Designing a Compensation Package
Question
Designing a Compensation Package
Using the job description and evaluation method that you created for the exercises in Weeks 2 & 3, and the feedback from peers, design a proposal for a competitive compensation package for the position, including the following elements:
• Job description
• Method of Job evaluation
• Intrinsic and extrinsic benefits
Compensation package and rationale for same
• How performance will be measured
Why the proposal you have created is appropriate for the market at this time.
• Compensation strategy.
The proposal should be formatted in accordance with APA, 6th edition, and the guidelines of the template provided at the Writing Center.
It should be between 2000 - 2500 words in length excluding title page and references. Be sure to include at least six scholarly and/or popular sources, one of which must be the course text
Attached are Six sources, including Chapters 5 & 6 from Weathington & Weathington text (included). Please be sure to use the text as a reference, as well as the job description and job evaluation plan included. This is an academic assignment and needs to have many in-text citations. Website for the modified Aiken Plan I chose for "week 3 job evaluation:" https://www.uoguelph.ca/hr/managers-job-design-job-evaluation/job-evaluation-plan
Thank you.


Solution
Designing a Compensation Package
In large companies, a controller is a critical employee that oversees the accounting procedures and legal compliance of the company’s books of account. This assignment focuses on the controller’s role in mid-sized firms reporting to a chief finance officer (CFO), who is a representative in the executive decision-making committee. The controller will be in charge of accountants in the firm and will ensure that the money that the firm’s revenue and the expenditures are recorded accurately and in compliance with the legal requirements. The aim is to ensure that the company is in good financial health and can use the projections and budgeting process to forecast and help the executive make an informed decision of business expansion. Therefore, there is a need to ensure that the controller is well compensated and qualified to do the task to avoid financial scandals within the company. The aim is to make the controller committed and motivated in doing the assigned responsibilities.
Job Description
The controller position in a mid-size company entails a finance department director reporting to the CFO. The main aim is to ensure that the firm is in good health. Therefore, accounting is one of the primary responsibilities of the position. The accounting procedures in a company entail recording transactions of the company accurately, managing the books of accounts, monitoring and recording the finances entering and paid out, and other managerial accounting responsibilities (Bragg, 2022). Therefore, this responsibility requires that the individual has good knowledge and experience in the accounting profession and is certified to do so. In addition, activities such as creating the company’s budget, overseeing the payroll, and analyzing the data to inform the CFO of the financial health, forecast, and expansion strategies require experience and adherence to accounting standards (Bragg, 2022). Therefore, besides the professional role as a financial controller of the company, the controller position also requires the individual to ensure that the financial dealing of the company complies with local, state, and national laws (Bragg, 2022). The knowledge of the laws of the region where the company is operating is critical towards achieving compliance as well as critical accounting standards by companies. This will help the company not to become a victim of fraud or ruin its reputation because of conducting business illegally regarding financial management. In addition, an excellent strategic controller can help the company make effective decisions regarding the growth strategy and efficient investments that can enhance good returns on investment while safeguarding against risks (Bragg, 2022).
The controller in the firm will be tasked with specific duties and responsibilities. First, the controller has to report accurate financial data to the CFO and other management members. Also, the individual is responsible for operating budget preparations, overseeing the payroll, monitoring and preparing all financial reports, introducing strategies for expanding the company, and maintaining legal requirements to ensure compliance and good standing for the firm (Indeed.com, 2022). Additionally, the controller should fulfill the duty of assistance provided to the company in efficient use of resources to reduce waste and unnecessary costs, as well as effective management of the accountants under the controller that help in managing the books of accounts, including financial reporting, receivable and payable accounts, budgeting and recording data of the payroll (Indeed.com, 2022). Finally, the controller is responsible for staying educated in the financial markets and the current economy to help the company make strategic decisions to maintain profitability and relevance to the market as part of the expansion and growth strategy (Indeed.com, 2022).
The controller has, therefore, to reach some minimum qualifications to fit the job in terms of education, experience, and skills. Regarding education, a controller in such a position should have a minimum of a Bachelor’s Degree in accounting or finance (Indeed.com, 2022). The main aim is to ensure that the person is knowledgeable of the accounting procedures and needs of the company, such as budgeting and preparing financial reports (Indeed.com, 2022). Further, the person should know the international, federal, state, and local regulations and requirements on financial reporting and practices for companies that are up to date (Bragg, 2022). The professional courses and certification from certified public accountants (CPA) can also be an added advantage. Regarding experiences, the candidate should have at least five years’ experience in finance or accounting. In addition to the education and experience, the controller should also have good management and leadership skills, be detail oriented to maintain accuracy, have excellent communication skills, and be good in math and accounting (Bragg, 2022). Having effective organization and project management capabilities can also enhance being one of the strategic leaders in the company.
Method of Job Evaluation
The primary job evaluation method for the controller job is the modified Aiken plan. Most evaluations of jobs and pay equity focus on skill, effort, responsibility, and working conditions. However, the Aiken plan entails more provisions to include nine items, making the evaluation for any job within an organization more effective (University of Guelph, 2022). The first factor includes complexity/judgment, which deals with the relative difficulty and variety of the material used in making decisions and the difficulty in making decisions based on the knowledge and experience of an individual (University of Guelph, 2022). A controller is in the position of a director because of having supervision for other accountants and reporting to management. Finance in any company is a critical department and entails quite a tricky decision that can help the company utilize and allocate resources efficiently or fail. The second factor entails education which infers the training needed for the position (University of Guelph, 2022). In this case, finance and accounting disciplines at the undergraduate level show a significant amount of time spent on a technical subject in the university and hence should be well compensated. In addition, some may have advanced knowledge such as CPA or other graduate programs that can enhance their leadership experience, which reflects a higher educational level.
The third factor entails the experience, which reflects the time one has worked in the relevant field and knowledge gained from that position before concerning the current vacancy (University of Guelph, 2022). Long experience and reviews could indicate good performance on the candidate for the controller job and mastery of the roles and responsibilities. The initiative entails the ability of the controller to use their imagination or creativity to develop effective solutions or strategies that can help the company. The controller job is complex, so the amount of initiative needed is also high. Another factor is the result of errors which entails an estimation or prediction of the chances that an error could be made in the job and the effect of such error, such as company losses (University of Guelph, 2022). The financial controller position is susceptible to fraud. It needs an individual attentive to the details to ensure that the company does not lose money through wastage or fraud, which could lead to company closure.
Another factor entails the contact that focuses on the elation of the controller with other people, including internal and external stakeholders of the company (University of Guelph, 2022). The controller plays a significant role in the internal environment through the interactions with other workers and management. It is a critical role in maintaining good relationships with other coworkers and working together to create effective resource utilization and budgeting. This includes communications, especially to top management and the CFO, regarding the company’s financial health and possible strategic decisions to maintain productivity and profitability. Another factor entails the character and scope of supervision, which involve the direct functional and technical provided to subordinates and the size of the people under supervision, including the tasks (University of Guelph, 2022). For a financial controller in a mid-sized company, the supervision is not that much as most are the accountants assisting in the process. The last two factors include physical demand and working conditions (University of Guelph, 2022). In this case, a controller’s job can be pretty demanding and can lead to the exertion of the individual or burnout. However, the working conditions are based on the company, which has to follow the safety and health environment policy as part of the employee protection requirement for companies.
Intrinsic and Extrinsic Benefits
The intrinsic benefits of the compensation plan entail the rewards program to keep the controller motivated through intangible. Some of the benefits, in this case, will conclude involvement in the decision-making committees and management of the organizations and recognition for good work in front of other stakeholders (Weathington & Weathington, 2020). The aim is to ensure that the individual gets appreciated for their work and feels like part of the company to enhance the alignment of personal and organizational goals (Weathington & Weathington, 2020). The extrinsic benefits will include tangible rewards. For instance, the controller could be provided an additional salary increase, percentage of company shares, and paid leaves, among others (Khan et al., 2017). These benefits help the employee become more committed, motivated, and loyal to the company.
Compensation Package and Rationale
Based on the Survey by Salary.com (2022), the median salary for the controller job in the United States as of July 26, 2022, is $237,286. Most earn between $197,397 and $281,615, which is determined by the job level entry, years of experience, education level, and certifications, among other determinants (Salary.com, 2022). In this controller job, the compensation will include a starting salary of $230,000 each year. The salary will be reviewed yearly based on the employee’s performance. In addition, the controller will be given 30 days of paid leave in a year that can be taken at once or divided within months. In the case of maternal or parental leaves, the person will receive three months of paid leave for mothers and one month for fathers. Based on performance, there will be rewards each year. The company will also cover the employee and immediate family’s health insurance policy. The primary rationale is to provide a competitive package and opportunity for growth within the company compared to other companies, especially for the entry-level (Weathington & Weathington, 2020). Besides, the package aims also to motivate the employee to remain in the organization.
Performance Measurement
The primary performance measure will be an appraisal tool conducted each year. The controller will fill out the appraisal forms online and indicate their goals within the year. At the end of the year, the performance appraisal will help show if the individual achieved the set targets and challenges that could have hindered the attainment of some (Kampkötter, 2016). The aim is not to punish but identify gaps where the individual could be enhanced to become a product, such as opportunities for more training in certain areas to become more productive (Kampkötter, 2016). In addition to the performance appraisal, getting 360-degree feedback from others is critical for evaluating the communication and performance assessment from other colleagues (Karkoulian et al., 2016).
Market Appropriateness of the Proposal
The proposal is appropriate for the market because the salaries are based on the most recent reviews of salary comparisons. In today’s market, financial management is critical to the most organization and a sensitive position within the organization. A good package, especially at the entry-level, and considering the employee as a critical asset to the company is critical (Weathington & Weathington, 2020). Therefore, the package can help retain the highly skilled and talented controller for the company for a long time, especially with rewards such as getting shares which makes the person become part of the company ownership (Weathington & Weathington, 2020). In this way, the person will act in the company’s best interest, especially in the efficient utilization of resources and expansion strategies.
Compensation Strategy
The primary strategy of the compensation strategy is twofold. First, the company aims to attract highly skilled personnel in the controller position and retain them for the long term (Weathington & Weathington, 2020). This includes targeting people with recent education in finance and accounting, including the knowledge of the technology integration in financial accounting and reporting within the company. Having extensive experience in such a position with demonstrated high performance is also critical. Therefore, having a compensation package with a good starting salary and other benefits such as health coverage and paid leaves will enhance the attraction of such an individual for the recruitment and selection process (Weathington & Weathington, 2020). Secondly, the strategy aims to allow the controller to grow within the company over time. This can help the person develop long-term goals and dedication to growing in the company. While the position can be outsourced from outside, the primary consideration could be a promotion within the company as the economic docket is more sensitive.
References
Bragg, S. (2022). Controller job description. Retrieved 3 August 2022, from https://www.accountingtools.com/articles/controller-job-description
Indeed.com. (2022). Controller Job Description. Retrieved 3 August 2022, from https://www.indeed.com/hire/job-description/controller
Kampkötter, P. (2016). Performance appraisals and job satisfaction. The International Journal Of Human Resource Management, 28(5), 750-774. doi: 10.1080/09585192.2015.1109538
Karkoulian, S., Assaker, G., & Hallak, R. (2016). An empirical study of 360-degree feedback, organizational justice, and firm sustainability. Journal Of Business Research, 69(5), 1862-1867. doi: 10.1016/j.jbusres.2015.10.070
Khan, N., Waqas, H., & Muneer, R. (2017). Impact of Rewards (Intrinsic and extrinsic) on Employee Performance With Special Reference to Courier Companies of City Faisalabad, Pakistan. International Journal Of Management Excellence, 8(2), 937. doi: 10.17722/ijme.v8i2.319
Salary.com. (2022). Controller Salary. Retrieved 2 August 2022, from https://www.salary.com/research/salary/benchmark/controller-salary
University of Guelph. (2022). Job Evaluation Plan: Human Resources. Retrieved 2 August 2022, from https://www.uoguelph.ca/hr/managers-job-design-job-evaluation/job-evaluation-plan



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