JC Penney Compensation Program

Date:  2021-03-04 10:37:04
2 pages  (619 words)
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

J.C Penny Company, which was formerly known as Penny's, is a chain of American mid-range stores which is based in Piano, Texas. Notably, the company handles 1,069 department stores in the United States. Specifically, the primary products of the enterprise are clothing, cosmetics, footwear, electronics, furniture jewelry, and housewares. According to Brown (2011), the success of the company has been tied to its compensation strategy that has been a motivating factor for the employees. Therefore, this paper looks at the current and trend of compensation at J.C Penny Company and the modification of the compensation that it should adopt.

The current components of compensation at J.C Penny Company are divided into two major parts; the executive and the ordinary employees. For the executive, the principal components of compensation include base salary, annual cash incentives awards, and long-term incentive awards. Notably, base salary is given according to the performance of the executive, pay range of position, and according to the market. On the other hand, annual cash incentives are determined by the management incentive compensation program. Lastly, the long-term incentive awards are dogged under the equity plan of 2005. It is based on performance-based restricted stock unit awards and stock option. According to Brock and Buckley (2012), taken together, these components are aimed at delivering superior results and increase stockholder value. On the other hand, the ordinary employees get only the base salary and annual incentive awards. The latter is calculated hourly while the former is given at the end of the year.

Specifically, J.C Penny Company compensates its employees according to their rank and specialization. Notably, the salary starts from $7 to $24 per hour. For example, customer service associate pockets in between 7-14$ while the client service supervisor gets a salary that ranges between $10 and $17.72. The table below shows some of the salary ranges that employees get at J.C Penny Company (Brock & Buckley, 2012).


Customer Service Associate (13)

$7.70 - $13.57

Customer Service Cashier (2)

$8.07 - $11.55

Customer Service Representative (CSR) (6)

$7.05 - $13.15

Customer Service Sales Associate (9)

$6.77 - $12.68

Customer Service Specialist (34)

$8.10 - $10.53

Customer Service Team Leader (2)

$8.09 - $16.21

Customer Support Specialist (2)

$8.55 - $18.53


Human Resources (HR) Supervisor (7)

$10.48 - $24.48

Loss Prevention Associate (4)

$9.11 - $16.72

Loss Prevention Officer (8)

$9.44 - $17.43

There are certain places that HR department at J.C Penny should modify in order to motivate employees which result in more profits. First, they should break down the stock compensation to all employees instead of executives only. Remarkably, the theory beyond this method of compensation is that all employees including the managers will work harder to ensure their own stock increases (Reda, Schmidt & Glass, 2009). In the end, they will have the best interest of the shareholder in mind. However, when a particular group is the one allowed to participate in stock compensation, others will lose the morale of hard work; hence, reduced revenue or profit. Lastly, J.C Penny should review its compensation program in order to increase the wages of employees (Humphrey & Harbin, 2015). Notably, the salary program that is currently used was amended last in the year 2015 alongside the Equity 2015 program. Therefore, just like other big companies like Apple, J.C Penny should increase the pay per hour; this might act as a motivation to all employees.


Brock, M. E., & Buckley, M. R. (2012). The role of stress in workers' compensation: past, present and future. Public Personnel Management, 41(1), 1-14.

Brown, G. (2011). Corporate Social Responsibility: What is it good for?. ISHN, 45(5), 34.

Humphrey, P., & Harbin, J. (2015, January). JC PENNEY: A LESSON IN MARKETING STRATEGY. In Allied Academies International Conference. International Academy for Case Studies. Proceedings (Vol. 22, No. 1, p. 17). Jordan Whitney Enterprises, Inc.

Reda, J. F., Schmidt, D. M., & Glass, K. A. (2009). Executive Compensation Trends for 2009: Balancing Risk, Performance and Pay. Performance and Pay (August 1, 2009).


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