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Compensation Philosophy of Maersk Case Study Analysis

Compensation Philosophy of Maersk

Compensation is the process of refers to the providing payment to employers upon meeting their particular tasks. The approach taken by the organization in providing payment and the agreement between the employers and the employees is the compensation philosophy of that company (Maersk, 2017). Different companies undertake different approaches regarding this matter depending on factors such as industrial circumstances, the financial history of the company and also the culture.

Compensation Philosophy of Maersk Case Study Analysis


A Description of the Mechanism

            Maersk company utilizes a simple but effective method of compensation, and this method has enabled it to be relevant and competitive in the market. The company utilizes the industrial approach when it comes to the designing of compensation. The different jobs are designed in some job groups depending on experience, knowledge and the workstation demands. The different workers are placed under different job groups and each given their payment based on their group demands (Groysberg, 2013).

However, the approach is different when they opt to increase or decrease the salary of any individual. They will have to conduct a performance appraisal of the given period first. Performance appraisals are whereby an individual ‘s performance over a given and agreed upon time frame is reviewed. The reviewed in most cases is in line with the objectives and targets that the individual had set for themselves at the beginning of that time. If one is discovered not to have met these targets, they end up missing out on the increase. In other instances, individuals end up having a pay cut owing to a series of under performance.

Advantages of Salary Survey’s to an Organization

            Salary surveys involve an organization undertaking research within the industry or a given region to determine the salaries paid by other employers. Through this, it is possible to determine the maximum and minimum salary paid by employers within a locality or industry.  These surveys are very crucial to employers in some ways.

Also Study: Pricing Strategies of Maersk

Employers will only be able to offer fair salaries to their workers if they undertake these surveys since they will have a glimpse of the prevailing salary condition of the place. Additionally, through the survey, the organization may know how best they can attract and retain workers. Offering a salary that is slightly higher than the prevailing salaries makes it possible to attract new workers who are seeking for greener pasture.  More so, it is also a good way of making workers stay within the organization for fear of ending up being paid less (Oyer, 2008).

Advantages of discretionary benefits to Maersk

By having a discretionary benefit system, the organization mainly benefits from the perspective of employee empowerment. Since they are providing health benefits to their employees, the workers will be at their optimum best at all times making them more productive. More so, cases of taking payable health leaves will not be a concern anymore. Also, provision of educational reimbursements makes it possible for the company to improve the skills level of their workers. In the long run, they will end up having a team that is experienced and equipped with knowledge and skills. These are enough to make the team of workers the best. Lastly, offering these additional privileged makes the workers feel accepted and part of the Maersk community. This attachment makes them loyal and eventually boosting their retention levels (Markel, 2010).

Also Study:

Maersk Group of Companies HR Management Case Study Analysis

  • Maersk. (2017). Incentives Pay Guidelines. Retrieved from: https://investor.maersk.com/guidelines.cfm
  • Groysberg, B, S.L., (2013).A.P. Moller – Maersk Group: Evaluating Strategic Talent Management Initiatives. Boston: Harvard Business School Publishing.
  • Maersk. (2017). Incentives Pay Guidelines. Retrieved from: https://investor.maersk.com/guidelines.cfm
  • Markel Ph. D., K. (2010, December 20). Discretionary Employee Benefits. Retrieved from: https://www.shrm.org/academicinitiatives/universities/teachingresources/Pages/DiscretionaryEmployeeBenefits.aspx
  • Oyer, P. (2008). Salary or benefits?. In Work, Earnings and Other Aspects of the Employment Relation (pp. 429-467). Emerald Group Publishing Limited.


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