FastCat Phase 1 Designing an Internal Structure Lindsey Davis Brandon Willem Ivy Vo Kyle Bartholomew Mariah Alber MNGT 433.101 Professor Howard 1 Table of Contents EXECUTIVE SUMMARY……………………………….………………………….…3 INTRODUCTION……………………………………………………………………....4 OBJECTIVES AND STRATEGY RECOMMENDATIONS……………….……….5 JOB BASED PLAN/MANUAL ………………………………………………..……….. COMPENSABLE FACTORS AND WEIGHTS…….………………………….6 EXPLANATION OF COMPENSABLE FACTORS….………………………..9 JOB EVALUATION CHARTS………………………………………………..13 APPEALS PROCESS………………………………………………………….21 RATIONALE…............................................................................................................24 2 Executive Summary The following report includes information on how FastCat can become more successful as a company. We have included information on how FastCat can improve their internal structure in order to improve its overall performance. We have developed a compensation package that will elaborate why different jobs are compensated different amounts. This new, clear understanding of compensation will help keep employees satisfied and improve customer satisfaction and company performance. We have decided to develop a single plan, loosely tailored, job based structure that is designed to increase employee awareness regarding their compensation and benefits. In order for FastCat to reach their fullest potential we broke down the jobs into four categories which include Administrative, Marketing, Technical, and Support. This will promote internal alignment, fairness, and help motivate employees toward FastCat’s objectives. 3 Introduction FastCat is a software engineering company that serves small to medium sized medical companies. The objective of its software products is to streamline the flow of information, improve data reports, and ensure quality treatment for their clients’ customers. FastCat is a smaller company competing with larger companies such as IBM, Oracle, and SAP, and their focus is on providing health providers and their patients with web and mobile software and services. However, unlike their competitors, they do not excel at offering services such as technical training. This has caused financial pressure for the company, and as a result their compensation structure needs to be redesigned to be more flexible and to comply with emerging EMR technology standards. Our consulting firm has been recruited to develop a compensation system that is designed to increase employee awareness, promote internal alignment and fairness, and motivate employees toward the company’s objectives. We believe that an open and fair compensation system will help reverse the growth in turnover and lack of commitment that FastCat has been facing. 4 Objective and Strategy Recommendations Objectives Attraction and retention of skilled and motivated employees Alignment of pay policy with FastCat’s overall strategic goals Clear communication of pay policy to employees Encouragement of individual performance Encouragement of group/team performance Promotion of three-pronged growth strategy to enhance revenue -Penetrating deeper into the current client base with new products -Expand the base to new categories of participants in health care -Expand into new geographic markets Administrative Marketing Technical Support Administrative Aide Marketing Services Representative Graphics Designer Administrative Assistant Marketing Support Implementation Consultant Senior Quality Assurance Technician Quality Assurance Analyst Administrative Leader Senior Fellow Visionary Champion Software Developer Client Account Leader 415 Software Solutions Consultant Project Leader 445 Software User Interface Architect 425 Technician Project Support Assistant 315 Usability Engineer Travel Coordinator User Interface Designer 5 Quality Assurance Analyst A Green Guru Training Assistant Compensable Factors Degree 1 2 3 4 5 Technical Experience Description of Characteristics 1 year or less of related experience. Little to no experience with Microsoft. 1-2 years’ experience required and must have a basic understanding of MS. 3 years of work experience required. Must be capable of using Microsoft Office. Some prior knowledge in Photoshop. 4 years of related work experience. Proficient skills required for Microsoft Office programs. Must have prior knowledge of Photoshop and Illustrator and HTML/CSS. 5+ years of work experience. Must have strong understanding and proficient skills in Microsoft Office programs. Also needs proficient skills in Photoshop, Illustrator and a strong understanding of HTML and CSS. Education Degree 1 2 3 4 5 Description of Characteristics High School Diploma or equivalent Specialized technical training or certification or Associates Degree Bachelor’s Degree Master’s Degree PHD Team Work Degree 1 2 3 4 5 Description of Characteristics Job conducted on individual basis and little to no team collaboration Occasionally participates with others on designated projects Often involved in team projects along with individual tasks Regularly involved in medium scale team projects Is regularly involved with large scale team projects and works with complex objectives 6 Degree 1 2 3 4 5 Degree 1 2 3 4 5 Communication Description of Characteristics Capable of writing, speaking, and understanding English at basic level Capable of writing, speaking, and understanding English at a high level. Little to no punctuation errors. Proficient skills with English language. Uses proper grammar and punctuation. Proficient skills with English language and basic knowledge in an additional language Proficient skills with the English language and able to speak more than one language fluently Supervisory Responsibilities Description of Characteristics No supervisory responsibilities Supervises section within a department, no HR functions, and communicates with supervisors about operational issues Assistant manager, supervises more than one section within a department, communicates with department manager about HR issues such as performance evaluations and disciplinary actions Department manager, responsible for one department, has HR responsibilities including performance evaluations and disciplinary actions Manager of more than one department, manages staff through department managers, has HR responsibilities including hiring, firing, and discipline. 7 Degree 1 2 3 4 5 Degree 1 2 3 4 5 Creativity and Ingenuity Description of Characteristics Seldom contributes to the improvement of company processes, systems, and programs Frequently contributes to the improvement of company processes, systems, and programs Actively participates in the development of new strategies, processes, systems, and programs to improve high quality solutions and overall success of the company Regularly participates in the development of innovative software solutions and communicates those solutions to other organizational department staff Regularly required to create and develop new strategies, processes, systems and programs including the development of innovative high quality solutions to increase the overall growth and success of the company; communicates ideas and plans to other organizational departments staff Problem Solving Description of Characteristics Rarely deals with problems not covered in the organization’s policies and performs basic data analysis Frequently confronted with issues outside normal job routine and basic independent decision making Employee decisions are guided by standardized data and establishes company policies Capable of making decisions that need review during the final stage, regularly analyzes and solves non-routine problems and evaluates data as part of job responsibilities Capable of independently making final decisions and regularly develops policies 8 Explanation of Compensable Factors To aid our team in the evaluation process for each of FastCat’s twenty four available positions, we have developed rating scales based on seven compensable factors that we believe serve as the best indicators of occupational alignment with FastCat’s strategy and company-wide goals. In other words, the higher an individual job rates in accordance with each of these seven factors, the more crucial it is in the pursuit of fulfillment of FastCat’s overall goals – and the level of compensation for each position is designated accordingly. The compensable factors that we have chosen are technical experience, education, team work, communication, supervisory responsibilities, creativity and ingenuity, and problem solving. One of the most critical components involved in determining a job’s worth in light of FastCat’s mission statement and objectives is the level of technical experience/expertise that the position calls for. Accordingly, we’ve assigned this compensable factor a hefty weight of twenty percent. With new competition for the firm emerging constantly, FastCat needs to build itself at least partially around jobs that carry the company forward in terms of technical innovation. While our first metric is entitled “technical experience,” we designed it to take into account not only the required prior experience level, but also to factor in the key technical skills that the job demands – such as those involved with the use of widely used programs like Microsoft Office, Photoshop, and HTML. Assessing these types of minimum skill prerequisites provides a good idea of the level of technical responsibility associated with the job. The second metric our team deemed worthy as a compensable factor was the level of education that a particular job demands. We assigned a less significant weight to this 9 category (five percent), as we felt that real world technical experience should take priority over educational benchmarks – which, unless involving studies of a very specific nature, are often ambiguous in relation to actual job performance. Clearly, however, a lot of the skills learned and individual disciplines honed in school are to some degree applicable to successful performance in professional positions. Our use of education as a compensable factor is also justifiable when one looks at the larger picture. By linking educational level to compensation, FastCat communicates to current employees and jobseekers that it places value on the pursuit of educational goals (and by extension, those related to personal growth). The next compensable factor listed – team work – was defined by our team as the frequency with which a person employed in a particular position works with others to achieve the objectives associated with successful performance in that position. The more frequent the collaboration with others, and the more complex the projects being dealt with, the higher the rating will be for this category. The spectrum, then, ranges from one (describing jobs that require little to no interpersonal collaboration) to five (describing positions that are in large part built on complex, multi-person relationships and tasks that are equally complex in nature). One of FastCat’s overarching compensation objectives is the encouragement of group/team performance, and as such, we determined that teamwork should hold at least a moderate amount of weight in determining levels of compensation. Equally as important as teamwork (ten percent weight) in the context of FastCat’s future success are employee communication skills. In fact, the ability to communicate well with co-workers and the many external stakeholders that FastCat does business with 10 on a day-to-day basis is a fundamental necessity. Successes rooted in any of the other compensable factors will only be permitted to flourish when there is an underlying structure based around employees that know how to communicate with others – and feel relatively uninhibited in doing so. But because it’s such a basic business need, our team decided it was best not to assign too much weight to this category. We don’t want FastCat employees feeling entitled to an entire paycheck simply because they speak and write well. If FastCat hires someone, it’s assumed that – to a degree – they already possess these basic communication skills. It’s a key component of FastCat’s continued success, but not everything. Supervisory responsibilities were determined by our team to hold a considerable amount of weight in defining a job’s worth (fifteen percent). It’s only logical that the more responsibility attached to a set of job duties, the higher the reward that comes with performance of that work should be. Moreover, those positions that give their incumbent supervisory privileges over other employees are, by their very nature, critical to FastCat’s well-being. If the company doesn’t take proper care in communicating their worth and filling them with incumbents of adequate quality, a damaging ripple effect could make its way quickly through the company, potentially affecting many aspects of operation. FastCat wants to emphasize the fact that its leaders are valued. Those leaders will, through some method or another, communicate and reinforce FastCat’s mission and goals as a company, and are therefore critical to its success. Creativity and ingenuity should be among the most highly valued commodities for FastCat right now. With competition strengthening and becoming more and more innovative, the company should make jobs that call for creativity and innovation its focal 11 points. The measure we designed here (with weight of twenty percent) relates not only to purely technical ingenuity (though that is of the utmost importance), but also to the contributions a position makes to the company in the form of new process, strategies, systems, and quality solutions. In today’s turbulent business environment, FastCat is looking to stay ahead of the game. Those that aren’t ahead of the curve risk falling behind very quickly. Last but certainly not least, problem solving skills are an essential part of assessing job worth under our team’s new compensation philosophy. Though rather difficult to assess quantitatively and objectively, FastCat needs to demonstrate the value it places on the rigors of critical thought. Many of the company’s positions demand quality decisions be made in timely and efficient manner. Often, optimal decision-making comes as a result of out-of-the-box thinking. Our team assigned a weight of twenty percent to the category of problem solving. 12 Job Evaluation Charts Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Administrative Aide Degree (1-5) Weight 1 20% Total 20 1 1 2 1 1 5% 10% 10% 15% 20% 5 10 20 15 20 1 20% 20 110 Administrative Assistant II Degree (1-5) Weight 2 20% Total 40 1 2 3 2 2 5% 10% 10% 15% 20% 5 20 30 30 40 2 20% 40 205 Administrative Leader Degree (1-5) Weight 2 20% Total 40 2 4 3 4 5 5% 10% 10% 15% 20% 10 40 30 60 100 4 20% 80 360 13 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Client Account Leader Degree (1-5) Weight 4 20% Total 80 3 5 3 4 4 5% 10% 10% 15% 20% 15 50 30 60 80 5 20% 100 415 Graphics Designer Degree (1-5) Weight 5 20% Total 100 3 3 3 1 5 5% 10% 10% 15% 20% 15 30 30 15 100 4 20% 80 370 Degree (1-5) 2 Weight 20% Total 40 3 4 3 2 3 5% 10% 10% 15% 20% 15 40 30 30 60 3 20% 60 275 Green Guru Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving 14 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Implementation Consultant Degree (1-5) Weight 3 20% Total 60 3 5 3 1 4 5% 10% 10% 15% 20% 15 50 30 15 80 4 20% 80 330 Marketing Services Representative Degree (1-5) Weight 3 20% Total 60 3 5 3 1 3 5% 10% 10% 15% 20% 15 50 30 15 60 4 20% 80 310 Marketing Support Degree (1-5) Weight 2 20% Total 40 3 3 3 1 1 5% 10% 10% 15% 20% 15 30 30 15 20 1 20% 20 170 15 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Project Leader Degree (1-5) Weight 5 20% Total 100 4 5 3 3 5 5% 10% 10% 15% 20% 20 50 30 45 100 5 20% 100 445 Project Support Assistant Degree (1-5) Weight 4 20% Total 80 4 4 3 3 2 5% 10% 10% 15% 20% 20 40 30 45 40 3 20% 60 315 Quality Assurance Analyst Degree (1-5) Weight 1 20% Total 20 2 2 3 1 1 5% 10% 10% 15% 20% 10 20 30 15 20 1 20% 20 135 16 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Quality Assurance Analyst A Degree (1-5) Weight 3 20% Total 60 2 2 3 2 2 5% 10% 10% 15% 20% 10 20 30 30 40 1 20% 20 210 Senior Fellow Degree (1-5) Weight 5 20% Total 100 5 5 3 4 5 5% 10% 10% 15% 20% 25 50 30 60 100 3 20% 60 425 Senior Quality Assurance Technician Degree (1-5) Weight 5 20% Total 100 2 4 3 2 3 5% 10% 10% 15% 20% 10 40 30 30 60 2 20% 40 310 17 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Software Developer Degree (1-5) Weight 4 20% Total 80 3 4 3 1 4 5% 10% 10% 15% 20% 15 40 30 15 80 2 20% 40 300 Software Solutions Consultant Degree (1-5) Weight 5 20% Total 100 4 3 4 3 2 5% 10% 10% 15% 20% 20 30 40 45 40 4 20% 80 355 Software User Interface Architect Degree (1-5) Weight 5 20% Total 100 5 4 4 4 3 5% 10% 10% 15% 20% 25 40 40 60 60 5 20% 100 425 18 Technician Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Degree (1-5) 3 Weight 20% Total 60 3 4 4 1 1 5% 10% 10% 15% 20% 15 40 40 15 20 2 20% 40 230 Training Assistant Degree (1-5) Weight 2 20% Total 40 3 4 3 2 2 5% 10% 10% 15% 20% 15 40 30 30 40 1 20% 20 215 Travel Coordinator Degree (1-5) Weight 1 20% Total 20 1 3 2 2 2 5% 10% 10% 15% 20% 5 30 20 30 40 1 20% 20 165 19 Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Factor Technical Experience Education Team Work Communication Supervisory Creativity & Ingenuity Problem Solving Usability Engineer Degree (1-5) Weight 3 20% Total 60 3 4 2 2 2 5% 10% 10% 15% 20% 15 40 20 30 40 1 20% 20 225 User Interface Designer Degree (1-5) Weight 2 20% Total 20 3 4 4 2 4 5% 10% 10% 15% 20% 15 40 40 30 80 2 20% 40 285 Visionary Champion Degree (1-5) Weight 5 20% Total 100 4 5 3 4 3 5% 10% 10% 15% 20% 20 50 30 60 60 3 20% 60 210 20 Appeals Process Fast Cat’s appeal process has been designed to provide fair and immediate resolution in the area of compensation. In the event that an employee has any questions or concerns regarding their compensation, the following steps should be taken: 1) A written appeal must be submitted to the employee’s direct supervisor. The appeal must include the employee’s name and identification number, the date that the appeal was submitted, the nature of the issue, and either a request for more information or a requested solution. The supervisor is required to provide a written response within five business days. 2) If the employee is not satisfied with their supervisor’s first response, or does not receive an initial response, they may request a face to face meeting. The meeting request must include the employee’s name and identification number, and a range of potential meeting dates. The supervisor is required to respond to the meeting request within two business days, and must schedule the meeting within two weeks from when the request was submitted (barring extenuating circumstances such as sickness or vacation). a. It is the responsibility of the supervisor to ensure that the meeting is documented properly. This can be done through audio/video recording or through a third party witness and recorder. 21 3) Should the employee still be dissatisfied with their compensation following the meeting with the supervisor, or if the supervisor does not respond to their request for a meeting, the employee should submit a written appeal to the human resources department. The written appeal must include the employee’s name and identification number, the date of the appeal, the nature of the issue, and proof of an attempted resolution with the employee’s direct supervisor. A compensation specialist within the human resources department will respond with either a written response or a request for a face to face meeting, and must respond within five business days. a. If a meeting is requested, the compensation specialist will prepare by reviewing the compensation manual and ensuring that one is available during the meeting. The meeting must occur within two weeks of receipt of the written appeal, and it is the responsibility of the compensation specialist to ensure that the meeting is documented properly. This can be done through audio/video recording or through a third party witness and recorder. 4) If the employee is still not satisfied with the compensation specialist’s decision, the last step is to submit a written appeal to the vice president for human resources. The appeal should include the same information as in step three. The vice president will meet with the employee, the employee’s supervisor, and the 22 compensation specialist who reviewed the appeal. The vice president will then render the final decision, after which no appeals may be made. Please remember all information shared during this appeal process must remain confidential, and that nobody, regardless of their level within the company, is permitted to engage in retaliation of any form against an employee who files an appeal. 23 Rationale Job-Based Plan We chose a job-based plan to compensate the employees of FastCat. The company’s revenue is generated based on the performance of its employees on the job, so the best way to compensate its employees is based on the requirements of their job. Risks of a Job-Based Plan While our job-based plan encourages a sense of being paid for performance, there is a potential for bureaucracy and inflexibility when it comes to actually implementing the plan. Our plan includes an appeals process that mitigates some of these risks. A detailed rational of the appeals process is included in this report. Compensable Factors The objectives outlined in our “Objective and Strategy Recommendations” section are based upon paying employees based on achievement of FastCat’s overall strategic goals while emphasizing both individual and team performance. The compensable factors we chose align well with these objectives. We chose compensable factors that emphasize Technical Experience, Creativity & Ingenuity, and Problem Solving as most significant. Giving these three factors the most weight in determining compensation, and communicating this pay policy to employees, shows employees that they will be paid based on their achievement. Single Plan A single plan, as we have created, aligns best with our objective recommendations. One of our objectives is “Clear communication of pay policy to employees”. By having a single plan for all employees, everyone will be clear about how they are compensated and 24 there will be no confusion because the compensation of all employees will have the same weight system. This helps promote the company objective of “internal fairness” as the company is paying for performance standards that are measured equally. Also, our plan focuses on the talents of the company’s engineers and therefore our compensable factors weigh technical expertise and critical thinking the highest in comparison to other factors. Engineers, compared to other employees, utilize these skills the most. Therefore, this plan makes logical sense. Risks of a Single Plan Our single plan might not sufficiently evaluate all of the specific jobs and makes it harder to compare pay rates in the market because it groups together all jobs from different job families. Our “Job Evaluation Charts” show how the pay of each job is determined using the same criteria and weights. While these weights work for FastCat, and the company’s focus on engineers, the weights are not what would determine the pay of the same jobs in other companies in the industry. Pay Model As explained above, our plan promotes “internal fairness” within the company as all performance standards are measured equally. As seen in the “Job Evaluation Charts” section of this report, the highest paid employees are not only the Software Consultants and Architects, which are engineering-focused jobs, but also Senior Fellows, whose job is administrative. Therefore, while our plan focuses on engineering it is not unfair towards other types of jobs. 25 Appeals Process We included an appeals process in our plan that stresses individual and team performance. If an employee feels there is a discrepancy between what they are being paid and what they should be paid based on their performance, they have a set process of appeals they can go through. This process allows supervisors two chances to solve an issue with an employee and if there is still an issue a compensation specialist is called in. By bypassing the employee’s direct supervisor if the problem is not solved, our plan helps fulfill the company objective of attracting and retaining skilled and motivated employees: The employees know that there is a fair and impartial say in their compensation and will be motivated to work harder knowing their performance will recognized and rewarded. Influencing Employee Attitudes One issue at FastCat, according to the survey on employee engagement, is that employees are not as engaged as the owners of the company would like. The “sense of commitment” by FastCat employees is lower than the national average (50% of total employees compared to 60%). Our compensation plan encourages a sense of commitment to the company by clearly communicating to employees exactly how they will be paid for their performance and the pay is fairly distributed to all employees. This plan encourages trust and a sense of security, both of which promote a stronger commitment to the company. Loosely Tailored Structure Relating to employee commitment, loosely tailored compensation structures force employees to complete tasks that are not always specified in their job description. These structures increase uncertainty about what is expected, promoting challenges faced by 26 employees. Compensation is not only based on the dollar amount paid, but also the intangible reward of challenging work (along with other intangibles). Comments on the employee engagement survey stated that employees welcome change and want to know how they can help the company. As the employees will face more challenges with our plan, they will feel more internally rewarded through facing these challenges. With this higher level of compensation (both tangible and intangible), employee commitment will increase significantly. Risks of a Loosely Tailored Structure The loosely tailored structure of our compensation plan risks separating what employees are doing on the job from their job description. Our compensation plan is heavily weighted towards the critical thinking skills of “Creativity & Ingenuity” and “Problem Solving” along with “Technical Expertise” and encourages both individual and team performance. Though employees will be given more challenging work based on this compensation plan, they will not always be performing tasks outlined in the description of their job. Employees may face a job that does not align with their expectations. 27