The topic that offers a broader view of the strategic compensation study is discretionary benefits

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The topic that offers a broader view of the strategic compensation study is discretionary benefits.  The first discussion board topic dealt with flexible benefits, and the ability of the employer to attract talent with these incentives.  Since writing the first posting, it has come to light that most flexible benefits fall under the category of discretionary benefits.  These benefits are not required by the employer, but are incentives that are offered to attract top talent.  A second insight that was revealed during the course study was the entitlement mentality that is associated with discretionary benefits.  Earlier studies revealed that the modern welfare mentality has created an entitlement scenario which includes discretionary benefits offered by employers (Martocchio, 2016).  These benefits were first introduced to entice individuals with higher training, skills, and education to switch over, or retain employment with an organization.  The plans have now morphed into expected benefits without an expected performance level.

Martocchio (2016) notes that the Brazilian government mandates that any benefit offered for an extended period of time becomes a non-discretionary benefit.  While this has not become a law in the United States, it has become an expectation. Martocchio (2016) notes that Brazil is one of the strongest economies in South America.  However, it is also a Socialist society, and lately has shown dramatic signs of economic upheaval.  A recent article noted the recession, and near depression state of Brazil owning to poor politics, socialist policy, and corruption (Lyons, 2016).

Several large world economies are studied, contrasted and compared based on wages, benefits, pensions, and health care (Martocchio, 2016).  The findings are analyzed to show a contrast between the benefits and salaries of individuals across the globe.  Throughout the reading, it is determined that after a cumulative study of American compensation strategies, other countries have less discretionary benefits and more mandated benefits.  The author illustrates that paid leave, and paid vacation and holiday pays that are considered discretionary benefits in the United States are legal mandates in other countries .  Questions arise concerning the competition of industry, if most discretionary benefits are mandated, rather than offered voluntarily. Organizational costs are higher if there is no ability to contain costs.  It would be exponentially more expensive to offer additional benefits above what are already mandated to be given.  Products would cost more; owing to a higher labor rate, and therefore harder to export to cheaper economies.  Finally, innovation must suffer from lack of incentive to improve performance given that most professionals would opt to stay at organizations given the seniority levels, rather than seeking better benefits.

The ability to offer discretionary benefits allows organizations to attract top talent, and to offer incentives beyond what competitors offer. Jyothi (2016) draws a comparison between discretionary benefits, and Maslow’s theory of needs.  The comparison shows that individuals seek certain needs past monetary, that can be meet through discretionary benefits.  This in turn leads to higher motivation, increased productivity, and greater retention among employers.  Benefits that become mandated are seen as entitlements, and therefore offer no incentive for employees to better themselves at the organization they are associated with.

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