers. This serves to ensure an inflow of customers as once a customer is satisfied, he/she informs others, thus, increasing the flow. The reward system also has the Humanitarian Award that recognizes human welfare above the community standards. It also recognizes the human welfare beyond the work standards. Finally, they give the Five Star Awards that enhance service in the organization (FedEx, 2012). It also enhances the spirit of teamwork among the workers and profitability of the organization.

From the above information, it is clear that the company offers cash and non-cash rewards. The advantage of the cash rewards is that employees view it as an increase in their total compensation (FedEx, 2012). This means that most employees do not view it as an incentive program. The cash reward is also disadvantageous, as employees tend to forget it as fast as they use it to pay their bills. Non-cash rewards have an advantage as they motivate employees more. They are viewed as separate compensation from the usual rewards extended to employees.

The management of FedEx ensures that communication of benefits is done effectively to the employees of the organization (FedEx, 2012). The HR department uses the life events approach to communicate to its customers. The employee’s attention is always drawn to ensure they know about the existence of the benefits and rewards. The management provide easy mean for the employees. The communication is also tailored to attract diverse workforce (Pynes, 2008). Various mediums are also used, including in the company blogs and internet. Other means of communication include printed material. The communication is also done the year round to ensure that employees are attracted and retained.

There lies a problem in the compensation techniques that are used within the company. This is especially in the use of the balance sheet approach. The HR experiences problems, while determining the base, on which to add adjustments and incentives for the expatriates. This, however, is recently resolved by the use of localization method.

Various environmental factors that affect compensation include economic factors like the wage level. The organization must put into consideration the pay by the comparable organizations. This helps FedEx to ensure that the pay, it extends to employees, is competitive at all costs. Compensation is also determined by the political factors that exist. Political influence includes the influence by unions. The unions advocate that employees should be paid above the minimum wage level. The political influence also comes from the legislation, governing the operation of the business organizations.

Conclusively, FedEx Company attracts the best employees due to the competitive packages it gives employees (FedEx, 2012). The company is also able to retain the employees due to the packages. The high compensation costs the company a sizeable amount of money. This, however, is beneficial as the high motivation and excellence, showed by workers, attracts more customers (WorldatWork, 2012). It is, therefore, important for any organization to put into practice attractive compensation packages. This serves to attract, retain and motivate the workers (Griffin & Moorhead, 2011).


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