The effectiveness of a compensation system depends on a number of factors, including the
company's industry, values and goals. When comparing the compensation systems of ArcelorMittal
Dofasco and Koch Foods, it is clear that Dofasco's approach is more effective in terms of attracting
and retaining talent, promoting employee satisfaction and minimizing legal issues.
ArcelorMittal Dofasco's compensation system is designed to match the company's motto: “Steel is
our product. Our people are our strength." He emphasizes the importance of his employees and
recognizes their contribution to the company's success. Dofasco offers competitive salaries, a
variable compensation plan, profit sharing, a robust pension plan and group fringe benefits. This
comprehensive approach attracts top talent and motivates employees to best perform because it
directly benefits the company's profitability. The company's success in retaining long-term
employees and attracting new talent despite industry challenges is a testament to the effectiveness
of its compensation system.
On the other hand, Koch Foods' compensation system appears to be less effective. It pays workers an
hourly wage just above the legal minimum and offers minimal benefits. This approach has led to a
number of lawsuits, including allegations of pay discrimination and failure to pay employees for
overtime and travel time. A high turnover rate exceeding 100 per cent annually indicates that
employees are not satisfied with compensation and working conditions.
In conclusion, ArcelorMittal Dofasco's compensation system is more effective because it promotes a
positive work environment, motivates employees and reduces legal problems. It shows that investing
in employees through competitive rewards and profit sharing can lead to long-term success and
stability, even in challenging industries.