{"id":463,"date":"2020-02-23T17:03:42","date_gmt":"2020-02-23T17:03:42","guid":{"rendered":"https:\/\/papersspot.com\/blog\/?p=463"},"modified":"2020-02-23T17:03:42","modified_gmt":"2020-02-23T17:03:42","slug":"bus409-compensation-management-compensation-practice-wells-fargo","status":"publish","type":"post","link":"https:\/\/papersspot.com\/blog\/2020\/02\/23\/bus409-compensation-management-compensation-practice-wells-fargo\/","title":{"rendered":"BUS409: Compensation Management: Compensation Practice: Wells Fargo"},"content":{"rendered":"

Company Description<\/strong><\/p>\n

Wells Fargo was founded on March 18, 1852, by William G. Fargo and Henry Wells, where its headquarters is in San Francisco, CA. This company deals in community-based and diversified financial services. In that regard, the company engages in the provision of a wide range of financial services, including commercial and consumer finance, insurance, banking, mortgage, and investments, among others (Robert, 1, p. 108). The operations of the Well Fargo Company involve segments such as wholesale banking, community banking, as well as wealth and investment management, among others. The role of community banking entails the provision of a line of diversification for financial services and products to small businesses and consumers. The community banking segment also focuses on small business lending, students, credit and debit cards, and savings accounts. The segment of banking wholesale engages in the provision of financial remedies to the business that is operations within and without the United States. The wealth and investment management segment is usually more concerned with investment and retirement services and products as well as personalized wealth management services offered to clients and businesses across the United States (Elizabeth, 2, p. 121).<\/p>\n

Compensation Strategy<\/strong><\/p>\n

Since its establishment, the Wells Fargo Company has experienced several instances in which it has struggled with its compensation strategy and plans. However, it later on rolled out a new compensation strategy that is not directly based on production, but the objectives and culture of the company (Lauren, 3, p. 237). As such, the compensation strategy adopted and used by Wells Fargo Company involves a scorecard approach in which the company plans to incorporate line personnel to exclude sales goals. Instead, the evaluation of performance focuses on product usage and customer service metric.<\/p>\n

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Best Practices Applied and Compensation-related Challenges<\/strong><\/p>\n

Some of the best practices that the company applies in the course of its operations include the delivery of excellent and satisfactory experiences to its customers through a more robust and enhanced collaboration across different lines of business. The other best practice championed and facilitated by this particular company involves focusing on becoming customer-centric, thereby trying as much as possible to address some of the concerns raised by the customers. Besides, Wells Fargo places more emphasis on the adoption of measures, strategies, and best practices that are primarily linked to the enhancement of its operational excellence while improving its risk controls and oversights. It is noteworthy that the company has also been able to experience compensation-related challenges where it was forced to review its compensation practices (Robert, 1, p. 109). As part of such challenges, the programs used by the company in its incentive compensation were cited as major contributors to unethical conduct and behaviors such as violation of customers’ privacy by opening their accounts without consent. Such challenges were experienced mostly because the management of the company opted to place more emphasis on productivity as a basis for determining the compensation of its workers.<\/p>\n

Application Compensation Practice to Determine the Positive or Negative Impact on the Company and its Stakeholders<\/strong><\/p>\n

In determining the positive or negative impact on the company and its stakeholders, Wells Fargo engages in the application of compensation practices that are linked to the attainment of operational excellence. In this respect, the company is largely involved in the enhancement of its business operations as well as strengthening its monitoring and control testing functions. Such functions are meant to reduce the challenges as well as complexities that the company’s business operations are likely to reencounter (Elizabeth, 2, p. 123). Besides, the company and its stakeholders have significantly benefited from the positive impacts created by its compensation practices in the sense that the effectiveness and efficiency of core operations have been enhanced in several ways.<\/p>\n

Some negative impacts on the company and some of its stakeholders have also been experienced in connection to the introduction and application of its new compensation practices. In this regard, the negative impacts include the loss of jobs and employment positions by some of the workers following the restructuring of products and services provided by the company to its customers in the financial sector (Lauren, 3, p. 246). Business partners of the company were also negatively impacted by the unveiling of the new plan of compensation practice that appeared to be focused on having fewer partners, thus leaving out others. In this particular new plan, the intention of the company placed more emphasis on lowering wastage while striving to restore its reputation by boosting customer confidence in its products and services.<\/p>\n

Ways in which Laws, Labor Unions, and Market Factors Impact the Company\u2019s Compensation Practices<\/strong><\/p>\n

Laws, labor unions, and market factors have always played a crucial role in being influential to the compensation practices adopted and developed by Wells Fargo. It is noteworthy that the workers have managed to appropriately utilize their labor unions and existing laws as the channels for addressing their plights as well as negotiating for better terms of engagement and service with the management of the company. For example, the agitation by the labor union and other stakeholder bodies influences the management of the company to establish a new plan that led to the replacement of previous sales objectives that helped in rebuilding the confidence of the company’s customers. In this regard, the new compensation plan introduced by the company involved at least 50,000 workers, who were previously experiencing challenges of confusion and uncertainties concerning the considerations that would be used by the company in rewarding their performance. Most of those workers included retail bankers who experienced considerable losses (Elizabeth, 2, p. 125).<\/p>\n

Besides, the laws governing the operations of the company have been critical in facilitating changes in the company’s compensation strategies and practices through the addition of more fundamental balances as well as process oversight. The laws governing business operations in the financial sector and the prevailing market factors, such as reduced demand, have also been ken on issuing punitive measures to ensure that companies like Wells Fargo avoid unhealthy compensation practices. For example, the Consumer Financial Protection Bureau imposed a fine of $185 million on Wells Fargo as a punitive measure for wrong and unethical practices against its members of staff and customers (Robert, 1, p. 112).<\/p>\n

Effectiveness of Traditional Bases for Pay at the Company<\/strong><\/p>\n

The traditional bases for pay at Wells Fargo have failed in being effective in upholding its integrity towards its customers. To that extent, the company has considered the introduction and adoption of new bases for pay, which is modernized and largely controlled and monitored through the incorporation of technology. In line with its attempt to boost the efficiency and effectiveness of the bases for pay, Wells Fargo has considered the replacement of the traditional ones with new ones (Lauren, 3, p. 250). Besides, the company managed to release monthly information and data linked to the various new accounts opened by its customers, which indicated a significant rise compared to the previous ones. Different studies showed that both new checking account openings and credit card applications, among other business operations conducted by the company, were significantly influenced by its traditional bases for pay in the sense that it became difficult to realize meaningful growth. In that way, it is worth noting that the effectiveness of traditional bases for pay at the company was less effective when it comes to influencing growth.<\/p>\n

Source List<\/p>\n

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  1. Evans, Robert. 2017. Wells Fargo focuses on sustainable homeownership. Corporate Philanthropy Report<\/em>. 108-112. http:\/\/doi\u00a010.1002\/cprt.30132<\/li>\n
  2. Krauter, Elizabeth. 2012. Executive Compensation and Corporate Financial Performance in Brazilian Companies. 121-125. http:\/\/doi\u00a010.2139\/ssrn.2171041<\/li>\n
  3. Hearit, Lauren. 2018. JPMorgan Chase, Bank of America, Wells Fargo, and the Financial Crisis of 2008. 237-260. http:\/\/doi\u00a0\u00a010.1177\/2329488417753952.<\/li>\n<\/ol>\n

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    Company Description Wells Fargo was founded on March 18, 1852, by William G. Fargo and Henry Wells, where its headquarters is in San Francisco, CA. This company deals in community-based and diversified financial services. In that regard, the company engages in the provision of a wide range of financial services, including commercial and consumer finance, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-463","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=463"}],"version-history":[{"count":1,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/463\/revisions"}],"predecessor-version":[{"id":464,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/463\/revisions\/464"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}